Global markets suffered their broadest retreat in a year during September. The bullish exception: commodities, which delivered a solid gain last month. Cash, as usual these days, was flat. Otherwise, red ink dominated performances for the major asset classes last month.
Author Archives: James Picerno
Macro Briefing: 1 October 2021
* House Speaker Pelosi delays vote on infrastructure spending
* Biden signs bill that averts a government shutdown
* Fed’s Powell sees “difficult trade-off” for policy if inflation doesn’t moderate
* North Korea continues missile test-firings
* Eurozone inflation surged to 13-year high in September
* US GDP growth revised up slightly for second quarter
* Chicago PMI dipped to 7-month low in September
* US jobless claims continued rising last week, reaching highest since early August:
Foreign Bond ETFs Are Having A Tough Year
International diversification for bond allocations is, in theory, an attractive concept, but in practice it’s not working out so great in 2021 for US investors, based on a set of ETFs.
Macro Briefing: 30 September 2021
* Senate Majority Leader Schumer announces deal to avert government shutdown
* Democrats are now the main threat to Biden’s economic agenda
* Central bankers expect supply-chain issues to prolong higher inflation
* China’s mfg sector contracted slightly in September, official data show
* An alternative mfg survey for China reports the sector stabilized in Sep
* UK economic growth revised sharply higher for Q2
* Family offices are increasingly considering crypto investments
* US pending home sales surged in August, surprising forecasters
* US 10-year Treasury yield continues to rise, reaching new 3-month high:
The ETF Portfolio Strategist: 29 September 2021
Blending bonds and stocks is a hardy perennial for asset allocation, primarily because of the negative return correlation between the two asset classes that’s prevailed in years past. That is, when stock prices fall (rise), bond prices rise (fall). But this negative correlation isn’t written in stone and fluctuates through time. Recent history suggests it’s fluctuating its way into positive terrain. If so, the diversification benefits of a stock/bond portfolio will fade and possibly evaporate altogether, depending on how positive the return correlation becomes and how long it lasts.
Is The Recent Rise In Interest Rates Noise Or Signal?
After a summer of drifting lower and then holding in a range, the benchmark 10-year US Treasury yield is running higher this month. Does the jump mark a regime change after decades of trending lower? Or is this one more bout of noise? No one can be certain one way or the other, but we can and should manage our expectations by looking a variety of sources for perspective.
Macro Briefing: 29 September 2021
* Treasury Sec. Yellen: US runs out of money on Oct. 18 without higher debt ceiling
* Biden focuses on two Democratic senators to save $3.5 trillion plan
* JPMorgan’s Jamie Dimon says US default would be ‘potentially catastrophic’
* Sen. Warren opposes Fed’s Powell for second term
* Sharp rise in bond yields is challenging investor confidence in big tech firms
* Rising commodities prices lift risk of stagflation for global economy
* Analyst says data shows rise of indexing inflated a stock market bubble
* US home price gains continued accelerating in June, up 19.7% from year ago
* US Consumer Confidence Index continues falling in September:
Energy Stocks Retake The Lead For US Equity Sectors In 2021
As oil and gas prices soar, energy shares are back on top for year-to-date performance for US equity sectors through Sep. 27, based on a set of exchange traded funds.
Macro Briefing: 28 September 2021
* Senate Republicans block legislation to avoid government shutdown
* Will Dems drop fight on debt limit to avoid government shutdown?
* Treasury and Fed heads set to warn that Delta variant slowing economy
* Europe’s energy crisis is warning for US, says gas trader
* US bank mergers expected to reach highest level since 2008
* Power outages in China create challenges for factories
* US durable-goods orders rose sharply in August
* Brent crude oil (international benchmark) tops $80 a barrel–highest since 2018:
Commodities, US Stocks Bounced Last Week As Most Markets Fell
In a week of mostly lower prices for the major asset classes, a broad measure of commodities bucked the trend with a solid gain, based on a set of ETFs for the trading week ended Friday, Sep. 24.