* Biden lifts limit on refugees allowed into US
* Congressional debate set to begin on Biden’s economic plan
* India’s pandemic worsens as total Covid-19 cases reported surpasses 20 million
* Warren Buffett names successor to run Berkshire Hathaway
* Global manufacturing activity rebounded less than forecast in March
* US Mfg PMI continued to rise in April but ISM Mfg Index unexpectedly slipped:
April delivered across-the-board gains in the major asset classes as risk-assets around the world rebounded from widespread losses in March. Thanks to a strong tailwind, you had to really work hard to lose money last month in conventionally managed multi-asset-class portfolios.
* Households in wealthy nations amassed record savings–will they spend it?
* Nearly two-thirds of Americans are optimistic on direction of US, poll finds
* Warren Buffett says US economy is red hot with rising inflation risk
* Verizon is considering selling AOL and Yahoo remnants
* Eurozone manfacturing activity continued to accelerate sharply in April
* US dollar on track for longest run of weakness in nine months
* Broad-based commodities bull market is gathering momentum
* Is herd immunity still possible for the US? Maybe not
* US consumer spending rebounded in March
* US personal income spending surged in March due to gov’t stimulus:
Keeping up with beta while maintaining a risk-management overlay remains challenging this year, but two of our three proprietary strategies dispatched some trivial success this week by losing slightly less than their benchmark. Not particularly impressive, but it beats a kick in the head.
Cass R. Sunstein
Summary via publisher (NY University Press)
The world is increasingly confronted with new challenges related to climate change, globalization, disease, and technology. Governments are faced with having to decide how much risk is worth taking, how much destruction and death can be tolerated, and how much money should be invested in the hopes of avoiding catastrophe. Lacking full information, should decision-makers focus on avoiding the most catastrophic outcomes? When should extreme measures be taken to prevent as much destruction as possible?
In this issue:
Forecasting Bond Risk Premia using Stationary Yield Factors
Tobias Hoogteijling (Robeco Asset Management), et al.
April 12, 2021
The standard way to summarize the yield curve is to use the first three principal components of the yield curve, resulting in level, slope and curvature factors. Yields, however, are non-stationary. We analyze the first three principal components of yield changes, which correspond to changes in level, slope and curvature. The new factors based on changes in yields have strong predictive power for bond risk premia, in contrast to the factors based on yield levels. We also provide insights into the impact this has on the added value of macro data for bond risk premia predictions and the recent conclusion that machine learning provides better forecasts than linear regression.
* Economists expect strong acceleration in US jobs creation for April
* Eurozone economy contracted in first quarter
* Slower growth for China’s mfg and services sectors in April via PMI data
* Rare and perhaps fleeting bipartisan vote as Senate passes water bill
* Pending US home sales rose less than forecast amid tight supply
* US jobless claims continued falling, dropping to new pandemic low last week
* US GDP growth accelerated in Q1 to strong +6.4%:
The Federal Reserve reports that it expects faster economic growth and higher inflation – two factors that historically have triggered tighter monetary policy. But the Fed is playing a different game this time and announced on Wednesday that it will keep interest rates near zero. Depending on your macro outlook, this is either hopelessly naïve or a clear-eyed view of looking through what some anticipate will be reflationary noise for the next several months.
* Fed expects faster growth, higher inflation but holds rates near zero
* Biden outlines broad economic plan to Congress
* Eurozone economic sentiment rebounded sharply in March
* SEC chair resigns over possible conflicts of interest
* Vanguard abandons efforts to obtain mutual fund license in China
* US traded deficit reached record level in March
* US Dollar Index falls to 2-month low:
