The expected risk premium for the Global Market Index (GMI) was unchanged in September, holding steady at an annualized 5.0% — matching the estimate in the previous month. The performance forecast for GMI (an unmanaged market-value-weighted portfolio that holds all the major asset classes) reflects the premium over the projection for the “risk-free” rate for the long run.
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Key differences in Trump’s replacement for Nafta: CNBC
Trump appears set for protracted economic war with China: Bloomberg
US Navy reports ‘unsafe’ encounter with a Chinese warship: CNN
US air strikes in Somalia target militants: Reuters
McConnell: Senate to vote on Kavanaugh’s nomination this week: The Hill
US construction spending up 0.1% in Aug, led by public sector: MW
ISM Mfg Index for US slipped in Sep after 14-year high the month before: CNBC
US Mfg PMI rose to 4-month high in Sep: IHS Markit
WTI crude oil jumps to four-year high: MW

Broadly defined commodities led the performance horse race in September for the major asset classes. The return marked the first monthly advance for commodities since May, which was also the last time that raw materials writ large led the field.
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US and Canada reach agreement on Nafta trade deal: LA Times
New questions arise over FBI investigation of Kavanaugh: CNN
Iran launches missile attack on militants in eastern Syria: CNN
Hurricane Rosa threatens Phoenix: Newsweek
Death toll surges in Indonesia from earthquake and tsunami: CBS
Sec. of Defense Mattis cancels trip to China amid rising tensions: CNN
Trump administration sues California over its net neutrality law: TechCrunch
Brent oil jumps to 4-year high ahead of Iran sanctions: Reuters
Two-thirds of business economists see US recession by late-2020: Bloomberg
The mini recession of 2015-2016 explains a lot: NY Times
Consumer sentiment reading for US in Sep revised down to still-strong level: CNBC
Chicago PMI dips to five-month low in Sep: MW
US consumer spending posted smallest gain in six months in Aug: MW

● AI Superpowers: China, Silicon Valley, and the New World Order
By Kai-Fu Lee
Q&A with author via Recode
Former Google China president Kai-Fu Lee is betting heavily on artificial intelligence; his investment firm Sinovation Ventures has invested more than $600 million in computer vision, machine learning and other forms of automation. And he’s confident that soon this technology will dramatically change the job landscape.
“If we look at what AI cannot do, there are really two main things,” Lee said on the latest episode of Recode Decode, hosted by Kara Swisher. “One is creative jobs. Jobs like scientists, storytellers, artists and so on. And the other are the compassionate people who really have created a human-to-human connection, trust.”
And what about the jobs that require low creativity and compassion?
“All those jobs will be taken by AI,” he said.
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The prospect of more interest-rate increases in the absence of rising inflation, based on the Federal Reserve’s latest forecast, strikes some as unnecessarily risky for the economy. But for good or ill, the central bank remains on track to lift rates further and the Treasury market (still) expects no less after the 25-basis-point increase from earlier in the week that pushed the Fed funds target rate to a 2.0%-2.25% range, the highest in more than a decade.
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Senate committee may vote on Kavanaugh today: Politico
American Bar Assoc. recommends delaying Kavanaugh vote: CNN
Italy defies EU by raising deficit target: Bloomberg
Israeli PM describes secret Iranian nuclear site: Reuters
WTO cuts global trade forecast, warning trade war threatens growth: Bloomberg
Pending Homes Sales Index falls for eighth month: HousingWire
Fed Chairman Powell: US not facing high odds of recession in next 2 years: Reuters
Wholesale inventories revised down for July: CNBC
KC Fed Mfg Index ticked lower in Sep, but still showing “solid” gain: KC Fed
Jobless claims in US rise more than expected: CNBC
US merchandise trade deficit widened to biggest gap in 6-months: Bloomberg
Revised Q2 US GDP growth: 4.2%, unchange from previous estimate: MW
US durable goods orders accelerate to 11.8% y-o-y, highest in over a year:

Stock markets in the Middle East and Gulf are holding on to a small performance edge over the US equity market so far in 2018, based on a set of exchange-traded funds.
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Federal Reserve raises interest rates for 3rd time in 2018: CNN
Trump criticizes Fed’s rate hike: CNBC
Fed estimates of US GDP growth for 2018 and 2019 tick higher: Fed
Fed chief sees more rate hikes ahead thanks to strong economy: Bloomberg
Kavanaugh hearing set for today amid doubts and new allegations: The Hill
Reports of higher spending plans by Italy’s gov’t weigh on euro: CNBC
Ford’s CEO says Trump’s China tariffs will cost company $1 billion: USA Today
MSCI considers raising weight for Chinese stocks in global benchmarks: Reuters
New US home sales up 12.7% in August vs. year-earlier level: MarketWatch

The Federal Reserve is on track to lift interest rates at today’s policy announcement scheduled for 2:00 pm Eastern, according to Econoday.com’s consensus forecast. The projected hike coincides with rising inflation expectations in recent weeks, based on the yield spread for nominal less inflation-indexed Treasuries.
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