The hard data on inflation points to a modestly accelerating rate of inflation, a trend that supports the Federal Reserve’s ongoing policy of gently but consistently raising interest rates. The main push-back to that narrative is the Treasury market.
Continue reading →

US payrolls expected to rebound in today’s Labor Dept report: MarketWatch
Global output slipped to five-month low in August: IHS Markit
ISM Non-Mfg Index for US reflects stronger growth in August: CNBC
US services sector growth eased to four-month low in August: IHS Markit
Jobless claims fell last week, near a 49-year low: Reuters
Job cuts in August rose to third highest this year: Challenger, Gray & Christmas
Productivity in US up at an unrevised 2.9% annualized rate in Q2: Reuters
US private employment growth eased to 10-month low in August: ADP

Bloomberg reported on Tuesday that “investors poured almost $1 billion into Fidelity Investments’ two zero-fee index funds in their first month of operation.” As new fund launches go, this one looks like a win-win for all sides — for Fidelity as well as investors. It’s too early to say for sure how this plays out in the financial industry, but the early signs suggest we haven’t seen the last of the freemium model in asset management. For some perspective, take a look at a story I wrote for RIABiz.com, which was published a few days ago here.

Year-to-date returns for US equity investing are still dominated by small-cap and growth factors, based on a set of exchange-traded funds (ETFs).  By contrast, large-cap-value stocks are currently posting the weakest gain so far in 2018 among the main equity factor buckets.
Continue reading →

Anonymous NY Times op-ed roils White House: Politico
Trump attacks NY Times for “gutless” op-ed: The Hill
Supreme Court nominee won’t recuse himself from Trump cases: Wash. Times
China vows retaliation if US imposes new trade tariffs: Reuters
N. Korea’s Kim affirms “unwavering trust in Trump: CNN
Emerging markets flirting with a bear market: Bloomberg
White House: US wages rising via alternative methodology: NY Times
US trade deficit jumped to a five-month high in July: Reuters
Tech stocks due for hefty weight cut in S&P 500 in upcoming sector revamp: LPL

The expected risk premium for the Global Market Index (GMI) continued to inch up in August, reaching an annualized 5.0% — fractionally higher vs. the estimate in the previous month. The projection reflects the annualized return over the estimated “risk-free” rate for the long run for GMI, an unmanaged market-value-weighted portfolio that holds all the major asset classes.
Continue reading →

New offensive operations begin in Syria: NY Times
Trump considers a government shutdown ahead of elections: Bloomberg
Senate confirmation hearing for Kavanaugh begins with chaos: Reuters
US ISM Mfg Index soared to 14-year high last month: MarketWatch
Global Mfg PMI fell to 21-month low in August: IHS Markit
US Mfg PMI dipped to nine-month low in August: IHS Markit
Construction spending in US ticked up 0.1% in July: AP
SUV sales in US rose sharply again in August: CNBC
Selling continues to weigh on assets in emerging markets: Bloomberg

US equities topped the performance ledger for a second straight month in August for the major asset classes. The gain marked the fifth straight monthly increase and the strongest for the US stock market since January.
Continue reading →

Trump warns Syria, Iran and Russia on new offensive in Syrian province: Reuters
Italy’s spending plans are rattling markets again: MarketWatch
GOP looks for plan to avoid gov’t shutdown ahead of elections: Politico
Considering Kavanaugh’s Supreme Court confirmation hearings this week: CNBC
South Africa falls into recession for first time since 2009: Bloomberg
UK Manufacturing PMI slips to 25-month low: IHS Markit
Amazon is moving into the online advertising industry: NY Times
Chicago PMI fell in August–first slide in five months: Chicago ISM
US Consumer Index dipped to 7-month low in August: CNBC

The good news this Labor Day regarding the celebratory subject du jour: there’s more of it. The quality of the jobs minted in recent years is a topic that’s open for debate, but the quantity is certainly moving in the right direction: US civilian employment reached 155.965 million, as of July 2018 — a record high.