US economic growth was surprisingly resilient in the third quarter, according to this morning’s preliminary estimate from the Bureau of Economic Analysis. Output increased 3.0%, well above the 2.5% consensus forecast via Econoday.com and only slightly below Q2’s solid 3.1% advance.
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Imitation, Oscar Wilde famously observed, “is the sincerest form of flattery that mediocrity can pay to greatness.” The observation echoes the objective for using Professor Bill Sharpe’s style analysis to replicate investment indexes that, for one reason or another, can’t be purchased directly. If we can obtain an index’s returns, there’s a pretty good chance that we can reverse engineer the asset allocation and recreate the portfolio with publicly traded securities.
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Spain set to impose direct rule on Catalonia on Friday: Reuters
US Defense Secretary in S. Korea emphasizes diplomacy: ABC News
House approves budget and clears the way for tax reform: NY Times
ECB announces it will slowly begin winding down QE stimulus: RTT
Pending Homes Sales Index for US close to 3-year low in September: CNBC
US jobless claims rise after dipping to four-decade low: MarketWatch
US merchandise trade deficit in August at four-month high: Bloomberg
10-year Treasury yield rises to 2.46% on Thursday — highest since March:

Value investing may not be a victim of the grim reaper, but the strategy’s certainly giving a convincing impression of a cadaver.
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European Central Bank expected to trim bond-buying stimulus: Reuters
House speaker Ryan says tax reform now faces its biggest challenges: The Hill
US new home sales surge, reaching the highest level in 10 years: Reuters
Sep. orders for US durable goods rise the most in three months: USA Today
Is the latest rise in Treasury yields just more noise? Alhambra Investments
Singapore central bank chief: global investors underrate risk: Bloomberg
How did Australia avoid a recession for the last 25 years? News.com.au
Economic costs of climate change will rise for US in decades ahead: GAO

The Treasury market continues to price in firmer odds of another rate hike by the end of the year. Notably, the policy sensitive 2-year yield edged up to 1.60% yesterday (Oct. 24) for the first time since 2008, signaling that a hawkish bias continues to dominate fixed-income trading.
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China’s President Xi lays groundwork for long rule: BBC
Despite Brexit, UK GDP growth picks up in Q3 to 0.4%: Sky News
US Composite Output Index rises to 9-month high in Oct: IHS Markit
Richmond Fed Mfg Index dips in Oct but still solidly positive: Richmond Fed
Rising earnings for key companies support market’s bullish trend: Bloomberg
Trump asks Senate Republicans for views on picking a new Fed chair: Reuters
US economic confidence improves after 2017’s first negative print: Gallup
US 10-year Treasury yield edges up to five-month high: MarketWatch

US economic activity has slowed recently, but the downshift still leaves the economic trend humming at a respectable pace, based on a broad set of indicators published to date.
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Japan tells S. Korea: N. Korea threat is “critical, imminent”: Reuters
Chicago Fed Nat’l Activity Index bounces back in Sep: MarketWatch
Business economists expect firmer growth in fourth quarter: CNBC
Will new tax cuts hurt the US economy? CNBC
Eurozone PMI: new jobs increase at fastest pace in over a decade: IHS Markit
US gov’t fiscal budget deficit is deepest in 4 years for FY2017: Haver Analytics
Betting on a flatter yield curve is the new new thing: Bloomberg

Losses dominated the major asset classes last week, based on a set of exchange-traded products. But three corners of the global markets bucked the trend with gains: US stocks, junk bonds in the US, and high-yield bonds in foreign markets.
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