Projections for risk premia in the long run edged down in the wake of May’s strong gains for most of the major asset classes. The Global Market Index (GMI)– an unmanaged, market-value weighted mix of all the major asset classes—is expected to generate an annualized 3.9% risk premium (total return less the “risk-free” rate), based on analysis of data through May 2014. The prediction is down from 4.1% in last month’s update.
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Would you know a bear market if you saw one? Hindsight suggests this is an easy task. The telltale signs are obvious… after the fact. From prices dropping below moving averages to negative rolling returns to an assortment of other technical signals there’s a long list of empirical facts that equate with bear markets. The problem is recognizing, as early as possible with a high level of confidence that the market’s transitioned from a bull market to its dark counterpart and vice versa.
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● Global Macro Trading: Profiting in a New World Economy
By Greg Gliner
Summary via publisher, Wiley
Global Macro Trading is an indispensable guide for traders and investors who want to trade Global Macro – it provides Trading Strategies and overviews of the four asset classes in Global Macro which include equities, currencies, fixed income and commodities. Greg Gliner, who has worked for some of the largest global macro hedge funds, shares ways in which an array of global macro participants seek to capitalize on this strategy, while also serving as a useful reference tool.
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Payrolls in the private sector increased 216,000 on a seasonally adjusted basis in May, which is in line with expectations. Although the gain was sharply below April’s revised increase of 270,000, today’s report marks the fourth straight month of 200,000-plus monthly advances. As a result, the current four-month average advance (+222,000) is the highest in more than a year.
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Private nonfarm payrolls in the US are projected to increase 215,000 (seasonally adjusted) in tomorrow’s May update from the Labor Department, according to The Capital Spectator’s median econometric point forecast. The expected monthly rise is substantially below the previously reported increase of 273,000 for April.
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Private-sector payrolls rose less than expected in May, according to this morning’s ADP Employment Report. Companies added a net 179,000 jobs to the labor market in seasonally adjusted terms—well below the expected 210,000 gain based on the consensus forecast. The monthly comparison is a disappointment, but it looks like noise when you consider that ADP’s tally of payrolls for last month still shows growth at roughly 2% on a year-over-year basis.
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Private nonfarm payrolls in the US are projected to increase 220,000 (seasonally adjusted) in May over the previous month in tomorrow’s release of the ADP Employment Report, based on The Capital Spectator’s median econometric point forecast. The expected gain matches the previously reported increase for April.
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Last week’s update on personal income and spending rattled some analysts because the report showed that consumption fell 0.1% in April vs. the previous month. By some accounts, this is a clear sign that the economy is in trouble. Maybe, but that’s premature at this point. No matter how hard you scrub the monthly comparisons, they’re usually too volatile to draw reliable conclusions about the big-picture trend–a caveat that surely applies to the latest spending data.
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A bullish tailwind continued blowing through most asset classes in May. The main exceptions: commodities overall and two corners in the foreign-bond markets (high yield and corporates). Otherwise, prices were generally higher last month for the major asset classes, led by a 3.9% increase in foreign REITs/real estate, based on the S&P Global ex-US REIT Index.
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The ISM Manufacturing Index is expected to increase to 55.0 in tomorrow’s update for May—a slight rise vs. the previous month, based on The Capital Spectator’s median econometric forecast.
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