Scott Patterson
Review via The New York Times
The world Patterson portrays is largely divided among two camps: investors who subscribe to Taleb’s “Black Swan” philosophy of financial markets as vulnerable to unforeseeable shocks and those more convinced by the French researcher Didier Sornette’s “Dragon Kings,” anomalous but somewhat foreseeable events. Sornette, who steadfastly believes in “pockets of predictability,” finds Taleb and his partner Mark Spitznagel’s credo a touch too woo-woo. “Quants,” the financial engineers who trust complex formulas to tell them what the future holds — and who are the focus of another book by Patterson — are the extreme foil to both groups.
“The Black Swan concept is dangerous,” Sornette tells Patterson. “It puts us back at the time of pre-science where the wrath of nature, the lightning, the storms were the expression of the anger of the gods.”
Is It A New Bull Market Yet?
The US stock market closed on Thursday (June 8) with a 20% gain above its previous low in October, triggering announcements by a number of analysts that a new bull market has started. Let’s dig into the details and commentary for some perspective.
Macro Briefing: 9 June 2023
* Trump indicted in in classified documents probe by federal investigation
* Fed expected to pause rate hikes next week via survey of economists
* Resilient US economy raises uncertainty for Fed policy path
* Labor slowdowns at West Coast ports causing new supply chain disruption
* Middle-income buyers face a severe housing shortage
* China faces deflation risk: 1-year producer prices fall at steepest pace in 7 years
* US jobless claims rise to highest since October 2021:
Tech Is The Hot Sector For Stocks So Far In 2023
Shares of technology firms, along with digital communications and consumer discretionary stocks, are the US equity market leaders by a wide margin in 2023, based on a set of ETF proxies. The rest of the field is far behind, with nearly half under water year to date, as of Wednesday’s close (June 7).
Macro Briefing: 8 June 2023
* US trade deficit widened by the most in eight years in April
* Eurozone economy contracts slightly for second straight quarter in Q1
* Japan GDP growth revised sharply higher for Q1
* Yields rise around world as traders lean toward Fed hike by July
* US approaching “late, big-cycle debt crisis,” says Bridewater’s Ray Dalio
* Freight railroad alert issued as shippers fear more West Coast port tensions
* Nearly half of Gen X population unprepared for retirement, survey finds
* US economic growth still expected to pick up in Q2 via GDPNow model:
Global Growth Will Continue To Slow In 2023: World Bank
The headwind isn’t expected to soften for the world economy in 2023. For a second year in a row, global economic activity will ease, predicts the World Bank. There’s also a bit of good news, relatively speaking, in the lender’s update of its widely read semiannual Global Economic Prospects report in the form of a slightly higher estimate for growth this year vs. the bank’s January outlook.
Macro Briefing: 7 June 2023
* US banking system may come under strain as US borrowing spree kicks in
* SEC sues Coinbase, alleging firm acted as unregistered broker and exchange
* China exports fell sharply in May, much more than expected
* Sequoia Capital, a major tech investor, will separate its China and US businesses
* Oil unlikely to reach $100 a barrel, predicts analyst
* Some economists say US recession fears are overblown
* World Bank raises forecast for global growth in 2023 to 2.1%:
US Economic Growth On Track To Persist In Q2 GDP Data
The odds remain low that the US will slip into a recession in the second quarter, based on current GDP nowcasts compiled by CapitalSpectator.com. Although recession forecasts endure, the numbers suggest the economy will continue to expand in the near term.
Macro Briefing: 6 June 2023
* Global economic activity rises to 18-month high in May via PMI survey data
* US recession worries persist despite strong labor market
* Tech downturn on West Coast sending chill through region’s economies
* Apple unveils an ambitious virtual reality product
* US factory orders rise for second month in April on strong defense spending
* Services PMI posts “strongest upturn” in over a year in May, but…
* ISM Services Index eases in May, close to near-zero growth:
US REITs Led Last Week’s Broad-Based Rallies In Global Markets
Widespread gains lifted nearly all the major asset classes for trading in the week through Friday’s close (June 2), based on a set of ETFs. The downside outlier: commodities, which slipped fractionally.