The dominance of the US stock market over its foreign counterparts has for years been taken as a sign of the new world order for global asset allocation that forever and always favors American shares. But this year offers a compelling counterpoint to reconsider the received wisdom.
Macro Briefing: 16 May 2023
* Biden and McCarthy set to meet today for more debt-ceiling talks
* Atlanta Fed President Raphael Bostic downplays rate-cut odds in 2023
* US household debt reaches new high in first quarter
* US will buy 3 million barrels of oil to refill emergency reserve stockpile
* China industrial output, retail sales rise less than forecast in April
* German economic sentiment falls in May, first negative print since December
* Argentina lifts interest rate to 97% to fight inflation
* NY Fed Manufacturing Index fell sharply in May:
All The Major Asset Classes Fell Last Week
Losses took a toll on markets around the world, with US stocks and bonds posting the smallest setbacks last week, based on a set of ETFs representing the major asset classes. Commodities and property shares ex-US, by contrast, took heavy blows in the trading week through Friday’s close (May 12).
Macro Briefing: 15 May 2023
* Biden and GOP House leaders to meet on Tuesday for debt-ceiling talks
* Plunging tax revenue brings debt-ceiling crisis closer
* Turkey’s presidential election in Turkey heads to runoff vote
* Ukraine’s Zelensky in UK for surprise meeting with prime minister
* Germany pledges ‘unwavering’ support for Ukraine as Zelensky visits
* Automakers rush to get into mining as electric-vehicle market grows
* Vice Media files for bankruptcy after years of financial troubles
* US consumer sentiment in May falls to lowest level since November:
Book Bits: 13 May 2023
Henry Grabar
Review via LA Times
The cost of parking requirements for new real estate developments is in the billions, passed on in the form of higher payments for mortgage and rent. This contributes, Grabar contends, to a housing crisis that renders great swaths of vibrant American cities unaffordable to younger generations, with increasing numbers living in tent encampments on public sidewalks (and parking lots!) in what still counts as the world’s most prosperous nation.
Is Inflation’s Recent Decline At Risk Of Stalling?
The April update on US consumer inflation was widely reported as delivering another round of encouraging news. But a closer look at a broader set of inflation metrics suggests that further progress on disinflation could take longer than expected.
Macro Briefing: 12 May 2023
* US cities prepare for surge of migrants after change of immigration rules
* House passes bill to restrict flow of immigrants into US
* Fed’s Bowman says more rate hikes needed if inflation, job market stay strong
* Debt ceiling meeting between Biden and congressional leaders postponed
* Uncertainty persists about exactly when Treasury will run out of cash
* Regional bank stock remain volatile as PacWest Bancorp shares sink
* Corporate bond market may offer opportunity in debt-ceiling crisis
* US wholesale inflation continues to ease in April
* US jobless claims rise to 1-1/2 year high:
10-Year US Treasury Yield ‘Fair Value’ Estimate: 11 May 2023
The wide spread between the US 10-year Treasury yield and CapitalSpectator.com’s lesser fair-value estimate continues to narrow, albeit slowly. As outlined on these pages in recent months, the model continues to project a lower market rate ahead. Timing is unknown, but today’s revised analytics reaffirm the forecast. Continue reading
Macro Briefing: 11 May 2023
* Yellen doubts Biden administration can avoid default without Congress
* Migrant influx to US from Mexico surges as pandemic-era law ends
* China and US debt-ceiling risk expected to dominate G7 finance meeting
* Republican-led states move to falls to near-zero pace, slowest in two years
* SoftBank suffers record $32 billion loss for its Vision Fund
* US consumer inflation ticked down to 4.9% annual rate in April:
Gold Looks Pricey Based On A “Fair Value” Model
The world’s favorite precious metal is enjoying a moment in the sun lately. Trading at record highs recently, gold’s allure is back in vogue as various macro risk factors provide a tailwind. Continue reading