Inflation appears to be rolling over and markets are starting to consider the possibility that the Federal Reserve’s hawkish monetary policy will soon start to ease. But the critical question of how quickly inflation pressure softens leaves more than a trivial amount of uncertainty to ponder.
Macro Briefing: 7 December 2022
* Warnock defeats Walker, giving Dems 51-49 majority in Senate
* China is dismantling its zero-Covid policy
* Will Biden’s green agenda start a new trade war?
* US vows to ramp up natural gas supplies to Britain
* Can Germany avoid recession with a resilient industrial sector?
* Taiwan’s computer chip giant TSMC will triple investment in US plan
* Crude oil (US WTI benchmark) falls to one-year low:
US GDP Growth On Track To Slow In Q4 As Recession Risk Rises
The rebound in US economic activity is expected to slow in the fourth quarter, according to the median for a set of estimates compiled by CapitalSpectator.com. The nowcast offers a bright note amid swirling recession forecasts, but business-cycle indicators suggest that the Q4 GDP estimate will fade as new economic report are published in the weeks ahead.
Macro Briefing: 6 December 2022
* Ukraine drones extend attacks into Russia
* Global economic activity deepened during November, PMI survey data reports
* US factory orders rise more than forecast in October
* Global manufacturing operations shifting away from China
* Oil prices rise as new cap starts on the price of Russian crude
* Renewables will be biggest source of electricity generation by 2025, IEA says
* CEO optimism is waning on the outlook for 2023
* US Services PMI: “Business activity contraction gains pace” in November, but…
* ISM US Services Index reports stronger growth in November:
Emerging Markets Stocks Top Last Week’s Rebound For Risk Assets
Stocks in emerging markets extended their recent recovery and posted the strongest gain in a wide-ranging bounce for the major asset classes for the trading week through Friday, Dec. 2, based on a set of ETFs.
Macro Briefing: 5 December 2022
* Stronger-than-expected jobs report keeps pressure on Fed to extend tight policy
* China’s services activity in November declines at steepest level since May
* US manufacturing orders in China have dropped 40 percent
* Eurozone retail sales in October post biggest monthly decline so far in 2022
* OPEC maintains oil-supply cuts as West tightens sanctions on Russian oil
* BP bets big on hydrogen as fuel of the future
* Developing nations facing a debt crisis in coming months
* Global food prices continued falling in November
* No actively run mutual funds consistently beat their benchmark, study finds
* US payrolls beat forecasts and post solid gain for November:
Book Bits: 3 December 2022
Erica Thompson
Review via The Economist
The author calls on data geeks to improve their solutions to real-world issues, not merely refine their formulae—in other words, to escape from model land. “We do not need to have the best possible answer,” she writes, “only a reasonable one.” Before there is a statistical model, she notes, there is a mental version. Data scientists need self-awareness and empathy as well as mathematical skill.
Total Return Forecasts: Major Asset Classes | 2 December 2022
Expected long-run returns for most of the major asset classes remain relatively attractive, based on updates of models run by CapitalSpectator.com. The outlier: US stocks, which are posting the softest relative performance forecast compared with the trailing 10-year return.
Macro Briefing: 2 December 2022
* Fed’s preferred inflation gauge shows signs of slowing in October
* US consumer spending accelerated in October
* OPEC+ considers deeper oil output cuts
* Construction spending in US fell sharply in October due to weak homebuilding
* Atlanta Fed’s Q4 GDP nowcast revised down sharply to still-solid +2.8%
* Global manufacturing conditions deteriorated again in November
* US mfg activity contracts in November via ISM Mfg Index:
Major Asset Classes | November 2022 | Performance Review
The rebound in global markets strengthened and broadened in November, building on October’s rebound. Only commodities lost ground last month. Otherwise, all the major asset classes posted gains, based on a set of proxy ETFs.