The recent rally in global markets thinned out last week as commodities and foreign stocks rose while US assets retreated, based on a set of ETF proxies.
Macro Briefing: 7 November 2022
* White House national security adviser held talks with top Russia aides
* Republicans look set to retake House and maybe Senate in Tuesday’s vote
* Florida prepares for a direct hit from Tropical Storm Nicole this week
* China’s exports and imports unexpectedly fell in October
* Goldman Sachs predicts China is ‘months away’ from reopening
* US oil production roughly flat as fracking-related output slows
* Apple’s iPhone shipments delayed due to China Covid lockdown
* Meta reportedly set to announce large-scale layoffs
* US payrolls rose 261k in October, a solid gain but slowest in 22 months:
Book Bits: 5 November 2022
Paul Tucker
Review via The Enlightened Economist
His aim is to bring a mash-up of David Hume and Bernard Williams to the current fraught state of geopolitics and global crises. The book uses the Humean dual of incentives and norms to think about international economic institutions in place of more traditional International Relations perspectives (realism, constructivism…). As long-time readers of this blog will know, I’m a big Hume fan (although confess to not having read Bernard WIlliams since my student days).
The motivating question is whether a legitimate international order can exist in a world transitioning out of the European/Atlantic order and facing complex existential challenges. Specifically, what international economic arrangements can co-exist with current geopolitics and shifts in power?
US Economy Shows More Strength Than Recently Forecast
In early October the near-term outlook for the US business cycle looked mildly grim and output was forecast to turn slightly negative starting in November. But after four weeks the dark estimate reversed and economic activity is again set to stay moderately positive in the immediate future. Recession risk still lurks on the horizon, but for the moment the near-term macro trend has strengthened.
Macro Briefing: 4 November 2022
* North Korea’s provocative run of missile launches continues
* Netanyahu set for return as prime minister of Israel
* German Chancellor Olaf Scholz, in China visit, calls for economic ties ‘as equals’
* US holiday sales expected to rise 6% to 8%, according to an industry forecast
* US factory orders post moderate gain in September
* US jobless claims remain low, highlighting tight labor market
* Services sector contraction in US deepens in October via PMI survey
* US services sector growth slows in October to softest pace in 2-1/2 years:
Fed Pivot Watch: 3 November 2022
In the search for clues on the outlook for monetary policy, investors and analysts are focused on three questions. When will the Fed slow its rate hikes? When will the Fed pause rate hikes? And when will the central bank pivot and start cutting rates? Powell gave somewhat encouraging remarks in one out of three in yesterday’s press conference.
Macro Briefing: 3 November 2022
* North Korea fires ICMB but it failed in mid-flight, says South Korean military.
* Fed hikes target rate by 75 basis point and signals more to come
* Wells Fargo mortgage staff prepares for layoffs as lending activity slides
* China economic activity continues to slide in October in “broad-based slowdown”
* Global manufacturing output falls again in October
* Services sector is bright spot for US labor market in October
* US companies accelerate hiring in October to three-month high:
Total Return Forecasts: Major Asset Classes | 2 November 2022
Expected long-run returns for most of the major asset classes continue to look relatively attractive after this year’s market declines, based on updates of models run by CapitalSpectator.com. In turn, a broad measure of risk assets points to a performance premium in the future vs. recent history.
Macro Briefing: 2 November 2022
* North and South Korea engage in missile launches aimed at each other’s coasts
* Brazil’s Bolsonaro breaks silence, allows transfer of power to proceed
* Netanyahu poised for comeback as Israel prime minister, exit polls show
* Eurozone factory downturn accelerates amid record inflation
* Fed expected to announce another 75-basis-points rate hike today
* China orders Covid lockdown around iPhone factory in Zhengzhou
* US job openings rebound in September despite Fed efforts to cool labor market
* Construction spending in US rebounds in September, surprising analysts
* US manufacturing activity is virtually stagnant in October via ISM Mfg Index:
Major Asset Classes | October 2022 | Performance Review
Most markets around the world rebounded in October, reversing some of the losses that have dominated the major asset classes for much of the year to date, based on a set of proxy ETFs.