There’s nowhere to hide in US stocks from a risk-factor perspective, but high-dividend-yielding shares are still the first line for blunting losses year to date, based on a set of proxy ETFs through yesterday’s close (Sep. 27).
Macro Briefing: 28 September 2022
* Will UK Prime Minister Liz Truss’s economic gamble sink her goverment?
* IMF urges UK to ‘reevaluate’ tax cuts amid inflation concerns
* Hurricane Ian threatens to be one of the costliest storms in US history
* Sabotage is suspected in leaking Russian gas lines to Europe
* China’s current falls to record low against US dollar
* US core durable goods orders continued rising in August
* US home prices eased in July at fastest rate in history of S&P Case-Shiller Index
* New home sales in US rebounded in August, rising nearly 29% vs. July
* San Francisco Fed president: central bank doesn’t intend to tip US into recession
* US Consumer Confidence Index rose for a second month in September:
Surging Real Yields Are A Critical Risk Factor… Again
Inflation-adjusted interest rates are rising, rapidly. It wasn’t all that long ago that pundits and markets were worrying about the fallout from negative real rates. In short order, the risk has reversed as the Federal Reserve persists with a hawkish-policy run to tame inflation.
Macro Briefing: 27 September 2022
* US faces government shutdown without new funding deal
* Hurricane Ian batters Cuba; Florida’s west coast is next
* Global economy is slowing more than expected, advises OECD
* China’s economic output expected to lag rest of Asia for first time since 1990
* China’s currency falls to near 14-year low vs. US dollar
* Bank of England says it will ‘not hesitate’ to lift rates despite plunge in pound
* New Boston Fed president: More rate hikes needed to cool inflation
* Growth in Texas factory activity picked up in September
* Wall Street’s ‘fear gauge’, a.k.a. VIX Index, surges to 3-month high
* Chicago Fed Nat’l Activity Index highlights ongoing growth slowdown for US:
Another Week Of Across-The-Board Losses For Major Asset Classes
For a second straight week, all the major asset classes fell in trading through Friday’s close (Sep. 23), based on a set of ETF proxies. From bonds to stocks, along with real estate shares and commodities, red ink swept across global markets.
Macro Briefing: 26 September 2022
* US warns Russia of ‘horrific’ consequences if nuclear weapons used in Ukraine
* Far-right leader looks set to become Italy’s next prime minister
* Tropical Storm Ian, expected to become hurricane, heading to Florida
* British pound tumbles to record low vs. the dollar
* War in Ukraine to cost global economy $2.8 trillion by 2023’s end: OCED
* Buying the dip isn’t working this time… at least not yet
* US business activity continued contracting in September via PMI survey data:
Book Bits: 24 September 2022
Thomas Suddendorf, et al.
Review via Psychology Today
Human foresight obviously has its flaws, and try as we might, we can’t predict the future with certainty. However, the fact that we can even imagine and speculate about the future is nothing short of extraordinary. This ability is what has allowed humans to achieve the seemingly unachievable. The Invention of Tomorrow: A Natural History of Foresight by Suddendorf, Redshaw, and Bulley (out now, from Basic Books) delves into foresight, exploring how it works, how it develops, and how it evolved. The book is meticulously researched, thought-provoking, and engrossing, and I highly recommend it.
When Will Stocks Hit Bottom? Rate Cuts May Be The Best Signal
As evidence piles up that the stock market is caught in a bear market, the focus inevitably turns to analytics that will signal a high-confidence forecast that the selling has reached exhausted itself and a bottom has arrived. There are many possibilities for crunching the data and all come with caveats. But perhaps the leading first approximation is the start of interest-rate cuts.
Macro Briefing: 23 September 2022
* Kremlin-run voting begins Friday in Russia-held regions of Ukraine
* Central banks around the world hike rates after Fed increase
* US Leading Economic Index fell for sixth straight month in August
* Investor pessimism returns to 2008-era high via BoA survey
* Eurozone contraction deepens in September, according to PMI survey data
* UK business activity falls at quickest rate since January 2021 via PMI survey data
* US jobless claims edged up last week but remain near historic lows:
When Will Bonds Become A “Buy”?
As comments from heads of central banks go, yesterday’s press conference was relatively lucid. For anyone who remains confused about the likely path ahead for monetary policy, well, they probably weren’t listening.