The major asset classes suffered another harsh run of monthly losses in September, based on a set of proxy ETFs. Once again, nothing was spared (except for cash). Otherwise, losses dominated, echoing results in August.
Macro Briefing: 3 October 2022
* Brazil’s divisive presidential election goes to second round
* UK Prime Minister Truss makes U-turn on tax cuts after market turmoil
* OPEC+ considers production cut after slide in oil prices
* Ukraine continues to recapture territory
* Some Fed officials starting to question rate-hike policy
* Global natural gas market to remain tight in 2023, predicts IEA
* Credit Suisse shares tumble on concerns of investment bank’s financial health
* Cash no longer trash as investors rediscover appeal of Treasury bills as rates rise
* Consumer spending in US rebounded in August
* US 10-year Treasury yield rose for ninth straight week through Friday:
Book Bits: 1 October 2022
Scott Galloway
Review via Publishers Weekly
In this data-driven analysis, NYU business professor Galloway (Post Corona) charts rises in economic inequality, political partisanship, and social alienation since the 1980s. Contending that Ronald Reagan’s tax and budget cuts boosted the economy but suppressed social mobility, Galloway uses graphs, pie charts, and other visuals to illustrate the stark divide in wage growth between the top 1% of American workers and the rest, the declines in infrastructure spending that have left 45% of Americans without access to public transportation, and the sharp increase—from 5% to more than half—of corporate profits registered in foreign tax havens. On the flip side, he presents data documenting how U.S.-led globalization efforts over the past 40 years have decreased global poverty and infant mortality rates. The picture that emerges is one of accelerating domestic decline, as Reagan’s ethos of “rugged individualism” has morphed into “idolatry of innovators” while fostering intolerance and distrust in government.
Expected Rebound For US Economy In Q3 Fades
US economic activity is still expected to post a rebound in the upcoming third-quarter GDP report, but the projected bounced has faded to a crawl, based on the median estimate for a set of nowcasts compiled by CapitalSpectator.com.
Macro Briefing: 30 September 2022
* Russia set to formally annex parts of Ukraine
* Hurricane Ian heads to Carolinas after hammering Florida
* Eurozone inflation soars to record high of 10% in September
* US GDP 0.6% decline is confirmed in revised data
* US gross domestic income (GDI) revised down for Q2
* China manufacturing activity fell for a second month in September
* China services sector slows in September, highlighting struggling economy
* US jobless claims fall to 5-week low, suggesting labor market strength:
Nominal vs. Real Treasury Yields: A Primer
Real (inflation-adjusted) yields have surged in recent weeks, raising the question of whether it’s timely to buy inflation-indexed Treasuries (a.k.a. TIPS)? Maybe, but before you dive in keep in mind that real Treasury yields a particular mix of opportunity and risk that contrasts with standard Treasuries. Accordingly, it’s crucial to pick the right tool based on what you’re looking to achieve (or avoid) at the right time.
Macro Briefing: 29 September 2022
* More than 2.5 million Florida customers without power from Hurricane Ian
* Fed’s Bostic favors a fourth 75-basis-points rate hike in November
* Federal Reserve is exporting inflation to economies around the world
* Deficits are more threatening now that inflation has surged
* China’s new fiscal stimulus exceeds amount issued in 2020
* Eurozone economic sentiment continues its steep decline in September
* UK Prime Minister Liz Truss vows to press on with tax cuts despite blowback
* US pending home sales fell for a third straight month in August
* 3mo/10yr Treasury yield curve up for fourth day, rising to highest since July:
High Dividend Yield Is Leading Edge Of Defense For US Shares
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.