Are the chickens coming home to roost? Maybe, but roosting speculation has been a popular sport for years and, so far, to no avail. It’s not obvious it’s different this time, although eventually it will be. Meantime, there’s plenty of red ink to ponder this week as declines weighed on most of the major asset classes.
A new survey finds a majority of economists expecting that the Federal Reserve will begin raising interest rates sometime next year to combat inflation. Maybe, but the 10-year Treasury yield’s recent trend still reflects a flat to downside bias.
* President Biden expands vaccine mandate to combat the pandemic
* Biden’s vaccine mandate is also an effort to support the economy
* US businesses have questions, concerns over new vaccine mandate
* Biden calls China President Xi amid rising tensions between countries
* New survey of economists sees rate hikes in 2022 to counter inflation
* China selling some of its strategic oil reserve in a bid to lower prices
* Two Fed presidents sell stocks to address ethics concerns
* UK economic growth stalled in July, GDP data shows
* US jobless claims continued falling last week, dropping to new pandemic low:
o
There’s been an ongoing debate in recent years about the prospects for the US 60/40 stocks/bonds benchmark, which has become a staple for portfolio analytics. There’s much to criticize here, and arguably the weaknesses of the 60/40 standard are mounting in an increasingly global and complex world. But for good or ill, the 60/40 mix is a common reference point. The question is whether it’s time to move on? Yes, but that’s the easy answer. Next question: What portfolio benchmark should replace it?
* Treasury Secretary Yellen warns US may default on national debt in October
* US oil output remains squeezed due to ongoing fallout from Hurricane Ida
* Fed’s Beige Book reports higher inflation and slower growth
* Factory-gate price inflation in China rose to 13-year high in August
* Emerging markets split between hawks and doves on dealing with inflation
* Britain set to lose status as one of Germany’s top-10 trading partners
* State Street announces it will buy Brown Brothers Harriman Investor Services
* US job openings rose to a new record high in July:
You can learn a lot just by watching, runs one of Yogi Berra’s baseball-infused proverbs. Let’s take a page from the famed Yankees catcher and redirect it to the ebb and flow of weights in our strategy benchmarks. Can we learn something by watching the to and fro? Yes, or at least there are times when monitoring this data yields above-average insight.
One of the more difficult challenges for modeling is deciding how (or if) to deal with extreme data points. It’s a common problem in economic and financial numbers. Fat tailed distributions are standard fare in stock market returns, for example. Meanwhile, the dramatic collapse in the economy during the pandemic last year is a reminder that outliers pop up in macro analytics too.
* Rising US wages raise concerns about inflation pressure
* Fed official continues to push for quick ‘taper’ despite weak US jobs growth
* UK set to raise taxes to 70-year high to pay for Covid deficits
* Does rise of digital currencies facilitate deeply negative interest rates?
* Afghanistan announces hardliners for key posts in new Taliban government
* Soaring price of natural gas is a threat to Eurozone economy and beyond
* Is surging global inflation in economies worldwide a sign that it’s temporary?
* SEC may sue Coinbase over its crypto lending plan
* US 10-year Treasury yield rises to 8-week high:
Uncertainty remains elevated for the economy, inflation, monetary policy and the path of the pandemic as the final quarter of 2021 approaches. As investors struggle to get a handle on how the final run of 2021 plays out, the US bond market has delivered a mixed performance year to date, based on a set of ETFs through Sep. 3.
* Extended US jobless benefits end this week for millions still out of work
* Goldman Sachs economists cut US growth outlook
* President Xi calls for stronger push to redistribute wealth in China
* China’s tech crackdown will weigh on country’s economy, says former WTO chief
* China’s exports rose at faster pace in August
* El Salvador becomes first country to adopt bitcoin as legal tender
* Men trail female college students by record levels
* Weighing the odds that global growth has peaked
* US stocks remain elevated as economic surprise index turns deeply negative:
