It will be gradual, with ample advance notice. And it’ll only begin once the economy has “fully recovered.” That, at least, is the plan for raising interest rates at some point in the future, Federal Reserve Chair Jerome Powell explained late last month. The key question: Will the economy cooperate?
Macro Briefing: 6 April 2021
* EU and UK pledge support for Ukraine after Russian military buildup
* China says military exercises near Taiwan will become routine
* US to attend talks in Vienna aimed at reviving Iran nuclear deal,
* Treasury Sec. Yellen wants a minimum global corporate income tax
* Fed will face criticism with easy money policies if economy soars
* GOP Leader McConnell says ‘consequences’ await companies wading into politics
* Tens of thousands of stores at risk of closing, UBS warns
* China is first major economy to create a digital currency
* China service sector expanded at a stronger pace in March
* US ISM Services Index rose sharply in March, reflecting accelerating growth:
US Stocks Led Gains In Last Week’s Risk-On Rally
Shares in US companies topped returns for the major asset classes last week, based on a set of exchange traded funds through April 1. The rally in American stocks unfolded in a week when global equities overall posted solid gains.
Macro Briefing: 5 April 2021
* Wall Street eyes higher corporate taxes in Biden’s new stimulus plan
* Veteran pension consultant recommends simplifying portfolios with indexing
* Is worker productivity at long last set to rise?
* Some states try to derail Biden’s clean energy agenda
* US payrolls surged in March, well above forecasts
* Goldman Sach reverses its bearish dollar forecast as Treasury yields rise
* US Dollar Index rose for third straight week after strong payrolls report:
Book Bits: 3 April 2021
Justyn Walsh
Review via The Wall Street Journal
When Keynes died in 1946, his net assets totaled some $30 million in today’s money. While his books had sold well, he had made the bulk of his fortune by investing smartly, often from his bed in the mornings after digesting the news. During his 25 years running the King’s College endowment, he generated an annual return of 16%, adapting his investment style to flourish even during the Great Depression and World War II.
Mr. Walsh, a former investment banker and the chief executive of an asset-management firm, explains how.
The ETF Portfolio Strategist: 2 April 2021
Keeping up with beta remains challenging this year. All three of our proprietary strategies are still trailing the Global Beta 16 benchmark (G.B16). That’s not to say that the prop strategies don’t add value – they do, but not in raw performance, at least not so far this year. The risk-management edge, by contrast, remains intact, albeit in varying degrees and on different fronts across the trio of prop strategies. For details on strategy rules and risk metrics in the tables below, please see this summary.
Risk Premia Forecasts: Major Asset Classes | 2 April 2021
The expected risk premium (return above the “risk-free” rate) for the Global Market Index (GMI) continued to edge higher last month, rising to an annualized 5.7% — up slightly from the previous estimate. That’s still well below the trailing realized performance for the benchmark, but it represents a relatively elevated estimate compared with forecasts in recent history.
Macro Briefing: 2 April 2021
* Economists see two-speed growth outlook for global economy with US leading
* Global Manufacturing PMI rose to 10-year high in March
* European Union’s credibility at risk after bloc’s mistakes during pandemic
* China puts new limits on foreign banks’ business operations in the country
* US construction spending fell in Feb, probably due to unusually cold weather
* Inflation pressures building in the US manufacturing sector
* US jobless claims were higher than expected last week
* ISM Manufacturing Index rose to a 37-year high in March:
The ETF Portfolio Strategist: 1 April 2021
In this issue:
- A good for week equities
- Our portfolio strategy benchmarks continue to rebound
Major Asset Classes | March 2021 | Performance Review
US real estate investment trusts (REITs) topped returns for the major asset classes in March, rising 4.4%. The gain follows a second-place rally in February for domestic property shares.