* Arctic freeze in Texas unleashes power blackouts
* US coronavirus infection rate falls to lowest since October
* Support grows for Capitol riot inquiry after Trump acquittal
* Myanmar protests continue after Feb. 1 military coup
* Investor demand for corporate debt driving a Wall Street lending boom
* Afghanistan is near tipping point as Taliban’s control of country advances
* Japan’s economy continues expanding in Q4, signaling resiliency
* Japan’s Nikkei 225 stock index rebounds to new high (30 years later)
* Eurozone industrial production fell more than expected in December
* US consumer sentiment falls to 6-month low in Feb as inflation outlooks rises:

● This Is How They Tell Me the World Ends:
The Cyberweapons Arms Race
Nicole Perlroth
Review via The Washington Post
The U.S. government is paying hackers for vulnerabilities it finds in software and hardware used by corporations and governments. Once they’ve bought those vulnerabilities, they’re turning them into cyberweapons employed in attacking or spying on adversaries.
That’s the moral, political and economic dilemma explored by “This Is How They Tell Me The World Ends: The Cyberweapons Arms Race,” a new book out today by New York Times cybersecurity reporter Nicole Perlroth.

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In this issue:

• Stocks rise as Treasury yields tick higher
• Is the tide finally turning in favor of global asset allocation?

Programming note: Starting with this issue, ETF-PS will separate reporting on our portfolio strategy benchmarks from the proprietary strategies, which will be updated in an upcoming issue.

Equities rally as the reflation trade starts to pinch bonds: US equities rose for a second week, based on Vanguard Total US Stock Market (VTI). The fund gained 1.7% at Friday’s close (Feb. 12), marking the first back-to-back weekly gain this year and propelling VTI to a new record high.

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Why Are High Exposures to Factor Betas Unlikely to Deliver Anticipated Returns?
Chris Brightman (Research Affiliates) et al.
January 11, 2021
By choosing investment strategies that intentionally create exposure to factor betas, investors may be obtaining uncompensated risks. We show across a wide variety of factors and geographical markets that factors constructed from fundamental characteristics have earned high returns, whereas those constructed from statistical betas have earned returns close to zero. When designing factor-based investment strategies, investors should seek exposure to the fundamental characteristics that define a factor and use statistical measures of factor betas to manage factor risks. Conversely, seeking to gain exposure to factor betas is a misguided means of obtaining the returns available from factor investing.

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* House committee approves Biden’s $1.9 trillion relief program
* Biden says US has new deals to secure 200 million more vaccine doses
* Vaccine rollouts are improving across the US
* Trump’s legal team’s defense begins today in Senate impeach trial
* Fed’s Daly expects central bank bond buying to continue through 2021
* Eurozone headed for political battle over sharply higher debt levels
* Pondering how tech innovations will unleash a surge in productivity\
* UK GDP fell a record 9.9% in 2020 but rebounded in December
* US jobless claims signal stronger pandemic-related headwinds:

Small-capitalization shares are having a good year. It’s only mid-February, but year-to-date results continue to show a strong performance edge in favor of smaller stocks in the US equity space, based on a set of exchange traded funds through yesterday’s close (Feb. 10).

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* President Biden discussed ‘fundamental concerns’ with China’s President Xi
* Dems press charges against Trump in second day of Senate impeachment trial
* Biden approves US sanctions on Myanamar’s military leaders after coup
* Biden team: US may not reach herd immunity until Thanksgiving at earliest
* Fed’s Powell reaffirms central bank’s commitment to ultra-low interest rates
* How a value shop used behavioral bias analytics to survive the value drought
* Rise of green energy will be painful for oil-producing nations, report advises
* Signaling end of era, Shell says its oil output will fall in years ahead
* Inflation isn’t a near-term issue, analyst predicts
* One-year trend in US consumer inflation remains modest in January:

In this issue:

• iShares MSCI Turkey (TUR) takes flight
• US Natural Gas (UNG) – the downside exception to the commodities rally
• Invesco Solar (TAN) continues to run hot

Programming note: Here begins a periodic update of ETFs that caught your editor’s eye on the trending front. In contrast to our broad-based portfolio strategy edition (see here, for instance), Trend Watch will go granular and tactical. In this space we’ll selectively highlight funds that, for one reason or another, stand out vis-à-vis a wide-ranging list of 146 ETFs that run the gamut, from various measures of US stocks and bonds to commodities, REITs, forex, foreign fixed income, country funds and narrowly defined industry groups. For a complete list of the funds we’re monitoring, see the list below.

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The end of the pandemic’s acute phase, or something genuinely close to it, will arrive when so-called herd immunity is reached. This will mark a meaningful turning point for public health and the economy, which are inextricably linked in the age of Covid-19. That leaves the critical question: When will herd immunity arrive?

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* US Covid-19 surge weakens but unclear if this is a turning point
* Senate votes to to allow Trump impeachment trial to continue
* Senate Democrats working on plan to raise federal minimum wage
* Critics charge that Fed policies are fueling speculative bubbles
* Core consumer inflation in China falls for first time in a decade
* Buy emerging mkts via large-cap value stocks only during crises, study advises
* US small business sentiment slipped to 8-month low in January
* US job openings rise modestly in Dec, but remain well below pre-pandemic peak: