* US Senate set to pass huge industrial policy legislation
* Cracks in Democratic Senate unity imperil party’s policy agenda
* Will Congress approve the G-7’s agreement on a global minimum tax?
* Treasury Sec. Yellen says higher rates would help US
* China’s imports rose at fastest pace in 10 years in May
* US oil prices reach $70 a barrel for first time in three years
* Will we need Covid-19 booster shots? Scientists are studying the question
* US employment growth picked up in May but fell well short of expectations
* Real US Treasury yields via TIPS remain deeply negative:

Finally, some alpha. Two of our three proprietary strategies dispensed some benchmark-beating returns last week (through June 4) after a stretch of underperformance. A third matched the benchmark, Global Beta 16 (G.B16), which continually holds the 16-fund opportunity set (shown in the table at the end of this update).

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● The Profit Paradox: How Thriving Firms Threaten the Future of Work
Jan Eeckhout
Review via NPR
While it’s had some ups and downs, the stock market has soared to historic heights in recent years. For many, that’s great news: It’s a sign the economy and their retirement accounts are doing really well. For Jan Eeckhout, however, the booming stock market is a sign there’s something deeply wrong with the economy.
Sure, the economist says, he has a retirement account with stocks, and he personally benefits from the ongoing bonanza on stock exchanges. But the rocket ride of the stock market is powered by the exploding profits of increasingly powerful corporations. Their increasingly ridiculous profits, he says, are eating the income of the vast bulk of workers and hurting the overall economy. That notion is the central thesis of his forthcoming book, The Profit Paradox: How Thriving Firms Threaten the Future of Work.

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• Another week of gains across asset classes and around the world
• Global asset allocation continues to pay off for portfolio strategies

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Dollar weakness is a topical subject this year, inspiring new forecasts that the currency is in danger of losing its reserve currency status. Advocates of this outlook point to various clues that suggest the end is near. But a careful review of the likely replacements suggest that the greenback will retain is central role in world trade for years to come.

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* Biden signals willingness to negotiate with GOP on infrastructure package
* NY Fed president says it’s too early to reduce stimulus
* Is the US economy at risk of overheating?
* Global growth continued to accelerate in May via PMI survey data
* US economic growth strengthened in May via Composite PMI data
* US jobless claims fell below 400k for first time during pandemic
* US ISM Services PMI continues to indicate strong sector growth in May
* US private employment growth accelerated in May to 7-month high:

Risk-adjusted performance for the Global Market Index (GMI) continued to tick higher in May.

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* Israel opposition parties strike deal to oust Prime Minister Benjamin Netanyahu
* Global employment recovery to prepandemic level will take years
* Congress considering new policies to ease labor shortage
* Fed to begin winding down program that bought corporate assets
* A United Nations gauge of world food costs rose for 12th straight month in May
* Will oil prices continue rising this summer?
* China growth eased in May via Composite PMI, a survey-based GDP proxy
* Economy growing at moderate pace, Fed’s Beige Book reports
* CRB Commodity Index closes at 6-year high:

They’re alive! They’re alive! Emerging markets stocks are alive! Or so it seems.

After languishing in a trading range for weeks, Vanguard FTSE Emerging Markets (VWO) surged in the past two days, ending today’s session (June 2) at the highest level since February. Is it risk-on for EM?

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The Global Market Index’s (GMI) expected risk premium held steady at 5.9% annualized in May, matching the previous month’s estimate. The forecast — performance above the “risk-free” rate – remains well below the realized risk premium in recent history, based on rolling 10-year annualized results.

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