After record-shattering changes in gross domestic product in the previous two quarters, US economic activity in the fourth quarter appears on track to deliver a comparatively “normal” increase, according to recent nowcasts of gross domestic product (GDP) from several sources.

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Fed chairman: resurgent virus is a threat to the economy: WSJ
Trump orders faster drawdown of US troops in Afghanistan and Iraq: BBG
Trump fires Dept of Homeland cybersecurity chief: CNBC
Data suggest Covid-19 immunity lasts for years: NYT
Controversial Fed nominee Judy Shelton is blocked in Senate: CNBC
US FDA approves first home-testing kit for coronavirus: RTRS
Industrial output in US rebounded in October: MW
US home builder sentiment rises to a new record high in Nov: RD
US import prices were surprisingly weak in October: CNBC
US retail sales growth slowed in October: RTRS

Traders appear to be placing new bets on the reflation trade through equity sector bets in energy, basic materials and industrials stocks, based on a set of exchange traded funds. It’s too early to know if this is a sustainable shift, but the change in tone in recent days is too hard to ignore.

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Trump considered bombing Iran last week: NYT
Trump blocks incoming Biden staff on multiple fronts: PLTC
Several US states impose new Covid-19 restrictions: Reuters
Moderna says its coronavirus vaccine is 94.5% effective: CNN
Pfizer to launch pilot delivery program for vaccine in four US states: RTRS
Judy Shelton’s Fed confirmation in doubt as GOP support wanes: MW
Amazon launches online pharmacy: CNBC
US retail sales expected to post 6th monthly gain in today’s Oct report: WSJ
Hungary and Poland block European Union budget: BBC
NY Fed Mfg Index: manufacturing sector growth slowed in November: MSTAR
US stock market (S&P 500) rallies to new record high:

Real estate shares surged last week, in the US and abroad, posting the strongest gains for the major asset classes, based on a set of exchange-traded funds.

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US coronavirus cases passes 11 million mark: RTRS
Health officials warn of risks from Trump’s transition delays: POLT
China extends economic influence with new Asia-Pacific trade pact: BBC
Asia-Pacific trade deal is a win for China, say analysts: CNBC
China’s economy appears to be accelerating in Q4: WSJ
Trump plans hard-line moves against China before he leaves office: BBG
Japan’s economy rebounded sharply in Q3 after a deep slump: NIK
UK Prime Minister is self-isolating after possible Covid-19 exposure: CNBC
US consumer sentiment pulled back in early November: RTRS

● Beyond Diversification: What Every Investor Needs to Know About Asset Allocation
Sebastien Page
Summary via publisher (McGraw-Hill)
Asset allocation is the key to investing performance. Unfortunately, no single approach works perfectly—developing the right balance requires a clear-eyed look at the many models available to you, various investing methodologies, and your or your client’s level of risk tolerance. And that’s where this important guide comes in. Written by a leading allocation expert from T. Rowe Price, Beyond Diversification provides the knowledge, insights, and approaches you need to make the best allocation decisions for your goals. This deep dive into the how’s and why’s of asset allocation is organized by the three decisive components of a successfully allocated portfolio.

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Small-Caps Rally: Stocks of the small-cap variety in the US have been trailing their large-cap brethren this year, but Mr. Market threw out the script this week. That, at least, is the narrative for this week’s strong rally in the lesser realm of capitalization — a rally that suggests that a rotation into smaller firms may be at hand.

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Resurrecting the Value Premium
David Blitz (Robeco) and Matthias X. Hanauer (Technische Universität München)
October 15, 2020
The prolonged poor performance of the value factor has led to doubts about whether the value premium still exists. Some have noted that the observed returns still fall within statistical confidence intervals, but such arguments do not restore full confidence in the value premium. This paper adds to the literature by showing that the academic value factor, HML, has not only suffered setbacks in recent years but has, in fact, been weak for decades already. However, we show that the value premium can be resurrected using insights that are well documented in the literature or common knowledge among practitioners. In particular, we include more powerful value metrics, apply some basic risk management, and make more effective use of the breadth of the liquid universe of stocks. Our enhanced value strategy also suffers in recent years, but this is largely explained by an extreme widening of valuation multiples similar to the late nineties. We conclude that a solid value premium is still clearly present in the cross-section of stock returns.

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US election security officials: ‘no evidence’ voting systems were compromised: UST
China congratulates Biden on winning election: CNN
China warns of response after Pompeo says Taiwan not part of China: RTRS
Trump orders ban on US investments in ‘Chinese military companies’: BBC
UK, EU and US condemn China for crackdown on Hong Kong lawmakers: NPR
Report: temps to keep rising even if greenhouse emissions fall to zero: UST
Central bankers warn that economic risks remain high: NYT
Worldwide deaths from measles rose to 23-year high in 2019: NYT
Eurozone Q3 GDP rebound revised down: RTRS
Business inflation expectations tick up to still-modest 1.9% outlook: AF
Consumer inflation in the US was flat in October: BBG
US jobless claims fell to pandemic low but remain unusually high: CNBC