● Money for Nothing: The Scientists, Fraudsters, and Corrupt Politicians Who Reinvented Money, Panicked a Nation, and Made the World Rich
Thomas Levenson
Summary via publisher (Penguin Random House)
Money for Nothing chronicles the moment when the needs of war, discoveries of natural philosophy, and ambitions of investors collided. It’s about how the Scientific Revolution intertwined with finance to set England—and the world—off in an entirely new direction… Unlike science, though, with its tightly controlled experiments, the financial revolution was subject to trial and error on a grand scale, with dramatic, sometimes devastating, consequences for people’s lives. With England at war and in need of funds and “stock-jobbers” looking for any opportunity to get in on the action, this new world of finance had the potential to save the nation—but only if it didn’t bankrupt it first.

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Depending on the slice of the Treasury market, inflation expectations are rebounding — or the outlook for economic growth is weakening. One of these implied forecasts is probably wrong, or least less useful for estimating future macro risks. Higher inflation and softer economic growth isn’t impossible (think “stagflation” in the 1970s). But it’s not yet obvious that the conditions that produced that malaise are recurring and so the odds still favor one scenario at the expense of the other.

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Biden accepts Democratic nomination, pledges to lead US out of darkness: WSJ
Allies reject US bid to reimpose sanctions on Iran: CNN
EU’s chief negotiator: Brexit deal looks unlikely for now: BBG
UK retail sales continued to grow in July, rising past pre-Covid-19 peak: Reuters
Eurozone’s economic rebound loses momentum in Aug via PMI data: IHS Markit
Japan’s steep downturn continues in Aug, according to PMI survey data: IHS Markit
Philly Fed Mfg Index: sector growth in bank’s region slows in August: Mstar
US jobless claims increased more than expected last week: CNBC

The coronavirus blowback and the crowd’s ongoing preference for high-flying growth investments aren’t doing any favors for value investing strategies. Perhaps the chaos of 2020 is laying the groundwork for a performance revival in assets (and asset classes) that have suffered the most. The lagging results of value generally in recent years suggest otherwise, at least by some accounts. But if there’s opportunity in beaten-down assets, at least we know where to look.

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China’s commerce ministry: US and China will hold trade talks: CNBC
Fed minutes: Fed staff lowers economic growth outlook for rest of 2020: MW
Earnings surge for big retailers, including Target and Walmart: NYT
Are stocks increasingly vulnerable to currency risk? BBG
Apples becomes first company to reach $2 trillion market cap: CNET
10yr-3mo Treasury yield curve remains in a tight range, settling at 0.58% on Wed:

The US stock market wiped out the last of its coronavirus losses on Tuesday (Aug. 18), delivering a rapid rebound from a devastating drawdown. As Reuters notes, this year’s slide is the shortest bear market on record. But from the perspective of the market’s sectors, there’s a wide array of pain and gain to consider.

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Democrats nominate Biden as presidential candidate to run against Trump: AP
Democratic and Republican leaders look for opening on stimulus talks: BBG
Trump: “I cancelled [trade] talks with China”: SCMP
US stock market (S&P 500) closed at record high on Tuesday: NYT
The S&P 500 recovers from the shortest bear market on record: Reuters
BoA survey: fund managers think a new bull market has started: II
Despite coronavirus, UK inflation jumps to the highest since March: Reuters
Japan’s exports drop sharply due to coronavirus: BC
US housing construction roared higher in July, extending rebound: BBG

The unprecedented decline in in US economic output in the second quarter is currently on track to recover less than half the loss in Q3, according to several GDP nowcasts compiled by CapitalSpectator.com. The estimates are vulnerable to the high uncertainty related to the path of the coronavirus in the remaining weeks of Q3, but for the moment the prospects appear to favor a partial rebound.

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California suffers first rolling blackouts in nearly two decades: Politico
China says US damaging global trade with Huawei sanctions: BC
Gold rebounds above $2000/oz. on renewed US-China tensions: BBG
Norway’s sovereign wealth fund — world’s largest — suffers huge 1H loss: CNBC
The recession is just starting to hit US cities: NYT
Latest Covid-19 retail victim: Marks & Spencer to cut 7,000 jobs: MW
NY Fed Mfg Index: sector growth slowed sharply in August: Mstar
US homebuilder sentiment in August rises to match record high: CNBC

Equities in developed markets ex-US topped returns for the major asset classes during the trading week through Aug. 14, based on a set of exchange traded funds. In second place: real estate shares listed outside the US.
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