Tomorrow’s revised GDP data for the third quarter is expected to hold at a 1.9% increase, according to the consensus point forecast via Econoday.com. That’s a moderate gain but it’s may be a bridge too far based on estimates for Q4 via a set of nowcasts compiled by The Capital Spectator.
Macro Briefing | 26 November 2019
Yet another hint of progress in US-China trade-deal talks: Bloomberg
Fed Chairman Powell: strong labor market still has room to run: NY Times
2% inflation remains Fed’s target, says Powell: CNBC
Americans expect to raise their Christmas spending at a strong pace: Gallup
Financial advisers worry they’ll get squeezed in Schwab-TD Ameritrade deal: WSJ
Dallas Fed Mfg Index reflect modest contraction in November: DFed
US economic activity continued to slow in October: Chicago Fed
US Bonds, Foreign REITs Were Haven From Selling Last Week
Most of the major asset classes lost ground last week, according to a set of exchange-traded funds. Bucking the downside trend: US investment grade bonds and foreign real estate shares. Otherwise, red ink prevailed in global markets over the five days of trading through November 22.
Macro Briefing | 25 November 2019
US Navy Secretary forced to resign over controversial SEAL case: Reuters
Pro-democracy candidates win big in Hong Kong election: Reuters
German business sentiment improved slightly in November: Bloomberg
Capital spending by S&P 500 companies slows, creating economic headwind: WSJ
Security forum focuses on rising stress weighing on West’s democracies: Politico
US consumers remain upbeat in November: CNBC
KC Fed Manufacturing Index falls again in November: Mstar
US economic growth picked up in November but remains slow: IHS Markit
Slightly firmer slow-growth sign expected in today’s CFNAI (3mo avg) data for Oct:
Book Bits | 23 November 2019
By Glen Arnold
Summary via publisher (Harriman House)
In this second volume of The Deals of Warren Buffett, the story continues as we trace Warren Buffett’s journey to his first $1bn. When we left Buffett at the end of Volume 1, he had reached a fortune of $100m. In this enthralling next instalment, we follow Buffett’s investment deals over two more decades as he became a billionaire. This is the most exhilarating period of Buffett’s career, where he found gem after gem in both the stock market and among tightly-run family firms with excellent economic franchises. In this period, Berkshire Hathaway shares jumped 29-fold from $89 to $2,600.
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Research Review | 22 November 2019 | Factor Investing Strategies
ETF Momentum
Frank Weikai Li (Singapore Management University), et al.
October 12, 2019
We document economically large momentum profits when sorting ETFs on returns over the past two to four years. A value-weighted, long-short strategy based on ETF momentum delivers Carhart (1997) four-factor alphas of up to 1.20% per month. Neither cross-sectional stock momentum nor co-variation with macroeconomic and liquidity risks can explain ETF momentum. Instead, the post-holding period returns are most consonant with the behavioral story of delayed overreaction. While ETF momentum survives multiple adjustments for transaction costs, it may be difficult to arbitrage as the profits are volatile and concentrated in ETFs with high idiosyncratic volatility or that hold low-analyst-coverage stocks.
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Macro Briefing | 22 November 2019
Bridgewater, world’s largest hedge fund, bets big on market drop: WSJ
Eurozone economy virtually stagnant for third month in Nov: IHS Markit
UK economy contracting at deepest rate in three years in Nov: IHS Markit
Japan’s economic activity is essentially flat in Nov: IHS Markit
Negotiations on NAFTA successor roll on; vote possible in weeks ahead: NY Times
US Leading Economic Index fell for the third month in October: CB
Existing home sales in US rose 1.9% in October: WSJ
Philly Fed’s regional mfg index posted stronger growth in November: Philly Fed
US jobless claims held steady at five-month high last week: CNBC
US business cycle index (ADS) rebounds after falling close to recession signal:
US Small-Cap Stocks Continue To Trail Large Caps In 2019
Advocates of small-cap equities keep talking about the possibility of a revival for these shares, but year-to-date results suggest otherwise, based on a set of exchange-traded funds.
Macro Briefing | 21 November 2019
Sondland says Trump directed Ukraine pressure campaign: Politico
US-China trade deal may be at risk if Trump signs Hong Kong bill: CNBC
China invites Americans for new trade talks: WSJ
Fed minutes show more rate cuts are unlikely: MW
Charles Schwab reportedly in talks to acquire TD Ameritrade: CNBC
OECD: Europe’s QE monetary policy deepens pain of negative rates: Bloomberg
German exports to US rose in Q3: Reuters
Israel fails to form a government; new elections (again) are likely: NPR
Share of Americans moving falls below 10% — lowest since 1947: NY Times
US commercial lending 1yr growth rate fell to +4.7% in Oct, lowest in 1-1/2 years:
US Business Cycle Risk Report | 20 November 2019
US economic growth has slowed but signs that the macro trend is stabilizing suggest that the recent downshift won’t lead to a recession in the immediate future. Nonetheless, the expansion appears to be increasingly vulnerable. Another round of shocks, expected or otherwise, could push the economy over the edge. For the moment, however, the numbers show that slow growth prevails.