The implied inflation outlook via Treasury yield spreads in recent months has been pricing in a possibility that inflation has peaked. The forecast is debatable, but right or wrong the government bond market is doubling down on that bet.
Continue reading →

Impeachment risk is rising for Trump: Bloomberg
US and China start new round of trade talks: WSJ
White House plans to roll back clean water rules: Axios
Trump administration promotes fossil fuels at climate change meeting: Time
UK’s May heads to Europe to salvage her crumbling Brexit deal: Guardian
Macron offers to raise minimum wages after French protests: BBC
US sanctions North Korean officials amid stalled nuclear talks: ABC
Former Fed Chair Yellen is worried about excessive corporate debt: CNBC
US job openings rebounded in Oct, near record high: CNBC

US and foreign stock markets fell sharply last week as broadly defined commodities and bonds gained ground, according to a set of exchange-traded products representing the major asset classes. Growing concern over several economic and political risk factors have been weighing on stocks and the week ahead appears set to start with a new round of volatility.
Continue reading →

China summons US envoy over Huawei CFO’s arrest in Canada: Bloomberg
Europe’s top court rules UK can unilaterally halt Brexit process: CNN
Wall Street banks pore over data in search of business-cycle clues: Bloomberg
UK Prime Minister May must decide today on putting Brexit deal to a vote: Time
Familiar risks await US economy in 2019: NY Times
Eurozone GDP growth in Q3 dipped to slowest pace in four years: RTE
US hiring slowed in Nov; wage growth at highest rate in nearly a decade: WSJ
Consumer debt posted biggest gain in 11 months in Oct: Bloomberg
Wholesale trade sales in US up 6.8% for year through Oct: MDM
US Consumer Sentiment Index unchanged at elevated level in Dec: MW

● Delivering Alpha: Lessons from 30 Years of Outperforming Investment Benchmarks
By Hilda Ochoa-Brillembourg
Summary via Amazon
From a former World Bank Executive and renowned investor―a detailed roadmap to adding consistent, sustainable value to globally diversified portfolios. For many investors, alpha is akin to the Holy Grail. Risk-adjusted returns above benchmarks―alpha―are particularly challenging to achieve even with a sound strategy. Hilda Ochoa-Brillembourg is an expert on alpha. Over the past four decades, she and her team consistently exceeded benchmarks and delivered appreciable value added on their investments. In Delivering Alpha, she reveals the principles and methods employed in her investment strategies, along with insights drawn from her personal life. She shows how timing, market awareness, price, and relative value to the investor are critical drivers of effective investment decisions. Ochoa-Brillembourg also debunks common investment myths that often trip up both new and experienced investors.
Continue reading →

The pace of hiring at companies slowed in November, according to this morning’s monthly update from the Labor Department. The softer-than-projected gain pared the year-over-year trend to a three month low. The economy’s still creating a healthy number of jobs, but today’s results reaffirm the view that US growth has peaked.
Continue reading →

The latest bout of turbulence in the stock market has reshuffled leadership for US equity factor strategies, leaving the low-volatility strategy as this year’s front runner, based on a set of ETFs. Growth and momentum are still posting gains this year, but they’re now trailing, slightly, low vol. One thing that hasn’t changed: value stocks remain in the hole on a year-to-date basis, based on trading for 2018 through yesterday’s close (Dec. 6).
Continue reading →

Trump to name State Dept spokeswoman as UN Ambassador: The Hill
Congress OKs short-term spending bill to avert gov’t shutdown: Reuters
Fed Chair Powell says US labor market ‘very strong’: Bloomberg
ISM Non-Mfg Index in Nov near highest print in 13 years: MW
By contrast, US Services PMI for Nov reflects relatively slow growth: IHS Markit
Factory orders fell in Oct — biggest monthly slide in more than a year: Reuters
US productivity grew 2.3% in Q3, slower vs. Q2: Fox
US jobless claims fell last week, but remain near 5-month high: MW
Trade deficit for US increased to a 10-year high in Oct: CNBC
US private employment growth slowed in Nov to +179k: ADP
US job cuts fell in Nov vs. Oct, but annual change is up over 50%: CG&C
PMI: Global economic growth edged up in Nov, reaching 3-mo high: IHS Markit

Hiring growth slowed in November among US companies, according to this morning’s update of the ADP Employment Report. Payrolls increased 179,000 last month, down from 225,000 in October. As expected, the annual pace of growth also ticked lower — just barely — although rounding the year-over-year change to one digit leaves the year-over-year trend at a healthy 2.0% for a second month – the fastest rise in over two years.
Continue reading →

Early futures trading points to another rocky session for the US stock market today, in part due to rising concern over trade relations with China. Judging by the current outlook for US economic output in the fourth quarter, however, the macro trend still looks set to post moderate growth in GDP for 2018’s final three months, based on a set of nowcasts compiled by The Capital Spectator.
Continue reading →