US GDP growth in the second quarter is on track to accelerate, based on the median estimate of several forecasts compiled by The Capital Spectator. If accurate, economic output is set to strengthen to a real 3.6% increase (seasonally adjusted annual rate) in Q2, a solid improvement over the subdued 2.3% increase reported for Q1.
Continue reading →

Deadly clashes at Gaza border as US opens embassy in Jerusalem: NY Times
US lawmakers stunned by Trump’s decision to help Chinese company: The Hill
Fed officials have mixed views on flattening yield curve: Bloomberg
German GDP growth in Q1 slows to 0.3% from 0.6% in previous quarter: RTT
China’s economic data for April points to slower growth: Reuters
Turkey’s president plans to tighten grip on economy: Bloomberg
Rising oil futures vs physical markets sending conflicting signals: Reuters
MSCI to add 234 mainland Chinese firms to its emerging markets index: CNBC
Policy sensitive 2-year Treasury yield reaches 2.55%–highest since 2008: CNBC

The US equity market rebounded last week, posting a gain after two straight weekly declines. The advance topped performances for the major asset classes, based on a set of exchanged-traded products.
Continue reading →

US officials say investing in N. Korea possible after denuclearization: Bloomberg
US prepared to impose sanctions on European firms in Iran: WSJ
Gaza protests build ahead of US opening of its Jerusalem embassy: Reuters
Trump reverses course, offering help to ZTE, a Chinese electronics firm: NY Times
Cleveland Fed President: Fed may raise rates above 3%: MarketWatch
St Louis Fed President: yield curve could invert as early as September: MNI
US import prices up less than forecast in April: CNBC
US consumer sentiment holds steady at elevated level in May: MarketWatch

● Investing for the Long Term
By Francisco Parames
Summary via publisher (Wiley)
World-renowned investor Francisco García Paramés shares his advice and tips on making smart investments in this must-have book for those looking to make smarter choices for their portfolio. Investing for the Long Term is divided in two parts. The first is formed by three chapters covering Francisco’s education and first steps, his initial experience as an investor working alone, and the team work after 2003. The second part of the book covers the cornerstones of Francisco’s philosophy. It starts with a chapter in Austrian economics, in his view the only sensible approach to economics, which has helped him enormously over the years. It follows with an explanation of why one has to invest in real assets, and specifically in shares, to maintain the purchasing power of ones savings, avoiding paper money (fixed income) at all costs. It follows with an explanation of why one has to invest in real assets, and specifically in shares, to maintain the purchasing power of ones savings, avoiding paper money (fixed income) at all costs.
Continue reading →

News reports covering yesterday’s April report on consumer inflation emphasize that the monthly increase fell short of the consensus forecast. The cooler-than-expected gain is cited by some analysts as a factor that will allow the Federal Reserve to slow its plans for raising interest rates. Perhaps, but reviewing the annual pace of inflation and the latest estimates for GDP growth in the second quarter suggests that it’s premature to assume that the central bank is set to back off its recent plans for three or four rate hikes this year.
Continue reading →

ISIS still a threat ahead of Iraq’s election on Saturday: USA Today
Iran supports Syria’s right to respond to Israel’s attacks: Reuters
Oil on track for 2nd weekly gain amid rising Mideast tensions: Bloomberg
Is Trump walking into a trap in upcoming N. Korea meeting? Politico
US jobless claims remain low, sticking close to 49-year low: MW
US consumer inflation ticks up to 2.5% annual rate in April: Reuters
Bank of England leaves interest rates unchanged: Independent
US stock market rally continues with S&P 500 near 2-month high: Reuters

Predicting recessions is difficult bordering on impossible, but one prediction you can count on is that there will always be a surplus of newly minted warnings that a new downturn is near. Periodically I review recent examples (here’s last year’s update and its predecessor in 2016) and it’s time for a fresh look at how analysts continually convince themselves that the risk of economic contraction appears to be threatening.
Continue reading →

Israel fires missiles at Iranian targets in Syria: BBC
Trump meets 3 Americans freed from North Korea: The Hill
Trump’s decision on Iran echoes prelude to Iraq war, some analysts say: Reuters
Saudi Arabia will pursue nuclear weapons if Iran does: CNN
China set to benefit if West isolates Iran: Bloomberg
Wholesale US inflation for April eased to 2.6% y-o-y from 3.0%: MarketWatch
A measure of US wholesale trade continued to grow in March: CNBC
Atlanta Fed president: inflation “already effectively on target”: MNI
US corporations facing massive $4 trillion refinancing wall: Bloomberg

The strategy of favoring low-priced stocks over their high-price counterparts has been floundering in recent years, inspiring some investors to give up on the value tilt for money management. But a recent run of reporting suggests that a new dawn may be at hand for this corner of investing.
Continue reading →