● Predicting the Markets: A Professional Autobiography
By Edward Yardeni
Q&A with author via Barron’s
Barron’s: Are we heading for a trade war that will derail the markets?
Yardeni: The president is hard to predict, which makes the stock market’s reaction hard to predict. Back in the ’90s, the bond vigilantes disciplined Washington over inflation. Now we see the Dow vigilantes. The stock market is the one poll Trump follows. If it continues to decline, it will make him realize that [imposing tariffs] isn’t a good way to proceed.
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It’s been a turbulent year for US stocks so far, but technology shares are an exception as this corner of the market roars higher in 2018. These firms have outperformed both the broad market as well as the other major sectors on a year-to-date basis, based on a set of ETF proxies.
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Special counsel Mueller subpoenas Trump Organization re: Russia: LA Times
White House denies Trump will fire national security adviser: Bloomberg
UK, US, Germany condemn Russia for chemical attack in UK: WaPo
US imposes sanctions on Russia for US election meddling: Reuters
Saudia Arabia seeks nuclear weapons if Iran does: CNN
White House preparing tariffs, investment restrictions on China: NY Times
US jobless claims drop to 226,000, near 50-year low: MarketWatch
Regional Fed mfg indexes point to ongoing employment growth: 24/7 Wall St
US import prices up more than forecast in February: Reuters
Homebuilder confidence fell in March over worries of meeting demand: CNBC
Federal loans to students: largest asset in US financial accounts: dshort.com

Consumer spending has been soft in recent months, prompting some analysts to forecast trouble for the economy later this year. Perhaps, but looking through the monthly noise continues to paint an upbeat profile for retail sales. The growth rate has decelerated lately, but the year-over-year comparisons remain upbeat.
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Conor Lamb, maverick Democrat, wins special election in Penn: NY Times
Senate OKs bill to roll back Dodd-Frank Wall Street reforms: The Hill
Trump picks Larry Kudlow as new White House economic adviser: CNBC
Kudlow supports strong dollar, tough stance on China: Bloomberg
US retail sales decline for third straight month in February: Bloomberg
US producer price inflation up slightly more than expected in Feb: Reuters
Business inventories up sharply in US for Jan as sales stumble: Reuters
Businesses’ inflation expectations for year ahead tick up to 2.1%: Atlanta Fed
10yr-2yr Treasury yield spread falls to 55 bp, approaching lowest level since 2008:

The case for holding a portfolio that’s diversified across markets and asset classes is built on the assumption that return correlations will remain below 1.0 (perfect positive correlation) by more than a trivial degree. To the extent that you own assets that move independently of one another you’ll reap the rewards of diversification, which is widely celebrated as the only true free lunch in investing. Fortunately, correlations for the major asset classes are usually below 1.0. But the numbers vary and persistently low and negative correlations are rare.
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Special House election in Pennsylvania too close to call: The Hill
Trump fires Sec. of State Tillerson, replacing him with CIA director: LA Times
Jobless rate on track to fall to 3%, unless Fed policy changes: Bloomberg
5 things to watch in today’s release of US retail sales report: MNI
OECD: Global growth on track for robust trend in 2018 and 2019: RTT
US inflation slows in February after running hot in January: Reuters
US small business optimism rises to highest in over 30 years: Bloomberg
Do political compromises  supporting Merkel threaten Germany’s boom? NY Times
Central banks reconsider tools to reach elusive inflation targets: Bloomberg

The US federal government on Monday reported its biggest budget deficit in February in six years. By some accounts, the news offers another reason for projecting that Washington’s red ink and inflationary pressures will heat up in the months and years ahead.
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House GOP ends Russia probe, finds no collusion: The Hill
Kudlow cited as favorite as new economic adviser to Trump: Bloomberg
Trump blocks Broadcom’s bid for Qualcomm, raising policy questions: Reuters
Republicans try to pull out win in today’s special House election in Penn: Time
UK expected to take “extensive measures” against Russia in poisoning case: BBC
US gov’t’s budget deficit in Feb is biggest in six years: Bloomberg
Boston Fed President: trade tariffs will have slight impact on economy: WaPo
Various measures of wages reflect muddled trend: NY Times
Wage growth can still vary quite a bit when jobless rate is low: WCEG

Equities and real estate investment trusts (REITs) led most markets higher last week. Rebounding after a weak start to this month’s trading, nearly all the major asset classes posted gains in the first full week of March, based on a set of exchange-traded products.
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