Hurricane Michael ravages Florida, heads to Carolinas: CNN
US arrests Chinese military intel official for economic espionage: NY Times
US intel: Saudi crown prince ordered detention of journalist Khashoggi: CNBC
US futures on Thursday point to another wave of selling: CNBC
Trump says Fed ‘Has Gone Crazy’ after sharp down day in stocks: BBG
US Treasury Sec: stock market slide is ‘normal correction’: CNN
US producer prices rebounded in September: Reuters
Wholesale inventories in US increased a strong 1% in August: MarketWatch
Business inflation expectations for Sep tick up to 2.3%, a 6-mo high: Atlanta Fed
Recession risk may be rising for California’s economy: NY Times
US stock market fell 3.3% on Wed, biggest daily drop since Feb: CNBC

Gold is deemed an essential piece of the asset allocation pie in some corners. The reasons vary, depending on the investor, although it’s not uncommon to hear rationales that sound more like religious sermons on the mystical properties of the yellow metal. From an econometric perspective, gold’s attributes for portfolio design are relatively ordinary by way of closely aligning with the inverse return of the US dollar. As such, using gold in portfolios can and arguably should be viewed as a quasi-forex trade as opposed to an all-weather hedge that can never go wrong.
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Is China’s $1 trillion-plus Treasury portfolio a risk factor in a trade war? NY Times
Trump renews threat to slap more tariffs on Chinese imports: Reuters
IMF: investors are underestimating risk of a new financial crisis: Bloomberg
US Treasury secretary warns China on currency devaluation: FT
Hurricane Michael may be strongest storm to strike Florida’s Panhandle: WaPo
Nikki Haley, US ambassador to UN, surprises GOP with resignation: The Hill
Trump says Fed is hiking rates too fast: Politico
Sears reportedly close to bankruptcy filing: CNBC
US Small Business Optimism Index remains close to 45-year high in Sep: NFIB

The search for deep-value plays in the ETF realm delivered a short list in August, when markets were humming far and wide. Let’s take a fresh review of the landscape in the wake of recent selling, which has pinched nearly every corner of global stocks, bonds, and real estate securities. Commodities have fared better in recent weeks, but this slice of the major asset classes was already suffering from a longer-run perspective and so there are still plenty of relative bargains on this front.
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IMF: trade war will pinch economic growth in US and China in 2019: CNN
Trump ignores UN’s dire report on climate change: NY Times
Hurricane Michael strengthens as it approaches Florida’s panhandle: Reuters
US Treasury yields edge up to new multi-year highs in early Tues trading: CNBC
Nobel prize in economics awarded for climate change and tech innovation: WaPo
No political fix expected for rising US debt load: Bloomberg

With the exception of broadly defined commodities, all the major asset classes lost ground in the first week of October, based on a set of exchange-traded products. Stocks in emerging markets suffered the biggest setback among widespread losses in global markets.
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Did GOP trade majorities in Congress for a conservative Supreme Court? CNN
Senate Majority Leader: opposition to Kavanaugh is ‘gift’ for GOP: WaPo
US Sec of State cited “fundamental disagreement” with China: BBG
N. Korea ready to allow inspections of its missile, nuclear sites: Reuters
Khashoggi case is a crisis for US-Saudi ties: WaPo
UN climate report: high risk of crisis from climate change by 2040: NY Times
Tropical Storm Michael may hit Florida’s Gulf Coast as hurricane: CBS
China’s central bank rolls out stimulus to shore up economy: SCMP
Far-right candidate wins first round of Brazil’s presidential election: BBC
US job growth cooled in Sep as unemployment rate fell to 3.7%: Reuters
10yr Treasury yield spiked to 3.23% last week, highest since 2011:

● Mastering the Market Cycle: Getting the Odds on Your Side
By Howard Marks
Adapted excerpt via Bloomberg
Every once in a while, when the economy and the markets are humming, there arises another belief that things are now different: that cycles have been put to an end, such that we no longer have to worry about the upswing turning into a downswing. For example, in pre-Depression 1929, an auto company president declared, “There will be no interruption of our present prosperity.” In 1996, while the tech bubble was building, the Wall Street Journal reported, “The big, bad business cycle has been tamed.” And former Treasury Secretary and New York Federal Reserve President Tim Geithner wrote in his autobiography, “Stress Test: Reflections on Financial Crises,” that in 2003, on the way to the global financial crisis, “There was growing confidence that [financial innovations and better monetary policy] had made devastating crises a thing of the past.”
In other words, the assumption was that good times in the economy can roll on forever; assets can appreciate without end; and investors needn’t worry about a correction, bear market or crash. Such “different-this-time” thinking is sorely wrong and potentially dangerous.
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Private payrolls in the US increased 121,000 in September, well below Econoday.com’s consensus forecast for a 175,000 gain. Last month’s advance was also dramatically weaker than August’s revised surge of 254,000, according to this morning’s release from the Labor Dept. Despite the surprisingly softer report, the year-over-year trend ticked up to 2.0%, a two-year high.
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Yesterday’s sharp selloff in US stocks delivered haircuts far and wide, but the setback left growth and momentum factors in the lead for year-to-date equity performance, based on a set of exchange-traded funds (ETFs). While large-cap value suffered the smallest loss in yesterday’s rout among the major equity factor buckets, this slice of US equities remains in last place in 2018 through yesterday’s close (Oct. 4).
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