The Federal Reserve has been trying to lift the inflation trend in recent years with limited success. Key measures of the price trend remain below the central bank’s 2.0% target and recent data point to more of the same for the immediate future. But there are hints that the inflation is stabilizing, perhaps laying the groundwork for creeping higher in the new year.
Continue reading →

Republicans aim to prevent Moore from becoming a Senator: The Hill
Trump claims progress on changing rules to cut US trade deficit: Bloomberg
Lebanon’s political crisis threatens wider troubles for Middle East: WaPo
Economists upbeat on US growth outlook in new Philly Fed survey: MNI
China’s industrial output and retail spending growth tick down in Oct: RTT
China leads world with fastest supercomputers: CNET
Maybe low stock-market volatility is normal: Bloomberg
US economy near full employment; implies more rate hikes: Fed Watch
US year-ahead inflation outlook ticks up to 2.6%, a 6-month high: NY Fed

Real estate investment trusts (REITs) in the US surged last week, posting the strongest gain among the major asset classes, based on a set of exchange-traded products. The rise marks the second weekly increase in a row for securitized real estate.
Continue reading →

Iran-Iraq earthquake kills hundreds: USA Today
Trump meets Philippine president, says they have “great relationship”: BBC
GOP leaders predict the House will pass tax-reform bill this week: Politico
US Consumer Sentiment pulls back in Nov after reaching 13-year high: CNBC
Why is the US Treasury yield curve flattening? Bloomberg
Dir. of research at SF Fed: wage growth is above trend and picking up: MNI
Eurozone on track for strong growth and low inflation: Bloomberg
US Q4 GDP nowcast continues to print at strong +3.85%: Now-casting.com

● Dollars and Sense: How We Misthink Money and How to Spend Smarter
By Dan Ariely and Jeff Kreisler
Summary via publisher (HarperCollins)
We think of money as numbers, values, and amounts, but when it comes down to it, when we actually use our money, we engage our hearts more than our heads. Emotions play a powerful role in shaping our financial behavior, often making us our own worst enemies as we try to save, access value, and spend responsibly. In Dollars and Sense, bestselling author and behavioral economist Dan Ariely teams up with financial comedian and writer Jeff Kreisler to challenge many of our most basic assumptions about the precarious relationship between our brains and our money. In doing so, they undermine many of personal finance’s most sacred beliefs and explain how we can override some of our own instincts to make better financial choices.
Continue reading →

Investing in a Multi-Asset Multi-Factor World
Alexandar Cherkezov (Invesco), et al.
August 31, 2017
In this article, we advance the use of factor investing across multiple asset classes. It turns out that style factors well established in the equity domain – such as value, momentum or quality – do extend to other asset classes as well. Even more so, multi-asset multi-factors significantly expand the investment opportunity set relative to a traditional multi-asset universe. Seeking to exploit this potential, we put forward an innovative diversified risk parity strategy that is designed to strive for maximum diversification in the multi-asset multi-factor world. To illustrate the strategy’s merits, we investigate its stylized facts vis-à-vis more standard allocation approaches.
Continue reading →

Trump says US will no longer tolerate “chronic trade abuses”: BBC
Differences within GOP on tax reform may delay (or derail?) bill: Politico
The odds for substantial tax reform don’t look promising: The Atlantic
US jobless claims rise more than expected for week through Nov 4: Reuters
This year’s stock market rally is all about earnings: MarketWatch
Buffett, Gates, and Bezos have more wealth than half US population: Fortune
Is another government shutdown lurking for the US? Fiscal Times
US Q4 GDP growth estimate holds steady at a solid 3.3%: Atlanta Fed

As horse races go, this one’s not even close. The momentum factor continues to leave the rest of the field in the dust for the major US equity factor strategies, based on the one-year trend via a set of ETFs.
Continue reading →

Trump gives China a pass for “taking advantage” of US on trade: CBS News
US firms announce trade deals with China during Trump’s trip: Reuters
CBO: GOP tax reform will raise federal deficit by $1.7 trillion over 10yrs: CNBC
China’s inflation rises to fastest pace in 9 months in October: RTT
Is the GOP’s hold on Congress at risk after Dem’s electoral victories? NY Times
Citigroup CEO says US gov’t may issue its own digital  currency: Bloomberg
Will EU use Brexit deadlock to force UK firms to relocate to Europe? Telegraph
Morningstar’s new style box profiles alt funds’ diversification benefits: M-Star
Conventional wisdom is wrong: ETFs have been tested under fire: Bloomberg

A widely followed measure of the Treasury yield curve dipped on Tuesday (Nov. 7) to its flattest level in a decade, based on daily data published by Treasury.gov. The gap between the 10-year and 2-year rates fell to 69 basis points yesterday – the lowest since Nov. 2007.
Continue reading →