● A Century of Wealth in America
By Edward N. Wolff
Review via Publishers Weekly
Wolff (Top Heavy), an economics professor at New York University, will remind many of Thomas Piketty’s Capital in the Twenty-First Century with this comprehensive and thorough study of the accumulation, distribution, and preservation of wealth in the United States. Wolff confirms the middle class’s increasingly precarious standing and the rise of income inequality. As to who the rich are in America, he shows that they are overwhelmingly white, married, highly educated, older, and self-employed, most likely in finance or business and professional services. And the remaining 99%? Their incomes have stagnated since the 1970s, despite the compensatory addition of many women to the workforce and huge increases in household debt levels—the latter, Wolff writes, just to maintain living standards, not to “binge” on consumption.
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Yields are still low but the Federal Reserve is expected to lift interest rates further. Conventional wisdom says that this scenario makes bonds a toxic asset class going forward. Maybe, but the analysis is more nuanced when we consider fixed-income from an asset allocation perspective, as a recent report from AQR Capital Management advises.
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UK prime minister asks EU for help with Brexit: Guardian
Trump favors Fed Governor Powell for next Fed chief: Politico
Analysts predict low returns across asset classes: Bloomberg
US Leading Index falls in Sep–first decline in 12 months: Conference Board
US jobless claims fall to 44-year low for week through Oct 14: MarketWatch
Philly Fed Mfg Index surprises forecasters with a solid rise for Oct: RTT
La Nina expected to bring warmer-than-usual temps to US this winter: CNBC

A rising number of investors are anxious about the “bull market in everything”, but the markets are calm, based on rolling 90-day volatility (standard deviation). It may be the calm before the storm, although research on volatility clustering suggests that the tranquil times can roll on for longer than expected. The tide will turn eventually, of course, and perhaps soon, but the rear-view mirror at the moment shows that the landscape is unusually serene across the board for the major asset classes in recent history, based on a set of exchange-traded products via rolling 90-day standard deviation of one-day percentage returns.
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China’s Q3 GDP growth rate ticks lower at 6.8% vs. year earlier: RTT
Spain set to impose direct rule on Catalonia on Saturday: Reuters
Year-ahead US inflation expectations tick down to 1.8% pace: Atlanta Fed
Dallas Fed chief: lower 10-year Treasury yield may be a warning sign: Reuters
US housing construction slows in September: HousingWire
Conservatives campaign against Yellen’s reappointment to Fed: Bloomberg
Treasury Secretary says stocks wil fall sharply without tax reform: LA Times
A new milestone for the Dow Jones Industrials: closing above 23,000: Reuters

Federal Reserve officials have been talking up the odds of another hike in interest rates and the Fed funds futures market is pricing in a near certainty of no less for the December monetary policy meeting. But the case for tighter policy may not be as strong as it appears, based on the latest data for M0’s real (inflation-adjusted) year-over-year change.
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Xi Jinping sees “new era” of influence and power for China: Guardian
Will China’s party congress move markets? Bloomberg
US industrial production rebounds more than expected in Sep: RTT
US homebuilder sentiment rises to 5-month high in October: Bloomberg
Import prices in US rise in Sep at strongest pace in over a year: Dow Jones
Economists: excess debt/high asset prices threaten global economy: VoxEU

GDP growth in the third quarter is widely expected to decelerate in the government’s “advance” estimate that’s due at the end of this month. Part of the projected slowdown is due to the temporary effects of hurricanes, according to analysts.
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Iraq in process of retaking oil fields from Kurds: Independent
UK inflation at five-year high, lifting rate-hike odds: Reuters
Brexit talks at risk of collapse: Independent
NY Fed manufacturing benchmark rises to 3-year high for Oct: MarketWatch
China’s central bank chief: China’s growth will rise to 7% in 2017’s H2: RTT
Senate GOP support for tax reform strengthens: Reuters
Fed’s rate hikes risk going into next recession with low inflation: Fed Watch
Goldman Sachs: Intensifying geopolitical risk is lifting oil prices: Bloomberg

Broadly defined commodities rebounded last week, posting the strongest gain for the major asset classes.
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