Focusing on one data set is always hazardous for analyzing the business cycle, but the ongoing decline in commercial and industrial (C&I) lending is drawing a crowd. The trend is worrisome, but it’s premature to draw broader conclusions for the US economy because most key indicators are still positively skewed.
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Financial and technology stocks remain the top sector performers for the trailing one-year period, based on a set of ETFs. The bullish momentum has cooled in recent weeks for these equities, but the same is true for the market generally, leaving the two sectors comfortably in the lead vs. the rest of the field.
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The persistence of low inflation will be a key topic at the Federal Reserve’s at the Jackson Hole Symposium that starts on Friday (Aug. 24). But as the world’s monetary elite prepare to discuss the finer points of “Fostering a Dynamic Global Economy,” Treasury yields are once again sliding, which implies that the crowd is anticipating that pricing pressure will weaken.
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The US economy in July expanded at a rate that’s fractionally below the historical trend, according to this morning’s update of the Chicago Fed National Activity Index (CFNAI). The monthly measure of the benchmark dipped from +0.16 in June to -0.01, or just below the zero mark that signals economic activity that matches the historical trend.
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Equities and fixed-income securities in emerging markets took the lead last week, posting the biggest gains among the major asset classes, based on a set of exchange-traded products. Meanwhile, US stocks fell for a second week, the first back-to-back weekly losses in three months, based on Vanguard Total Stock Market (VTI).
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● Big Money Thinks Small: Biases, Blind Spots, and Smarter Investing
By Joel Tillinghast
Summary via publisher (Columbia University Press)
Investors are tempted daily by misleading or incomplete information. They may make a lucky bet, realize a sizable profit, and find themselves full of confidence. Their next high-stakes gamble might backfire, not only hitting them in the balance sheet but also taking a mental and emotional toll. Even veteran investors can be caught off guard: a news item may suddenly cause havoc for an industry they’ve invested in; crowd mentality among fellow investors may skew the market; a CEO may turn out to be unprepared to effectively guide a company. How can one stay focused in such a volatile profession? If you can’t trust your past successes to plan and predict, how can you avoid risky situations in the future?
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The world headquarters of The Capital Spectator will be closing for a long weekend, starting… now. Our regularly scheduled programming will return shortly — on Monday, Aug. 21, to be precise. Cheers!

The US economy continued to exhibit a moderate growth bias through July. Although the monetary backdrop still presents a mild headwind, the majority of key indicators published to date suggest that recession risk remains low.
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The US dollar has had a rough ride so far in 2017. The Federal Reserve’s Trade Weighted US Dollar Index that tracks the major currencies has tumbled roughly 8% year to date through last week’s close. The greenback’s slide, however, has delivered a substantial return premium for US investors who own foreign assets in funds sans currency hedging.
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Stocks, real estate securities, and high-yield bonds took a hit last week as saber-rattling between the US and North Korea triggered a moderate round of de-risking. The leading beneficiary from last week’s push into safe havens: foreign government bonds in developed markets ex-US. This slice of fixed income posted the biggest gain among the major asset classes for the five trading days through Aug. 14, based on a set of exchange-traded products. The biggest loser: US real estate investment trusts (REITs).
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