Was That A Bear Market For US Stocks? Is It Over?

The S&P 500 inched higher again yesterday (June 7), closing at at 2112.13–the highest level since last July. The all-time high— 2130.82 on May 21, 2015—is now within shouting distance. The latest upside momentum gives the bulls fresh confidence for arguing that the bear market is over—or perhaps there was never a bear-market in the first place. In any case, the stock market has mounted an impressive rally since the February bottom and for the moment the upside bias remains intact.
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Is The Weak Labor Market A Smoking Gun For The Business Cycle?

The recent slowdown in job growth in the US will likely convince the Federal Reserve to forgo another interest rate hike at its June 14-15 policy meeting. But Fed Chair Janet Yellen kept the door open for squeezing policy at some point. “I see good reasons to expect that the positive forces supporting employment growth and higher inflation will continue to outweigh the negative ones,” she advised in a speech on Monday. “As a result, I expect the economic expansion to continue, with the labor market improving further and GDP growing moderately.”
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A Buying Spree Lifted All The Major Asset Classes Last Week

In a rare display of uniformly bullish behavior, all the major asset classes posted gains last week, based on a set of proxy ETFs. Emerging-market stocks led the field higher during the shortened US trading week. For the second week in a row, the Vanguard Emerging Market ETF (VWO) was the top performer, posting a 2.6% total return for the four trading days through June 3.
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Book Bits | 4 June 2016

● The Rise and Fall of Nations: Forces of Change in the Post-Crisis World
By Ruchir Sharma
Summary via publisher (W.W. Norton)
Shaped by his twenty-five years traveling the world, and enlivened by encounters with villagers from Rio to Beijing, tycoons, and presidents, Ruchir Sharma’s The Rise and Fall of Nations rethinks the “dismal science” of economics as a practical art. Narrowing the thousands of factors that can shape a country’s fortunes to ten clear rules, Sharma explains how to spot political, economic, and social changes in real time. He shows how to read political headlines, black markets, the price of onions, and billionaire rankings as signals of booms, busts, and protests. Set in a post-crisis age that has turned the world upside down, replacing fast growth with slow growth and political calm with revolt, Sharma’s pioneering book is an entertaining field guide to understanding change in this era or any era.
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Labor Dept: US Job Growth Slows To A Crawl In May

US job growth fell hard last month, the Labor Department reports. Private-sector payrolls increased by a thin 25,000 in May, the smallest monthly gain in five years. Even adding the estimated loss of 30,000-plus workers due to the Verizon strike last month still leaves payrolls in a dire state via the latest monthly profile. It could be noise, of course–it’s always hazardous to make assumptions about the economy from one data point. Nonetheless, the sight of the year-over-year growth rate in private employment dipping below the 2% mark for the first time in two years suggests that the recent deceleration in the labor market recovery is picking up speed.
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Risk Premia Forecasts: Major Asset Classes | 3 June 2016

The expected risk premium for the Global Market Index (GMI) continued to tick higher in May. For the third consecutive month, GMI’s projected return for the long run over the risk-free rate increased vs. the previous month’s estimate.  GMI—an unmanaged market-value weighted mix of the major asset classes—is projected to earn an annualized 3.5% risk premium in the long term, which is moderately higher vs. last month’s estimate. (For details on the equilibrium-based methodology that’s used to generate the forecasts each month, see the summary below.)
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