● US existing home sales rise 1.7% in April | MarketWatch
● Fed’s Rosengren tells FT: US ‘on the verge’ of meriting June rate hike | Reuters
● Euro-Area Growth Seen Slowing via PMI survey | Bloomberg
● Brexit ‘would spark year-long recession’, UK Treasury warns | BBC
● Bookmaker odds suggest UK will remain in EU | OCA
● Japan’s economy remains on a “moderate recovery” track | MNI
Book Bits | 21 May 2016
● The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism
By Arun Sundararajan
Summary via publisher (MIT Press)
Sharing isn’t new. Giving someone a ride, having a guest in your spare room, running errands for someone, participating in a supper club—these are not revolutionary concepts. What is new, in the “sharing economy,” is that you are not helping a friend for free; you are providing these services to a stranger for money. In this book, Arun Sundararajan, an expert on the sharing economy, explains the transition to what he describes as “crowd-based capitalism”—a new way of organizing economic activity that may supplant the traditional corporate-centered model. As peer-to-peer commercial exchange blurs the lines between the personal and the professional, how will the economy, government regulation, what it means to have a job, and our social fabric be affected?
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Hawkish Fed Chatter And Another Slide In Base Money Supply
A second interest rate hike may be near, advised New York Fed President Bill Dudley on Thursday. “If I’m convinced that my own forecast is on track, then I think a tightening in the summer, the June-July time frame, is a reasonable expectation.” The release of Fed minutes from the last policy meeting fall in line with that thinking. So, too, does the April update on real (inflation-adjusted) base money supply (M0), which contracted in year-over-year terms in April, marking the third decline in the past four months.
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Initial Guidance | 20 May 2016
● Fed’s Dudley points to interest rate hike in June or July | MarketWatch
● Jobless claims fall back to earth in mid-May | MarketWatch
● US Leading Economic Index Rises More Than Expected In April | RTT
● Philly Fed Mfg Index Unexpectedly Fell In May | RTT
● Chicago Fed Index: US Economic Growth Picked Up in April | Chicago Fed
● Bloomberg Consumer Comfort Index rises in mid-May | Seeking Alpha
Chicago Fed: 3-Month US Macro Trend Remains Sluggish In April
Economic growth in the US eased in April to a four-month low, according to this morning’s update of the three-month average of the Chicago Fed National Activity Index (CFNAI-MA3). The reading for last month dipped to -0.22, the lowest since last December’s -0.28 reading.
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Bear-Market Risk For US Equities Remains Elevated
The bear-market bias that’s been lurking for the US stock market since last autumn remains intact, according to several econometric applications. Although equities overall continue to trade near all-time highs, the mild downward slope in pricing in recent months suggests that the market’s capacity to rally is wearing thin. What would kill the bear-market threat? A convincing run of strong economic reports. Granted, the macro trend isn’t terrible, as outlined in yesterday’s US economic profile. But the numbers aren’t particularly encouraging either. The net result: the market’s in a state of limbo, waiting for a convincing signal, for good or ill. But as long as the incoming macro figures are mixed, as they have been this year, the bear-market bias for equities will roll on. After a powerful and long-running bull market for 2009-2015?, the crowd needs a higher level of convincing to keep the party going at this late date.
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Initial Guidance | 19 May 2016
● Fed minutes signal rate hike firmly on the table for June | Reuters
● Business Inflation Expectations Rise Slightly to 1.9% | Atlanta Fed
● Despite lowest rates in a year, mortgage appls down 1.6% last week | CNBC
● Study Projects TPP Will Provide Modest Gains for US Economy | WSJ
● US ISM Survey Chiefs: Hoping For Better Months Rest of Year | MNI
Slower US Growth Expected Via April Update For Chicago Fed Index
Economic growth has been winding lower lately and the deceleration trend is on track to continue in April, based on The Capital Spectator’s analysis of the three-month average of the Chicago Fed’s National Activity Index (CFNAI-MA3). Tomorrow’s report for the first month of the second quarter is expected to show that the Fed bank’s business cycle benchmark will tick lower. The Capital Spectator’s average forecast of CFNAI-MA3 by way of several econometric estimates calls for a mild decline to -0.25, which is slightly below the -0.18 reading for March. The -0.25 projection is still well above the tipping point that marks the start of recessions, but the negative print continues to point to below-trend growth for the US.
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US Business Cycle Risk Report | 18 May 2016
US economic growth remains sluggish, hinting at the possibility that a new recession may be near. But the numbers don’t align with a pessimistic intuition. The probability is extremely low that April marked the start of an NBER-defined downturn, based on published reports to date. Projecting a broad set of indicators into the near-term future suggests that the US will continue to sidestep a macro slump. Yes, the outlook could deteriorate if the incoming numbers stumble. But for the moment, recession risk remains low.
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Initial Guidance | 18 May 2016
● US home construction rebounds in April | MarketWatch
● US Industrial Output Up in April On Higher Utility Demand | CFO
● Inflation in US rises in April at fastest rate in 3 years | MarketWatch
● Strong US data bolsters second-quarter growth prospects | Reuters
● GDPNow Q2 GDP estimate for US ticks down to +2.5% | Atlanta Fed
● Redbook: US retail sales +0.5% YoY midway through May | TradingEcon
● Fed officials say several rate hikes are possible in 2016 | Reuters
● Rate Hike Fear In US Drags Down Stocks | Fox Business