The rumors are true–a long holiday weekend
has been declared at the world headquarters
of The Capital Spectator.

After several days of feast and fête, the standard fare resumes on Monday, Nov. 30.

Happy Thanksgiving!

Consumer spending in the US continued to rise at a snail’s pace, rising 0.1% in October, according to this morning’s release from the Bureau of Economic Analysis. That’s the second month in a row for 0.1% growth, marking the weakest two-month period for consumption in eight months.
Continue reading →

Momentum has received a lot of attention in the asset-pricing literature over the past several decades, and for good reason. Trending behavior is a staple in markets. In contrast with other pricing “anomalies”, short-term return persistence—positive and negative—is a robust factor across asset classes. The fact that momentum is deployed far and wide in the money management industry and hasn’t been arbitraged away suggests that the persistence factor is persistent. The question is whether momentum as traditionally defined can be enhanced? Yes, according to a small but growing corner of research that looks at price trends through an “acceleration” lens.
Continue reading →

● US Q3 GDP growth revised up to 2.1% | Reuters
● Consumer confidence falls to 14-mo low in Nov | MarketWatch
● Richmond Fed: “manufacturing activity slowed” in November | Richmond Fed
● US Q3 corporate profits fall at steepest rate since recession | WSJ
● US home prices rise 5.5% YoY in Sep | CNBC

Fed Chair Janet Yellen yesterday reaffirmed the case for keeping interest rates near zero percent and raising rates slowly in the future. But the Treasury market seemed to have a mixed reaction. The 2-year yield–widely followed as the most-sensitive spot on the curve for rate expectations—ticked higher, rising to a five-and-a-half-year high of 0.94% yesterday (Nov. 23), based on constant maturity data at Treasury.gov. The benchmark 10-year yield, by contrast, slipped to 2.25%–comfortably below the recent high of 2.50% from mid-June.
Continue reading →

● Chicago Fed: US growth rate ticks up in Oct | Chicago Fed
● PMI: US mfg growth slows to 2-year low in Nov | Markit
● Fed’s Yellen argues for cautious policy for rate hikes | Reuters
● US existing home sales fall in Oct after sharp Sep gain | HousingWire
● German business sentiment ticks higher in Nov | Ifo
● German Q3 GDP growth confirmed at 0.3% quarterly growth | Reuters

US economic growth continued to weaken in October, according to this morning’s update of the Chicago Fed National Activity Index’s three-month moving average (CFNAI-MA3). Last month’s reading slipped to -0.20, the lowest since Mar. 2015. But even after the latest decline, this benchmark of economic activity remains well above its -0.70 tipping point that marks the start of recessions, according to Chicago Fed guidelines. Meantime, there are signs that the trend will firm in the final months of the year. One clue is the Atlanta Fed’s current GDPNow estimate of fourth-quarter GDP growth: 2.3% (as of Nov. 18), which reflects a moderate improvement over Q3’s sluggish 1.5% increase.
Continue reading →

The US economy is on track for a modest rebound in the fourth quarter, according to GDP projections from several sources. Although it’s still early for developing robust estimates for Q4, most economists are looking for improvement over Q3’s tepid 1.5% rise in GDP (seasonally adjusted annual rate).
Continue reading →

Emerging-markets equities enjoyed a solid rise last week among the major asset classes, based on a set of proxy ETFs. Vanguard Emerging Markets Stock (VWO) posted a solid 4.5% total return for the five days of trading through Nov. 20, edging out the number-two performer for the week, US real estate investment trusts (REITS), based on Vanguard REIT (VNQ).
Continue reading →