● Revised GDPNow model estimate for US Q1 growth holds at +2.2% | Atlanta Fed
● US wholesale inventories rose in Jan as sales tumbled | Reuters
● Faltering US economy leads global slowdown | Markit
● Is Passive Investment Actively Hurting the Economy? | New Yorker
● How To Be Wrong As An Investor | Wealth of Common Sense
● Who Gets the Blame for the Slowing Economy? | NY Times
● Google’s AI program beats GO grandmaster | Wired

The Federal Reserve will leave its Fed Funds rate unchanged at the current target range of 0.25% to 0.50% at its policy meeting next week, writes The Wall Street Journal’s John Hilsenrath–reportedly one of the most “well-connected” journalists on Fed matters. Supporting evidence for anticipating that the central bank will stand pat includes the recent numbers on key Treasury yields, the Effective Fed Funds rate and the market’s inflation expectations.
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● US small-business owners’ confidence eases in Feb | MarketWatch
● US Redbook Retail Sales Index up 0.7% in the first week of Mar | MNI
● Are Central Banks Really Out of Ammunition? | Project Syndicate
● Fed Likely to Stand Pat on Rates, Keep Options Open | WSJ
● UK industrial production ticked up in Jan | MarketWatch

Failure isn’t an option, but it happens. Modeling the possibility that a portfolio strategy will stumble isn’t exactly cheery work, but it’s a productive and necessary exercise for stress testing what the future can do to the best-laid plans for investing. The good news is that there’s a rainbow of options for estimating the potential for trouble. But it’s usually best to start with a basic framework before venturing into more exotic realms.
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● Federal Reserve’s US employment yardstick sours in Feb | MarketWatch
● US Consumer Spending Up Slightly in Feb | Gallup
● Fed officials set battle lines on rate hikes ahead of FOMC meeting | Reuters
● While market debates commodities bottom, inflation warnings rise | CNBC
● China Exports Plunge In February | RTT
● Japan Q4 GDP Slump Revised Up Slightly; Spending Remains Weak | MNI

Risky asset roared back to life last week, led by a surge in surge in equities in emerging markets, based on a set of ETF proxies for the major asset classes. For the third straight week, there was a risk-on bias for the five trading days through Mar. 4.
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● US payrolls surge in Feb while wages drop | Bloomberg
● US trade deficit widens as exports hit 5-1/2 year low | Reuters
● US Q1 GDP growth estimate rises to +2.2 via GDPNow model | Atlanta Fed
● Is US inflation (finally) rising? | FT
● Spreads and Recession Watch, March 2016 | Econobrowser
● German factory orders fall less than expected in Jan | Reuters
● Japan’s Kuroda signals central bank easing done for now | Reuters

● Concrete Economics: The Hamilton Approach to Economic Growth and Policy
By Stephen S. Cohen and J. Bradford Delong
Summary via publisher (Harvard Business Review Press)
History, not ideology, holds the key to growth. Brilliantly written and argued, “Concrete Economics” shows how government has repeatedly reshaped the American economy ever since Alexander Hamilton’s first, foundational redesign. This book does not rehash the sturdy and long-accepted arguments that to thrive, entrepreneurial economies need a broad range of freedoms. Instead, Steve Cohen and Brad DeLong remedy our national amnesia about how our economy has actually grown and the role government has played in redesigning and reinvigorating it throughout our history. The government not only sets the ground rules for entrepreneurial activity but directs the surges of energy that mark a vibrant economy. This is as true for present-day Silicon Valley as it was for New England manufacturing at the dawn of the nineteenth century.
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American companies added 230,000 workers to payrolls in February, a solid improvement over the upwardly revised 182,000 gain for January (based on seasonally adjusted data). Today’s update from the Labor Dept. handily beat the consensus forecast for a rise in the low 180k range. The year-over-year growth rate for private-sector jobs continued to tick lower, but the annual pace of 2.18% through last month continues to reflect a bullish tailwind for the labor market.
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The US stock market has had a rough ride since last summer, dispensing a run of dark signals that align with bear-market forecasts (see here and here, for instance). Does the rally in recent weeks mark a return of the bull market? Maybe, but the evidence is still thin for deciding that the bear-market bias has passed. To understand why, let’s review some numbers.
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