Among the recurring themes in the global capital markets in recent years is the ongoing preeminence of the US stock market as a performance leader. When measured in terms of relative returns for the major asset classes, it’s been game, set, match. That’s good news for investors who’ve maintained healthy allocations to US equities in the last several years–and a source of frustration for everyone else. The supremacy of American stocks will end at some point, but for the moment there’s no sign that a changing of the guard is at hand.
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● Treasury market anticipating a September rate hike…
● As US dollar rises to 5-week high…
● Meantime, gold tumbles to 5-year low…
● Commodity prices in general remain weak…
● US stocks (S&P 500) briefly traded above all-time closing high on Monday…

The US economy has had a rough first half in 2015, but the pace of growth is picking up. The Atlanta Fed’s GDPNow model projects a second-quarter expansion of 2.4% (seasonally adjusted annual rate), based on the July 17 estimate. That’s a modest rise, but it represents an encouraging rebound from Q1’s mild contraction. It’s debatable if we’ll see the rate of growth continue to improve in the second half of the year. Meantime, a broad review of economic and financial indicators continues to reflect a positive trend for the macro profile through June. In other words, the current data strongly suggest that last month wasn’t the start of a new recession.
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● US housing starts in June rise to highest level since 2007…
● US consumer inflation up 0.3% in June, down a bit from May…
● US consumer sentiment dips slightly in July…
● Oil down, US dollar up in early Monday trading…
● Europe’s current account surplus retreats in May.

● A Wealth of Common Sense: Why Simplicity Trumps Complexity in Any Investment Plan
By Ben Carlson
Summary via publisher (Bloomberg/Wiley)
A Wealth of Common Sense sheds a refreshing light on investing, and shows you how a simplicity-based framework can lead to better investment decisions. The financial market is a complex system, but that doesn’t mean it requires a complex strategy; in fact, this false premise is the driving force behind many investors’ market “mistakes.” Information is important, but understanding and perspective are the keys to better decision-making. This book describes the proper way to view the markets and your portfolio, and show you the simple strategies that make investing more profitable, less confusing, and less time-consuming.
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Today’s report on residential construction for June suggests that the housing market is bouncing back after a rough winter. Housing starts totaled 1.174 million units last month (seasonally adjusted annual rate)—close to a post-recession high. Meanwhile, newly issued building permits jumped to an eight-year high—a sign that construction activity will remain strong in the months ahead. Not surprisingly, home builders are upbeat these days. Industry sentiment in July rose to just shy of a ten-year high, according to yesterday’s update from the National Association of Home Builders (NAHB). In short, the housing sector is on track to provide additional support to the economy for the foreseeable future.
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● US jobless claims fall for first time in a month…
● As Philly Fed index in July reflects slower growth in manufacturing…
● While US home builder sentiment rises in July, close to 10-year high…
● Bloomberg’s consumer comfort benchmark was close to flat last week…
● Fed Chair Yellen says she prefers to raise rates “in a prudent and gradual manner.”

Housing starts are expected to total 1.078 million units (seasonally adjusted annual rate) in tomorrow’s update for June, according to The Capital Spectator’s average point forecast for several econometric estimates. The projection represents a moderate increase in residential construction activity vs. the previous month.
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In theory, small-cap and value stocks offer solid premiums over their large-cap and growth counterparts. In the short term, however, turning theory into real-world profits can get messy.
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● US industrial output rises in June but mfg. is unchanged…
● Fed Chair Yellen sees rate rise this year…
● NY Fed index shows modest pick-up in July manufacturing activity…
● Mortgage applications in US slide 1.9% for week through July 10…
● Greece reluctantly enacts austerity measures to receive bailout money.