US retail sales are expected to increase 0.2% in tomorrow’s June report vs. the previous month, according to The Capital Spectator’s average point forecast for several econometric estimates. The mean prediction reflects a sharp deceleration in growth vs. the previous month’s 1.2 percent rise.
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It’s hard to overestimate the importance of modeling tail risk when it comes to the care and feeding of investment portfolios. But where to begin? The topic of studying, estimating and otherwise dissecting rare but extreme market events can be a black hole of analytical possibilities and econometric complexity. It’s also too important to be left as a plaything for rocket scientists. With that in mind, here begins the first in a series of statistical investigations into the realm of return distributions when the tail wags the dog.
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● Europe says it has a reached a new bailout deal for Greece…
● Which means there’s a new basis for talking about details for aiding Greece…
● Meanwhile, Fed head Janet Yellen says a rate hike is due later this year…
● China is world’s biggest oil importer for 2nd month…
● As oil prices ease amid talks on Iran nuclear deal…
● And global desktop computer sales slump ahead of Windows 10 launch.

● A Giant Reborn: Why the US Will Dominate the 21st Century
By Johan Van Overtveldt
Summary via publisher (Agate)
In the current chaotic political climate it seems risky to say any country will be able to maintain its current status. But Van Overtveldt provides a measured, insightful, and thoroughly engaging examination of the evidence. In his richly detailed style and straightforward explanations, he masterfully lays out a case for why America, against many pundits’ best predictions, is set up to continue its 20th-century success into this millennium. A Giant Reborn shows readers that the reports of America’s death, to paraphrase the father of American literature, have been greatly exaggerated.
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There’s renewed talk of a looming US recession these days. One argument that’s topical is the view that we’re overdue for a downturn. The current expansion, which began in mid-2009 (based on NBER data), is now six years old, which ranks as above average for the post-World War II era. By some accounts, that’s a smoking gun. But it’s debatable if the age of expansions per se is truly a factor that determines the timing of contractions. Financial and economic context, in other words, is critical. Meantime, some economists argue that because the recovery from the Great Recession has been slow, the length of the expansion will be longer than usual. In any case, the current profile suggests that recession risk is low, based on the published numbers to date.
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● US jobless claims increased to a 5-month high…
● As Bloomberg’s Consumer Comfort Index eased from a 2-month high…
● And the average US mortgage rate fell to 4.04% last week…
● Meanwhile, a new new deal for Greece inspires optimism…
● While China’s stock market rout shows signs of stabilizing…

The bullish glow for US stocks has faded lately, but one thing that hasn’t changed is the strong relative performance of the health care sector. This slice of the US market continues to maintain a sizable performance edge over the rest of the field, posting a nearly 22% total return for the trailing one-year (252 trading day) period. But in a sign of the times, even the Health Care Select Sector SPDR (XLV) is showing the strains of the latest risk-off trade for the market overall. Although XLV closed above its 200-day moving average yesterday (July 8), the fund slipped below its 50-day average.
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● Fed policymakers maintained a dovish tone in the latest FOMC minutes…
● Consumer credit in the US increased 5.7% in May vs. year ago…
● US mortgage applications increased 4.6% for week through July 3…
● Germany’s trade surplus reached record high in May…
● Greece faces a deadline today for new proposals…
● But is staying in eurozone the bigger risk for Greece?

The IMF this week recommended that the Federal Reserve delay its first hike in interest rates until we see “clear signs of wage and price inflation, and sufficiently strong economic growth.” It’s debatable if those conditions apply, although many analysts say nay at the moment. In any case, sober economic analysis may not matter as long as the Greek crisis stalks the macro landscape.
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● The end game for Greece ends on Sunday…
● And the Greek leader calls for a new deal with Europe…
● Meanwhile, US job openings tick up to a record high in May…
● As Gallup’s US economic confidence index sticks to a 7-month low…
● And the US trade gap in May widened as exports slow amid global headwinds…
● China’s stock market continues to slide…
● A rout that may have implications for economic reforms.