The historic and ongoing drought in California is getting harder to ignore in terms of its potential impact on the US economy down the road. The Golden State, after all, boasts the country’s largest GDP among the 50 states, representing a bit more than 13% of US output, based on 2013 data via the US Bureau of Economic Analysis. That’s well above the nearly 9% share for Texas, the second-biggest state economy. But as the dry spell persists, now in its fourth year, it’s reasonable to wonder if California’s growth prospects will suffer. In turn, if the biggest state wilts due to drought, what are the implications for the US?
Continue reading →

● Jobless Claims in U.S. Decline to Lowest Level in 5 Weeks | Bloomberg
● Sharpest rise in US service sector business activity for 6 months in March | Markit
● Consumer Comfort in U.S. Matches Second-Highest Level Since 2007 | Bloomberg
● France March Consumer Confidence Highest Since Nov 2010 | MNI
● Japan’s retail sales fall more than expected in February | RTT
● Bundesbank opposes more emergency funding for Greece | RTE

New filings for unemployment declined last week, the Labor Department reports, delivering a bullish surprise relative to expectations for a slight rise. The news offers another upbeat clue for thinking that the economy’s recent stumbles are a temporary soft patch rather than the start of deeper troubles.
Continue reading →

This week’s initial peek at the March economic profile for the US via Markit’s survey data for manufacturing delivered upbeat news, which takes some of the edge off for expecting trouble. Later today we’ll see the equivalent for the services sector. Economists via Econoday.com’s consensus forecast are anticipating that the PMI Services Index will hold on to recent gains, in which case we’ll have a new clue for expecting brisk growth for this corner of the economy. But while the tail-end of the first-quarter is showing mild signs of revival, the outlook for Q1 GDP continues to stumble.
Continue reading →

● US Durable Goods Orders Stumbled in February | NY Times
● US Mortgage applications at highest level since January | CNBC
● Euro zone M3 money supply grows 4% in February | Investing.com
● German consumer morale hits highest level in 13-1/2 years: Gfk | Reuters
● French GDP Growth Confirmed At 0.1% | RTT

US Real estate investment trusts (REITs) are still firmly in the lead among the major asset classes for the trailing one-year period. The Vanguard REIT (VNQ) has gained a hefty 28.6% on a total return basis through yesterday (Mar. 24) over the past 250 trading days (aka the one-year performance window). For the moment, no other broadly defined asset group comes close to that red-hot record.
Continue reading →

● New-home sales in US soar to 7-year high in Feb | USA Today
● U.S. consumer prices rebound, underlying inflation firming | Reuters
● US Manufacturing PMI hits five-month high in March | Markit
● French Business Confidence Weakens In March, But Near Long-Term Avg | RTT
● Germnay’s Ifo Business Climate Index Edges Upwards | Ifo
● Oil prices dip as China’s strategic reserves fill, U.S. stocks balloon | Reuters

The case for expecting trouble for the US economy looks a bit weaker in light of today’s update on manufacturing activity in March. Markit’s flash estimate of its purchasing managers index (PMI) for this cyclically sensitive sector ticked higher for this month. Score one for the optimists who say that the recent run of soft numbers is only a temporary affair born of a harsh winter.
Continue reading →

It’s only natural that investors have a preference for focusing on the positive. Everyone wants to earn higher returns and excel in all things financial. But for most folks, there’s more opportunity on the negative side of money management: reducing if not eliminating the mistakes. It’s easier to add value by pinching errors vs. trying to emulate Warren Buffett. But this subtle but powerful truism is too often overlooked, which probably explains why market-trailing returns are the rule rather than the exception.
Continue reading →

● US existing-home sales rise 1.2% in February | USA Today
● Chicago Fed: US economic growth slows in February | TradingFloor.com
● PMI: Eurozone growth gathers momentum, near 4-year high | Markit
● PMI: German private sector output rises at strongest rate in 8 months | Markit
● PMI: French output rises for 2nd successive month in March | Markit
● PMI: China’s factory output contracts, touching 11-mo low | Markit
● PMI: Japan’s production growth slows to weakest since Oct 2014 | Markit