Private nonfarm payrolls in the US are projected to increase by 231,000 (seasonally adjusted) in tomorrow’s January update from the Labor Department, based on The Capital Spectator’s median point forecast for several econometric estimates. The monthly prediction reflects a moderate deceleration in growth vs. December’s 240,000 gain.
Continue reading →

US jobless claims climbed 11,000 last week, which is no trivial amount. But this is bullish news. Why? Because the previous week’s extraordinary decline—down 42,000 for the week through Jan. 24 in today’s revision—was only moderately pared back. The thinking last week was that the shortened Martin Luther King holiday skewed the data, which inspired forecasts that today’s number would pop sharply higher in a bout of payback. The consensus forecast called a hefty gain today, with claims projected to rise to 290,000. But as today’s release shows, quite a lot of the recent slide remains intact in today’s report. The news translates to a bullish update for anticipating the near-term outlook for the labor market, starting with tomorrow’s official payrolls report from Washington.
Continue reading →

Growth picked up a bit at the start of the new year for the global economy, according to business survey data for January. The JPMorgan Global All-Industry Output Index ticked higher last month, rising to 52.8 from December’s 14-month low of 52.4. (A reading above the neutral 50.0 mark indicates expanding economic activity.) Yes, it’s a mild advance and it hardly marks a sharp reversal from the slowdown that’s been unfolding lately. But the worst fears from some corners of the economic forecasting realm look prematurely dark at the moment.
Continue reading →

● US Private-sector job growth cooled to 213,000 in January, ADP says | LA Times
● PMI: Stronger US services sector growth in January | Markit
● ECB cancels soft treatment of Greek debt in warning to Athens | Reuters
● Germany Factory Orders Rise Sharply In December, Tops Forecast | RTT
● China cuts bank reserve requirement to spur growth | Reuters
● Buffett: Fed rate hike not feasible | CNBC

It’s been a rough week for US economic data. With the exception of auto sales, which surged 13% in January, the numbers so far this week have been disappointing. This morning’s January release of the ADP Employment Report is hardly a washout, although it fell short of expectations. Nonetheless, private payrolls continued to expand above the 200,000-per-month mark in January. True, last month’s 213,000 gain is the lowest since last September. What’s more, today’s news follows updates in recent days of a hefty decline in consumer spending in December; a sharp slide in factory orders at 2014’s close; and a slower rate of growth in manufacturing via the ISM Index. It all looks rather worrisome, but it’s too soon to assume the worst.
Continue reading →

In a previous post I reviewed the basics of using the PerformanceAnalytics package in R for evaluating a simple 60/40 US stock/bond portfolio based on a pair of ETFs. Let’s round out that preliminary review by exploring a few additional applications before moving on to a deeper level of analysis in a future article, when we’ll consider the possibilities for enhancing a 60/40 mix.
Continue reading →

● US factory orders fall sharply, order books shrinking | Reuters
● US auto sales surge 13% in January | LA Times
● Eurozone retail sales rise for 3rd straight month in Dec | Eurostat
● PMI: Growth of Chinese business activity eases to 8-month low | Markit
● PMI: Eurozone economic growth improves | Markit
● PMI: Germany services growth improves at 2015’s start | Markit
● PMI: Sharp UK services growth sustained at start of 2015 | Markit

Private nonfarm payrolls in the US are projected to increase by 241,000 (seasonally adjusted) in tomorrow’s January update of the ADP Employment Report, based on The Capital Spectator’s median point forecast for several econometric estimates. The median projection matches November’s increase.
Continue reading →

Yesterday’s update on consumer spending for December looks pretty ugly. Consumption slid 0.3% on a monthly basis in 2014’s final month—the first monthly bout of red ink since the previous January and the deepest retreat in five years. The news prompted some pundits to declare that the sky was falling. But the headline number isn’t as bad as it looks. Why? Because private-sector wages are still rising at a healthy (and slightly faster) pace.
Continue reading →

The expected risk premium for the Global Market Index (GMI) continued to tick lower in January. GMI — an unmanaged, market-value weighted mix of the major asset classes — is projected to earn an annualized 3.5% over the “risk-free” rate for the long term. (For details on the equilibrium-based methodology that’s used to generate the forecasts, see the summary below). Today’s updated estimate, which is based on data through the close of last month, fell 10 basis points from the previous 3.6% projection.
Continue reading →