New jobless claims dropped last week by a sizable 14,000 to a seasonally adjusted 351,000. That’s a post-Great Recession low, for the second time. Mid-February also witnessed the 351,000 level and the numbers are knocking on this door again.
Defending Milton Friedman’s Monetary Policy Prescriptions (Again)
Paul Krugman notes that Amity Shlaes has misinterpreted Milton Friedman’s legacy on monetary matters, as I did earlier this month. But then he loses me when he claims “that this time the Fed did all that Friedman denounced it for not doing in the 1930s. The fact that this wasn’t enough amounts to a refutation of Friedman’s claim that adequate Fed action could have prevented the Depression.” Huh?
The Beta Investment Report | US Bond ETFs (Broad) | 3.14.12
Here’s the second installment of our review of ETFs that can be used to replicate the Global Market Index, a passive, unmanaged benchmark that’s comprised of the major asset classes. In the previous edition, we looked at broadly defined U.S. equity funds. This time the focus is on the short list of investment-grade U.S. bond funds that cover the waterfront in this corner of the capital markets.
Retail Sales Rise In February, But Gas Prices Climb Too
Retail sales are strengthening so far in 2012, according to the Census Bureau. February sales jumped a robust 1.1% on a seasonally adjusted basis, the best monthly increase since last September. There was also good news for the annual pace of retail sales: for the first time in five months, the 12-month percentage change in retail sales rose, suggesting that the worrisome deceleration trend in consumer spending may have run its course.
The Forecast File: US Retail Sales For February
Today’s update of February retail sales, scheduled for release at 8:30 a.m. eastern, will bring some fresh numbers for thinking about the recent deceleration in personal consumption expenditures. Here’s a brief look at some of the commentary and predictions:
Retail Sales in U.S. Probably Rose in February by the Most in Five Months
Bloomberg | Mar 13
Retail sales in the U.S. probably rose in February by the most in five months, spurred by the strongest demand for automobiles since 2008, economists said before a report today. The 1.1 percent rise would follow a 0.4 percent gain in January, according to the median forecast of 81 economists surveyed by Bloomberg News. Excluding autos, purchases may have climbed 0.7 percent.
Tactical ETF Review: 3.12.2012
“The rally in risk assets is running out of steam,” warns The Economist. Maybe, but that’s a forecast. The recent past, meanwhile, has been quite steamy, according to a recap of the major asset classes via our usual list of ETF proxies.
Book Bits For Saturday: 3.10.2012
● Stewardship: Lessons Learned from the Lost Culture of Wall Street
By John G. Taft
Review and interview with author via Marketplace
The term “Stewards of Capital” used to mean the businesses of Wall Street, which were supposed to hold and grow assets for clients. Now, it’s a quaint archaic term that decades ago, gave way to “Masters of the Universe.”
John G. Taft, the CEO of RBC’s wealth management arm in the U.S., is trying to hit the brakes and take the Wayback Machine to a time when Wall Street businesses were there to serve clients – not serve themselves from a big buffet table full of money. Taft said that investors have lost faith that the market will grow their wealth over time, and he calls himself “someone who is dedicated to making sure that the financial system does more good on the earth than it does bad.”
February Delivered Another Respectable Month Of Job Growth
Today’s employment report from the Labor Department showed that job growth slowed in February, but not enough to raise serious doubts that the economy is doomed to stumble in the immediate future. Private-sector payrolls rose 233,000 last month. That’s down from January’s 285,000 gain, but it’s strong enough to keep hope alive that growth generally will prevail for the foreseeable future.
Research Review | 3.9.2012 | Portfolio Strategy
Building a Better Mousetrap: Enhanced Dollar Cost Averaging
Lee M. Dunham (Creighton University) and Geoffrey Friesen (University of Nebraska) | Dec 2011
This paper presents a simple, intuitive investment strategy that improves upon the popular dollar-cost-averaging (DCA) approach. The investment strategy, which we call enhanced dollar-cost-averaging (EDCA), is a simple, rule-based strategy that retains most of the attributes of traditional DCA that are appealing to most investors but yet adjusts to new information, which traditional DCA does not. Simulation results show that the EDCA strategy reliably outperforms the DCA strategy in terms of higher dollar-weighted returns about 90% of the time and nearly always delivers greater terminal wealth for reasonable values of the risk premium. EDCA is most effective when applied to high volatility assets, when cash flows are highly sensitive to past returns, and during secular bear markets. Historical back-testing on equity indexes and mutual funds indicates that investor dollar-weighted returns can be enhanced by between 30 and 70 basis points per year simply by switching from DCA to EDCA.
Jobless Claims Rose Again Last Week
New jobless claims jumped 8,000 last week to a seasonally adjusted 362,000, the Labor Department reports. That’s the third weekly increase in a row and the biggest weekly gain since late-January. In addition, the four-week moving claims average inched higher for the first time in two months. Are those reasons to worry? Well, yes. You (still) can’t take anything for granted in macro these days, least of all the idea that a recovery is destiny. Having said that, now’s a good time to roll out the standard caveat that weekly claims are a volatile series and to the extent that we can draw any conclusions here it arises from the trend. On that front, fortunately, the news is still encouraging.