It had to end eventually. Whether last week’s shift in the pole position endures is something else entirely. But for the moment, US equities are no longer leading the horse race for the major asset classes year to date, based on a set of proxy ETFs through Friday’s close (Mar. 15).
Macro Briefing: 18 March 2024
* Fed will to keep rates higher for longer, economists advise in poll, but…
* BIS chief predicts rate cuts are still likely this year
* Another potential partial-government shutdown lurks, again, on Friday
* China reports firmer economic data in retail and industrial sectors, but…
* The ailing property market in China shows is still struggling
* Working in old age isn’t as effective as it seems for the retirement crisis
* US retail spending leveling off as consumers pull back:
Book Bits: 16 March 2024
● The Price is Wrong: Why Capitalism Won’t Save the Planet
Brett Christophers
Review via Financial Times
Why is it so difficult to wean renewable energy off public support? While higher interest rates and steel prices clearly haven’t helped, Christophers argues we’ve missed the answer for a structural reason: we are looking at the wrong measure. It isn’t just relative power prices that determine how many wind or solar parks get built; more important is how profitable entrepreneurs think these investments will be. And here’s the rub: the anticipated returns are unappealing. On average, renewable projects earn just 5 to 8 per cent on their equity, Christophers reports, compared to more than 15 per cent for oil and gas.
US Economic Growth Still Expected To Slow In Q1 GDP Report
A new round of nowcasts continue to estimate that US economic activity will downshift in next month’s release of first-quarter GDP data. Today’s revised estimate is based on the median for a set of nowcasts compiled by CapitalSpectator.com.
Macro Briefing: 15 March 2024
* A key source of US economic strength: workers don’t fear layoffs
* Commercial real estate woes weigh on cities’ finances
* Copper price surges amid concerns over supply risk
* Retail sales in US rebound in February after January’s steep decline
* US jobless claims remain low for week through Mar. 9
* US producer price inflation is hotter than expected for February:
Markets Still Expect Rate Cut In June, But Doubt Is Creeping Higher
The mixed news on inflation earlier this week didn’t help, but neither did sticky inflation news derail expectations that the Federal Reserve will start cutting interest rates in June. Yet uncertainty about the timing is creeping higher, as a confluence of factors muddy the outlook.
Macro Briefing: 14 March 2024
* Wall Street forecasters are playing catch-up with strong US economy
* House passes bill that will force either ban or sale of Tik Tok
* New data reaffirms that US is world’s leading oil producer
* Global oil demand expected to cool vs. 2023, predicts IEA
* Demand for mortgages rebounds as 30-year fixed rate dips below 7%
* US gasoline benchmark price rises to six-month high:
10-Year US Treasury Yield ‘Fair Value’ Estimate: 13 March 2024
The US 10-year Treasury yield continues to trade well above a ‘fair value’ estimate, based on the average of three models maintained by CapitalSpectator.com. The market premium continues to suggest that the benchmark rate’s upside potential is constrained, but at the same time recent history suggests a relatively quick decline toward fair value still faces long odds, arguably due to behavioral and other factors.
Macro Briefing: 13 March 2024
* It’s official: Biden and Trump secure delegates for November rematch
* US stock market (S&P 500) hits new record high despite stick inflation data
* House of Representatives will vote on Tik Tok ban today
* Higher-for-longer world for rates may be likely, but perhaps that’s OK
* Sticky inflation data take a bite out of bond and real estate ETFs
* Consumer spending in US rebounded in February via credit card data
* US consumer inflation posts mixed results for February:
Small Cap And Value Stocks Lag In This Year’s Rally
Shares of small companies and value stocks have had a tough time keeping up with the broad market in recent years, and the headwind for these risk factors is still blowing so far in 2024.