Asset classes don’t usually post gains in each and every calendar year in a given decade, but sometimes the exception is the rule. That was certainly the case for gold. As a new report from the World Gold Council reminds, everyone’s favorite precious metal had a very good decade through the close of 2010.
US GDP FORECASTS
The first estimate of 2010’s fourth-quarter GDP for the U.S. arrives on Friday and the consensus forecast is expecting the Bureau of Economic Analysis will report a 3.7% real annualized increase. Assuming the guess is accurate, that would be a robust acceleration from the 2.6% rate posted for last year’s Q3. A 3.7% gain for Q4:2010 would also be the best pace since last year’s first quarter, which coincidentally logged a 3.7% increase.
DECONSTRUCTING THE ECONOMIC CYCLE…AGAIN
Have we solved the mystery of the business cycle yet? It may be tempting to answer “yes” after tomorrow’s release of the Financial Crisis Inquiry Commission’s final report on the causes that gave us the financial and economic crisis of 2008.
TONIGHT’S STATE OF THE UNION SPEECH, ECONOMICS & POLITICS
President Obama delivers the State of the Union address tonight and the economy, of course, will be the topic du jour. Considering the venue, no one will be surprised to learn that a heavy dose of politics will be part of the mix. Here’s a sampling of the chatter on the intersection of the dismal science and Washington’s favorite sport as it relates to tonight’s show…
Obama State of the Union: spending, but restraint
AP/Jan 25
Eager to show some budget toughness, President Barack Obama will use his State of the Union address to call for a five-year freeze on all discretionary government spending outside of national security, the White House said Tuesday.
MARKET FOCUS | 1.25.2011 | LARGE CAPS VS. SMALL CAPS
Large-cap stocks will outperform small caps over the medium to long term, BNY Mellon Beta Management predicts. “Looking at the differential between the expected returns of large cap and small cap stocks, it appears that large caps have a good chance of outperforming small stocks over the next decade,” Mark Keleher, CEO at the company, says in a press release today.
RISK ANALYSIS @ WORLD ECONOMIC FORUM
The annual World Economic Forum is set to begin, but already there’s a sea of reports and commentary flowing from the confab in Davos. One of the highlights is Global Risks 2011 Sixth Edition. As a preview, here are some excerpts from the report:
ARE STOCKS STILL CHEAP ON A GLOBAL BASIS?
Yes, according to a new report from Morgan Stanley Smith Barney’s global investment committee. “Despite the recent rally, global equities are still priced at a forward P/E ratio of 13, at the lower end of their 40-year historical range,” advises the committee’s latest monthly update (Jan 2011) for clients.
GLOBAL CHATTER ABOUT INTEREST RATES
European Central Bank head Jean-Claude Trichet tells The Wall Street Journal that higher interest rates may be near. He’s not alone when it comes to considering a tighter monetary policy.
NABE SURVEY: BRIGHTER OUTLOOK FOR GROWTH & JOBS
A NEW LEADER IN THE EMERGING MARKET ETF SPACE
Vanguard Emerging Market (VWO) is now the largest ETF in the emerging market equities category measured by portfolio assets. The fund held $46.2 billion last week, according to Bloomberg, just ahead of the long-time leader iShares MSCI Emerging Markets (EEM). Both ETFs track the same index: MSCI Emerging Markets.