Red ink dominates 2024’s opening month for most of the major asset classes. The upside exceptions for the performance profile so far: US stocks, commodities and junk bonds. Otherwise, year-to-date losses prevail, based on a set of ETFs through Friday’s close (Jan. 26).
Macro Briefing: 29 January 2024
* Biden vows to retaliate after deadly attack on US forces in Jordan
* Iran distances itself from attack that killed 3 US soldiers in Jordan
* This week’s Fed policy decision may drop clues re: a March rate cut
* Rising real interest rates amid falling inflation is new challenge for Fed
* Falling inflation, solid growth give US economy edge over rest of world
* US borrowing by companies and consumers is picking up
* Evergrande, China’s giant property developer, is ordered to liquidate
* China approves over 40 AI models for public use over past 6 months
* US consumer spending accelerated in December:
Book Bits: 27 January 2024
● Busting the Bankers’ Club: Finance for the Rest of Us
Gerald Epstein
Review via Kirkus Reviews
An economics professor catalogs the countless ways in which the financial system fails ordinary consumers while favoring the wealthy.
“Finance,” writes Epstein, “is an essential and highly productive part of our economic system; but the financial system can also be a source of stagnation, instability, inequality, and crisis.” The essential inequities in the system have been laid bare at several points, but especially in the financial crisis of 2007-2008, when many corporations and financial institutions walked away unscathed at a cost to taxpayers of $50,000 to $120,000 per household—and not the mega-wealthy households, you can be sure.
Recession Forecasts Take A Beating After Strong Q4 GDP Growth
The only thing that was genuinely surprising in yesterday’s fourth-quarter report on US economic activity was the strength of the increase. The positive directional bias, by contrast, has been relatively clear for weeks, if not longer. Assuming, of course, that you were analyzing a broad array of indicators and avoiding the rookie mistakes of estimating recession risk.
Macro Briefing: 26 January 2024
* US jobless claims rose last week but remain low. But…
* Jobless claims may be an unreliable indicator of the labor market
* New US home sales rose more than expected in December
* Chicago Fed Nat’l Activity Index indicates softer growth in December
* Japan stock market approaching record high set in 1989
* US durable goods orders unchanged in December following November surge
* US GDP growth in Q4 beats expectations by wide margin:
Momentum Leads US Equity Factor Returns So Far In 2024
Will 2024 mark the return of the momentum factor to performance spotlight? This risk premium’s star faded in 2023, but there are hints that a rebound may be brewing for this slice of the equity risk premium, based on a set of proxy ETFs through Wednesday’s close (Jan. 24).
Macro Briefing: 25 January 2024
* Political blowback is a risk for the Fed and its policy decisions in 2024
* Middle East crisis is starting to weigh on European economy
* Eurozone business activity contracts for eighth month in January: PMI survey
* Revenue surges for globally critical semiconductor firm ASML
* Tesla is forecasting a sharp sales slowdown this year
* US business activity picks up in January via PMI survey data:
US Growth Slowdown Expected For Thursday’s Q4 GDP Report
The Bureau of Economic Analysis appears set to report tomorrow (Jan. 25) that US output slowed sharply in the fourth quarter after Q3’s unusually strong gain. But Thursday’s GDP report is also expected to show that growth was moderate in the final three months of 2023 – news that will support the ‘soft landing’ view that’s been popular with some economists.
Macro Briefing: 24 January 2024
* Trump appears set to be GOP nominee after winning NH primary
* Eurozone economy continues contracting in January via PMI survey data
* China central bank announces policy support to boost economic growth
* Economic shockwaves spreading from Red Sea turmoil
* Thursday’s US Q4 GDP report may confirm that ‘soft landing’ is here
* Climate economics is relevant just about everywhere
* S&P 500 edged higher on Tuesday, setting another record high:
Looking For The ‘Missing Link’ In Failed Recession Models
The resilience of the US economy in 2023 was a surprise for some (many?) economists. From the start of last year through the first half, and in some case into early Q3, an ample supply recession warnings flowed like wine from the lips of the punditocracy. A careful reading of the data suggested otherwise, but high-risk warnings draw a crowd and so the dark forecasts endured and prospered, running well beyond their shelf life.