There’s no shortage of reasons to be cautious on the near-term outlook for markets, but reviewing trend behavior via several sets of ETF pairs continues to reflect a positive trend for risk assets through yesterday’s close (Jan. 8, 2023).
Macro Briefing: 9 January 2024
* Deal to avert US government shutdown faces precarious path
* Investors warn governments about high levels of public debt
* China is now world’s top exporter, thanks to surging sales to Russia
* US small business owners remain “very pessimistic about economic prospects”
* Labor market will be “first and most important clue” for Fed’s next move
* US consumer credit surged in November–biggest rise since March 2022:
Desperately Seeking Yield: 8 January 2024
The runup in yields for most of the major asset classes has peaked, based on a trailing 1-year payout rates for a set of ETFs through Friday’s close (Jan. 5, 2024). That’s hardly surprising, given the slide in government bond yields in recent months, but it’s a reminder that the low-hanging fruit of relatively rich yields is increasingly in the rear-view mirror.
Macro Briefing: 8 January 2024
* House and Senate leaders announce deal to avert government shutdown
* Expected decline in US core inflation for December supports Fed easing outlook
* China shadow bank Zhongzhi files for bankruptcy
* Will Xi’s new economic plan for China trigger a new trade war?
* US payrolls rose more than forecast in December
* S&P 500 earnings growth is expected to slow to a crawl for Q4:
Book Bits: 6 January 2024
● Any Happy Returns: Structural Changes and Super Cycles in Markets
Peter C. Oppenheimer
Excerpt via Goldman Sachs
Each era has its unique problems and, in many cases, opportunities. As we enter the Post-Modern Cycle, humanity faces a series of major challenges. Changing geopolitical alliances, the future of work, ageing populations and the environment are likely to be prominent issues for the foreseeable future.
From an investment perspective, the end goal looks exciting. A successful transition to a zero-carbon world would not only generate significant improvements in health but, clearly, would hold the prospect of marginal units of energy to be consumed at close to zero cost (both financially and in terms of the planet’s resources).
US Q4 GDP Growth Expected To Support Soft Landing Outlook
This month’s official report of US fourth-quarter economic activity, scheduled for release on Jan. 25, will likely confirm that output expanded at a moderate pace, according to a set of nowcasts compiled by CapitalSpectator.com.
Macro Briefing: 5 January 2024
* Americans set a new online holiday shopping record in 2023
* Global economy posts modest growth in December: PMI survey data
* US Composite PMI, a GDP proxy, indicates modest expansion in December
* Eurozone headline inflation rebounds in December
* US jobless claims fell last week, sticking close to a multi-decade low
* US private payrolls rose more than expected in December via ADP estimate:
Markets And Fed Minutes See Path For Rate Cuts In 2024
Uncertainty is as thick as ever for diving what awaits in the year ahead, but there’s still a growing consensus building that the Federal Reserve will soon start cutting interest rates. Although some analysts caution that the odds for dovish policy changes aren’t as high as some forecasts suggest, the crowd is nonetheless convinced that the Fed funds target rate is on track to ease in the months ahead.
Macro Briefing: 4 January 2024
* Iran explosion adds to Middle East tensions
* Fed officials expect rate cuts in 2024: Fed minutes for December, but…
* Fed officials also said rates could remain high ‘for some time’
* US manufacturing slowed in December, ending ‘Lousy’ Year: ISM Mfg Index
* China services sector growth picks up in December
* Atlanta Fed’s nowcast model estimates US growth at moderate 2.5% for Q4
* US job openings continued easing in November:
Total Return Forecasts: Major Asset Classes | 3 January 2024
The long-term return forecast for the Global Market Index (GMI) ticked lower in December, easing to an expected 6.7% annualized total return, based on the average for three models (defined below). GMI is a market-value-weighted portfolio that holds all the major asset classes (except cash) via a set of ETF proxies. Today’s revised performance estimate for the benchmark is slightly below last month’s outlook.