From the vantage of the past week of trading the case looks clear for calling recent market volatility a sign of a risk-off pivot. But if your time horizon is longer, there’s still room for debate, based on a set of ETF pairs for gauging the broad trend via prices through Aug. 7.
Macro Briefing: 8 August 2024
* Consumers trimmed their borrowing in June, according to Fed data
* Post-pandemic surge in travel appears to be ending
* US not currently in recession, says JPMorgan Chase CEO Jamie Dimon
* ‘Covered call’ ETFs fail to deliver protection from volatility in sell-off
* US 10yr-2yr Treasury yield curve is flat for first time in two years:
Utilities Lead US Equity Sectors This Year After Market Turmoil
Utility stocks have taken the lead in 2024 among US equity sectors following the market sell-off in recent days, based on a set of ETFs through Tuesday’s close (Aug. 6).
Macro Briefing: 7 August 2024
* Consumer spending will be a key factor for gauging US recession risk
* Markets expect Fed to head off a recession with rate cuts
* US trade deficit narrowed in June as exports outpace imports
* Americans continue to rack up credit card debt, which rose to a new high in Q2
* Sahm Rule-creator doesn’t recommend emergency Fed rate cut
* US stock market (S&P 500) claws back some of the loss after 3-day sell-off:
US Isn’t In Recession Now, But Downturn Risk May Be Rising
Judging by the current numbers, the US expansion almost certainly endures. There are well-founded concerns that the tide may be turning, but that’s still a speculative call. By comparison, published numbers to date, overall, speak clearly: growth still has the upper hand. That’s not written in stone, of course, but for this specific point in time it’s the odds-on favorite for describing current conditions.
Macro Briefing: 6 August 2024
* Biden convenes national security team amid fears of Iran attack on Israel
* US economy is starting to look “pre-recessionary”: Krugman
* Will the Fed announce an emergency rate cut? Unlikely, predict analysts, history
* ISM Services Index rebounds in July, showing key US sector strengthening
* Global economic growth eases for second month in July via PMI survey data
* US output expands “solidly” in July via Composite PMI Index, a GDP proxy:
Will Global Market Sell-Off Dethrone US Stocks’ 2024 Leadership?
The selling that roiled global markets late last week looks set to continue on Monday. Triggered by weaker-than-expected news for the US labor market, the surge in risk-off sentiment took a bite out of the high-flying market for American shares. But even after last week’s hit, US equities are still leading the major asset classes by a wide margin. In the current climate, however, that premium suggests US shares are still vulnerable to a period of “normalizing” performance comparisons.
Macro Briefing: 5 August 2024
* Does a surprising rise in unemployment signal a recession?
* Economist says Fed waited too long to cut interest rates
* Growth in China’s services activity strengthened in July
* Eurozone economy “stalls” in July via PMI survey data
* US 10-year yield fell sharply last week, settling at 3.79%–lowest since December:
Book Bits: 3 August 2024
● Demography and the Making of the Modern World: Public Policies and Demographic Forces
John Rennie Short
Summary via publisher (Agenda Publishing via Columbia U. Press)
John Rennie Short critically explores the implications of demographic change from a social and economic perspective and considers what this means for public policy. He shows how events as varied and important as the Arab Spring, migration from Africa to Europe, budget negotiations in the United States, and economic growth in India and Brazil – all seemingly diverse issues from around the world – are shaped by forces of demography. Using the demographic transition model as a framework, the book examines the demographic forces that underlie major social and economic issues, and in particular, the range of public policies that have been developed, adopted and rejected to meet these population challenges.
Total Return Forecasts: Major Asset Classes | 02 August 2024
The total return outlook for the Global Market Index (GMI) ticked lower in July, marking the first downshift in several months for this forecast. GMI’s long-term estimate now points to an annualized 7.0% performance, down slightly from the previous month, based on the average of three models (defined below). GMI is an unmanaged benchmark that holds all the major asset classes (except cash) according to market weights via a set of ETF proxies.