In a mixed year for equity risk factors, several flavors of large-cap shares stand out as this year’s winners, based on a set of ETF proxies through Monday’s close (Dec. 4). Small-cap stocks are on track to trail by a wide margin in relative terms for the calendar year, but the recent rally in this corner is inspiring new forecasts that this slice of equity risk premium is poised to outperform in the new year.
Macro Briefing: 5 December 2023
* A key part of global trade at risk from attacks on vessels in Red Sea
* Moody’s cuts China credit rating to negative due to rising debt risks
* China Services PMI rises to 3-month high in November
* Eurozone Composite PMI contracts for sixth straight month in November
* Uber shares rise on news company will join S&P 500
* War on inflation is a hefty headwind for renewable energy
* US factory orders fell much more than expected in October:
Total Return Forecasts: Major Asset Classes | 4 December 2023
The expected return for the Global Market Index (GMI) held steady in November. Today’s revised, long-run forecast for the benchmark — a market-value-weighted portfolio that holds all the major asset classes (except cash) via a set of ETF proxies — is unchanged at a relatively lofty 6.9% ex ante annualized total-return performance, matching last month’s estimate.
Macro Briefing: 4 December 2023
* Talk of rate cuts is ‘premature,’ says Fed Chairman Powell
* Nuclear fusion takes another step toward solution to humanity’s energy needs
* Gold trades at new record high — above $2100/oz.
* Hydrogen offers three big, timely opportunities re: climate change
* Federal Reserve faces growing climate-related protests to alter lending rules
* US construction spending increased more than expected in October
* US ISM Mfg Index contracts for 13th straight month in November
* US is producing crude oil at record levels:
Book Bits: 2 December 2023
● Outsmart the Money Magicians: Maximize Your Net Worth by Seeing Through the Most Powerful Illusions Performed by Wall Street and the IRS
Christopher R. Manske
Summary via publisher (McGraw Hill)
A Wall Street insider draws back the curtain on how financial firms take advantage of individual investors—and delivers the information and insights you need to turn the tables. Nationwide brokerage firms have perfected the secrets for how to legally fool the rest of us into giving them our hard-earned money. Written by a renowned leader and financial reform advocate who has seen every trick in the book firsthand, Outsmart the Money Magicians reveals how biased the financial system often is, and helps you see through the illusions, understand exactly what is happening with your money, and make investing and tax decisions accordingly.
Major Asset Classes | November 2023 | Performance Review
Global markets surged in November—except for commodities, which posted the only decline among the major asset classes last month, based on a set of ETF proxies.
Macro Briefing: 1 December 2023
* Israel resumes war in Gaza after week-long truce expires
* Pressure rises to phase out fossil fuels at climate summit in Dubai
* Fed officials remain cautious on talking about rate cuts
* 60/40 stock/bond portfolio benchmark set for best monthly return in 3 years
* US jobless claims edge higher as continuing claims at 2-year high
* Chicago PMI rises to 17-month high in November, signaling expansion
* US consumer spending and inflation cooled in October:
Rate Cut Expectations Fuel Bond Market Rally
Investors are increasing their collective bets that the Federal Reserve will soon start cutting interest rates – a bet that went into overdrive this week and ignited the strongest rally in bonds in 40 years.
Macro Briefing: 30 November 2023
* Here are the conditions that would foster rate cuts in 2024
* US bonds on track for best monthly performance since 1985
* US mortgage rates fell last week for the fourth time in five weeks
* China factory activity falls for second month in November
* Eurozone inflation decelerates more than expected in November
* US Q3 GDP revised up to +5.2% seasonally adjusted annual rate:
A New Book Takes A Deep Dive At Solving The Portfolio Problem
Financial “wisdom” is said to be cyclical rather than cumulative, but that’s unfair. At least in the dominion of portfolio management and design, academics and money managers have made great strides in decoding Mr. Market’s cryptic signals over the past half century. The challenge, having led the proverbial horse to water, is making him drink.