After the release of my new book last week (Nowcasting The Business Cycle), I’ve received questions from readers outside the US on whether the title’s available in foreign markets. The short answer: Yes. For starters, the book is listed on several Amazon sites around the world. For example, you can find it at Amazon in the UK and in Germany. Within the US, by the way, it’s available through several of the usual suspects beyond Amazon, including Barnes & Noble. One book, but a world of possibility for purchasing.

Retail sales increased sharply in March, rising 1.1%, the best monthly gain in well over a year. The news brings another clue for thinking that the recent economic slowdown was a temporary affair related to the weather. Indeed, today’s report also revived the year-over-year trend in retail spending. For the moment, March is shaping up as a positive turning point of significance for the big-picture state of US macro.
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The latest weakness in the US stock market raises a question: Is this the start of a bear market or just a correction in an ongoing bull market? For the moment, there’s a good case for arguing that the latest bout of weakness is of a temporary nature. Why? Long-term momentum, although losing altitude, is still average. The analysis is subject to change, of course, and so the week ahead may be decisive for adjusting our outlook.
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US retail sales are expected to rise 0.4% in tomorrow’s March report vs. the previous month, according to The Capital Spectator’s median econometric forecast. The prediction represents a slightly faster rate of growth over the previously reported 0.3% gain for February. Meanwhile, the Capital Spectator’s median projection for March is well below three consensus estimates based on recent surveys of economists.
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● The Divide: American Injustice in the Age of the Wealth Gap
By Matt Taibbi
Review via The LA Times
Matt Taibbi begins his sixth book, “The Divide: American Injustice in the Age of the Wealth Gap,” with a simple formulation: “Poverty goes up; Crime goes down; Prison population doubles.” It’s a snapshot, a way to represent what Taibbi sees as the through-the-looking-glass reality of contemporary America, where rule of law has been subverted by, on the one hand, corporate greed and, on the other, a kind of institutionalized abuse of the poor.
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Momentum is a powerful risk factor in the short term (up to around one year), as many studies show. But it can be confusing when it comes to identifying useful signals for portfolio management on a day-to-day basis. A key challenge is defining momentum. There are a number of possibilities. Returns are one choice. Another is comparing the current price of a security or index to its moving average. In that case, should we use, say, 20-, 50-, or 200-day moving averages? Or maybe a combination of moving averages? In a bid to bring some order to a black hole of options, I prefer to analyze momentum signals for the major asset classes with a pair of objective (in my view) definitions of short- and long-term periods for prices relative to a set of exponential moving averages (EMAs).
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There’s a mildly improving case for thinking that the recent slowdown in economic growth really was a temporary affair due to a harsh winter rather than a deeper cyclical problem. Yes, that’s an assessment that’s still evolving and so it’s premature to say anything definitive at this point. The outlook, as always, is subject to change, depending on what we see in the incoming data. But the limited set of March numbers published to date look encouraging.
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The Economist reports that “money is leaving emerging markets for riskier bets at the investment frontier.” So-called frontier markets are the new new thing in the frantic search for hot asset classes. “The rising interest is in part because GDP growth in China, Brazil and India has diminished. The things that made emerging markets exciting in the 1990s are now found in frontier markets, says Charlie Robertson of Renaissance Capital, an investment bank.”
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The US economic trend has remained positive and relatively steady in recent weeks, based on a markets-based profile of macro conditions. The Macro-Markets Risk Index (MMRI) closed at 9.4% on Monday, April 7–a level that suggests that business cycle risk remains low. A decline in MMRI below 0% would indicate that recession risk is elevated. By comparison, readings above 0% imply that the economy will expand in the near-term future.
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After nearly three years of writing and researching, my new book is finally here — Nowcasting The Business Cycle: A Practical Guide For Spotting Business Cycle Peaks Ahead Of The Crowd. This short title (154 pages) can be thought of as a companion guide to the macro updates on The Capital Spectator (see here and here, for instance). The methodology outlined in the book is the econometric engine for the monthly releases of the US Economic Profile.
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