● Flash Boys: A Wall Street Revolt
By Michael Lewis
Review via The Guardian
The US stock market is rigged in favour of high-speed electronic trading firms, which use their advantages to extract billions from investors, according to the acclaimed author Michael Lewis.
In his new book Flash Boys: A Wall Street Revolt, Lewis says that firms are using their speed advantage to profit at the expense of other market participants to the tune of tens of billions of dollars.
“They are able to identify your desire to buy shares in Microsoft and buy them in front of you and sell them back to you at a higher price,” Lewis, whose book is available on Monday, said on the television program 60 Minutes on Sunday.
Continue reading →

As expected, private payrolls increased at a faster rate last month, rising 192,000 in March vs. February, according to today’s update from the US Bureau of Labor Statistics. That’s the best monthly gain since last November. But let’s not get too excited. Although it’s encouraging to see employment growth pick up, as it has in each of the past three months, the progress is modest and so the recent numbers are a return to trend as opposed to an upside surge that hints we’re on the cusp of a dramatic change for the better.
Continue reading →

The Economist recently asked: “Are financial markets useful indicators of how an economy is about to perform?” The answer, of course, is yes… sometimes, depending on the data sets and the econometric techniques. Generally speaking, however, real-time asset pricing provides a deep well of intelligence for estimating the state of the business cycle. But there are plenty of traps here. Separating the signal from the noise, as they say, requires some effort. There are no silver bullets, but one tool that deserves to be on everyone’s short list is a statistical measurement known as cross correlation (CC), which quantifies the relationship between two time series across a series of time lags.
Continue reading →

Private nonfarm payrolls in the US are projected to increase 187,000 (seasonally adjusted) in tomorrow’s March update from the Labor Department, according to The Capital Spectator’s median econometric point forecast. The expected rise is moderately above the previously reported increase of 162,000 for February. Meanwhile, The Capital Spectator’s median projection for March is below a pair of consensus forecasts, based on surveys of economists.
Continue reading →

The labor market is on the mend… again. Private-sector employment increased 191,000 in March, the best monthly comparison so far this year, according to the ADP Employment Report. That’s in line with the consensus forecast via economists, although the gain was sharply higher than The Capital Spectator’s median econometric prediction. There was also some good news in the revisions: February’s tepid 139,000 advance was revised up to a moderately better 178,000 in today’s ADP release. More importantly, the data continues to show that the year-over-year trend in private payrolls is advancing by nearly 2%. That’s an encouraging signal for thinking nothing much has changed for payrolls, namely, moderate growth prevails.
Continue reading →

Private nonfarm payrolls in the US are projected to increase 139,000 (seasonally adjusted) over the previous month in tomorrow’s March release of the ADP Employment Report, based on The Capital Spectator’s median econometric point forecast. The projection is substantially below a pair of consensus forecasts via surveys of economists.
Continue reading →

March brought another round of healing for assets in emerging markets. For the second month in a row, stocks and bonds in these nations posted handsome gains. Equities led the way in the first quarter’s closing stretch: the MSCI Emerging Markets Index advanced 3.1% last month, closely followed by government bonds in emerging nations, which added 2.8% (Citigroup ESBI). At the other end of the performance spectrum, stocks in developed markets led the red-ink parade by shedding 0.6% in March, based on the MSCI EAFE Index.
Continue reading →