Retail sales increased less than expected in June, rising a sluggish 0.2% vs. the 0.6% advance that the market was looking for. But there are a couple of reasons for thinking that this is mostly short-term noise as opposed to a warning sign for the business cycle. First, the previous month’s increase was revised up to 0.5% from the initially reported 0.3%. More importantly, the year-over-year pace for retail spending is still climbing at a decent rate: 4.3% through June. That’s down from 4.6% in the previous month, but it’s par for the course lately in keeping with a moderately faster annual gain in recent months relative to the winter.
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Daily Archives: July 15, 2014
US Industrial Production: June 2014 Preview
US industrial production in June is projected to increase 0.3% vs. the previous month in tomorrow’s release from the Federal Reserve, according to The Capital Spectator’s median econometric forecast. The expected gain represents a deceleration in growth relative to May’s 0.6% advance.
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Asset Allocation & Rebalancing Review | 15 July 2014
Risk management doesn’t attract a crowd these days. Diversification and rebalancing? Meshach, Shadrach, and Abednego, say the bulls. It’s all about (positive) momentum. Discussions of tail risk and downside deviation are persona non grata at this party. So it goes when the winners keep on winning and risky assets (or at least some of them) dominate the horse race, week after week. It’s summertime and stocks are hot, along with a few other slices of the capital markets. Volatility is low, returns are high, and the fish are jumpin’. It’s the best of all worlds, and a growing portion of the crowd is slowly if inexorably seeing it (perhaps unconsciously) as the new normal.
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