The three-month average of the Chicago Fed National Activity Index (CFNAI) is expected to decelerate to a +0.11 reading in the October update that’s scheduled for release on Monday (Nov. 24), based on The Capital Spectator’s median econometric point forecast for several econometric estimates. The projection is moderately below the +0.25 value for September, which reflected above-average economic growth for the US relative to the historical trend. Only values below -0.70 indicate an “increasing likelihood” that a recession has started, according to guidelines from the Chicago Fed. Using today’s estimate for October as a guide, CFNAI’s three-month average is expected to remain at a level that’s historically associated with growth at an above-trend pace.
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In the horse race among the major asset classes, there’s not much competition for first place at the moment. US REITs remain in the lead for the trailing one-year period (250 trading days), and by a wide margin, based on our standard list of ETF proxies for the key slices of global markets. In other words, US stocks have been demoted recently to second place,  and by more than a trivial degree. Vanguard Total Stock Market ETF (VTI), which tracks a broad measure of US equities, is still sitting on a handsome gain for the past year (+15.0%), but it’s well below the 24% surge for Vanguard REIT ETF (VNQ).
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Paul Krugman seems to be having a supply-side-economics moment… sort of. Raising taxes, the NY Times columnist and Nobel laureate has been arguing lately, threatens Japan’s fragile economic recovery. “Shinzo Abe is doing the right thing, seeking to delay the next rise in consumption taxes,” Krugman wrote on his blog yesterday. “This is good economic policy….”
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● US Leading Economic Index Increased Again In October | Conference Board
● US October consumer prices flat; core CPI up 0.2% | USA Today
● Eurozone Nov Flash Consumer Confidence Falls Unexpectedly | RTT
● UKIP, Populist Anti-E.U. Party, Wins 2nd Seat in Britain’s Parliament | NY Times
● Obama declares ‘lawful action’ to protect 5M immigrants | USA Today
● Japan PM seeks referendum on ‘Abenomics’ in snap election | Reuters