The outlook for the global economy is suffering these days, but there’s still no clear sign that the deceleration in macro activity has infected the US. Based on the latest numbers for October, the broad trend for the US remains distinctly positive. A diversified mix of economic and financial indicators continues to reflect growth through last month. But there are clouds on the horizon. Stagnation in Europe, recession in Japan, and slowing growth in China collectively pose a threat to America’s positive momentum — a threat that may take a bite out of US activity at some point. But for the moment, the numbers for the US overall reflect a clear bias for expansion.
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● Flash Germany PMI: growth drops to 16-month low in Nov | Markit
● November flash PMI signals weakest eurozone growth for 16 months | Markit
● Flash China Manufacturing PMI Flat In Nov At 6-month low | Markit
● Japan Flash Manufacturing PMI shows moderate growth in November | Markit
● US Stocks Decline as Fed Minutes Show Concern on Deflation | Bloomberg
● Oil & gold price plunge doesn’t signal global recession, experts say | The Guardian

The pace of new residential housing construction slumped last month, dipping to 1.009 million units (annualized) in October — down nearly 3% from September’s total, the US Census Bureau reports. Newly issued building permits, on the other hand, perked up by nearly 5%, offering a brighter outlook for the near term. Yesterday’s encouraging update on the mood in the home building industry for November lends support for seeing today’s soft data on housing starts as a temporary affair. “Growing confidence among consumers is what’s fueling this optimism among builders,” said David Crowe, chief economist at the National Association of Home Builders (NAHB). Even so, the outlook for growth in housing generally remains modest at best, as implied by the ongoing deceleration in the year-over-year trends for both starts and permits.
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New York Fed President William Dudley is inclined to ignore the recent drop in inflation forecasts via the Treasury market. In a speech last week, he explained that “in assessing inflation expectations, I currently put more weight on survey-based measures of inflation expectations as opposed to market-based measures.” The distinction is more than academic. “Survey-based measures have been generally stable, consistent with inflation expectations remaining well-anchored,” he noted. Market-based estimates, however, tell a different story.
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● US Home builders grow more confident in November | LA Times
● Senate defeats Keystone oil pipeline | USA Today
● US producer inflation up, but underlying trend muted | Reuters
● Yellen Inherits Greenspan’s Conundrum as Long Rates Sink | Bloomberg
● Calling Early Elections in Japan, Abe Rolls Dice on Economy | NY Times
● OECD raises India growth outlook, urges reforms | Reuters

Housing starts are expected to increase to an annual pace of 1.022 million in tomorrow’s update for October, according to The Capital Spectator’s median point forecast for several econometric estimates. The projection represents a modest increase over September’s 1.017 million.
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The momentum factor in asset pricing is widely recognized and respected, but there’s nothing close to consensus on the best definitions for what is arguably the most durable “anomaly” in the markets. A quick review of the voluminous literature on the subject reveals a variety of methodologies—absolute vs. relative momentum or price-based vs. return-based strategies, for instance. But the common theme that unites all definitions and strategies in this space is a focus on trending behavior for short- to medium-term horizons. Although minds will differ on the ideal for measuring and exploiting this phenomenon, a reasonable way to begin is by comparing an asset’s latest closing price to a variety of simple moving averages.
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● German Economic Sentiment in Nov increased for the first time in 2014 | ZEW
● UK inflation rate rises to 1.3% | BBC
● Analysts: US Economy Strong Despite Drop In Oct Industrial Output | MNI
● Five more Ukrainian soldiers killed, German foreign minister visits Kiev | Reuters
● Israel: ‘We will respond with a heavy hand’ after synagogue attack kills 4 | CNN
● ECB’s Draghi: Government Bond Purchases Possible | ABC

Industrial activity dipped 0.1 percent last month, clawing back a portion of the 0.8 percent rise in the previous month, the Federal Reserve reports. The slump surprised analysts, who were expecting a 0.3% gain, according to Econoday.com’s consensus forecast. The manufacturing component, however, posted a modest 0.2% rise, which tells us that last month’s weakness wasn’t broadly based. Nonetheless, the soft numbers in October weighed on the year-over-year trend, leaving industrial production rising 4.0% — the slowest pace in six months.
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● Japan Prepares Stimulus After Unexpectedly Tumbling to Recession | Bloomberg
● Global economy to suffer as Putin quits G20 early | Telegraph
● Euro zone trade surplus jumps y/y in Sept on stronger exports | Reuters
● Australia, China seal free-trade agreement | Marketwatch
● Low Gas Prices to Support US Confidence, Sales Ahead | MNI
● House, Senate To Vote On Bill Approving Keystone XL Pipeline | RTT