The Capital Spectator is signing off for the rest of the year and trading in the usual routine for a week in Italy. After a year-end diversion of walking amid the grandeur that was ancient Rome, indulging in gastronomy, and otherwise soaking in the local environs in one of the world’s great cities, The Capital Spectator will return on Monday, January 5, 2015. Ciao. All the best for year ahead… Happy New Year!

● Former Fed Governor Kohn: US Economy Looks Good for 2015, But… | Newsmax
● Japan 10-Year JGB Yield Hits Fresh Record Low of 0.300% | MNI
● Japan Inflation Slows More Than Expected; Ind. Output Falls Unexpectedly | RTT
● Japan Nov Retail Sales Up for 5th Month But Slower on Weather | MNI
● Oil Rises as Fighting Intensifies Around Libya’s Biggest Port | Bloomberg
● Ruble rebounds sharply from lows as exporters sell dollars | Reuters
● Oil contracts suggest traders expect higher prices | Houston Chronicle

Joyeux Noel
 Zalig Kerstfeast 
   Frohe Weihnachten
      Feliz Navidad
       Kala Christouyenna
          Buone Feste Natalizie

As the year approaches its finale, money managers are celebrating their triumphs (and minimizing any failures). The good news is that there’s ample opportunity for emphasizing the former. Barring a year-end surprise, US stocks and bonds in particular are on track to end 2014 with solid gains. Wall Street won’t be shy in taking most if not all of the credit for juicing the value of client portfolios. But let’s take a minute and recognize the primary source for the gains over the past year: economic growth

Continue reading →

● U.S. 3Q GDP Revised Up to 5% | Fox
● U.S. Personal Spending Rises Slightly More Than Expected In November | RTT
● U.S. Personal Income Rises Less Than Expected In November | RTT
● Durable Goods Orders in U.S. Unexpectedly Fell 0.7% in November | Bloomberg
● New-Home Sales in U.S. Unexpectedly Fall to 4-Month Low In Nov | Bloomberg
● U.S. consumer sentiment rises to highest level since 2007 | Reuters

US economic growth accelerated last month, according to the November update of the Chicago Fed National Activity Index. But while the broad trend is looking stronger these days, housing remains wobbly. Existing home sales fell a hefty 6.1% in November – the biggest monthly decline in over four years. The slide follows last week’s news of November’s sluggish growth in housing starts and a decline in newly issue building permits – a sign that housing construction may be headed lower in the months ahead. Considering the residential real estate’s influence in macro matters, it’s reasonable to wonder if the soft data of late pose a threat for an economy that’s otherwise expanding at a faster pace.
Continue reading →

● US sales of existing homes hit 6-month low, puzzling analysts | WaPo
● Eurozone consumer confidence rises in December | Reuters
● French consumer spending rises less than expected in Nov | MarketWatch
● Opec oil output will not be cut even if price hits $20 | BBC
● Italy Oct Retail Sales Decline At Faster Pace | RTT
● UK Q3 GDP Revised Lower On Year | MNI
● France GDP Expanded by Unrevised 0.3% in Q3 | MNI

US economic growth is still expected to decelerate in this year’s fourth quarter relative to Q3, although today’s revised nowcast reflects a stronger outlook for GDP in the final three months of 2014 vs. last month’s projection.  Q4’s advance is now on track for a 3.0% advance (real seasonally adjusted rate), based on The Capital Spectator’s current median point forecast for several econometric estimates. The latest outlook represents a solid improvement over the 2.1% rise in the initial nowcast for Q4.
Continue reading →

● Chinese central bank survey: More bankers think economy cooled in Q4: | Reuters
● BoJ: Japan’s Economy Continues To Recover Moderately | RTT
● Oil Rises for Second Day on Saudi Confidence in Demand | Bloomberg
● US gas prices fall to lowest since May 2009: Lundberg survey | Reuters
● UK inflation will likely to fall below 1%, central banker says | MNI
● Do falling oil prices raise the threat of deflation? | Econobrowser

Existing home sales in the US are expected to decline slightly to an annual pace of 5.25 million units in tomorrow’s update for November, according to The Capital Spectator’s median point forecast for several econometric estimates. The projection represents a marginal decrease from October’s 5.26 million units (seasonally adjusted annual rate).
Continue reading →