The expected risk premium for the Global Market Index (GMI) continued to fall in November. GMI, an unmanaged, market-value weighted mix of the major asset classes, is currently expected to earn an annualized 3.9% over the “risk-free” rate for the long term (for details on the methodology, see summary below). Today’s forecast is slightly below last month’s 4.0% estimate and moderately under the recent peak of 4.7% in August
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● Factories Humming in U.S. Even Amid Global Slowing | Bloomberg
● Euro zone producer prices fall at sharpest rate in a year | Reuters
● UK construction PMI falls to 13-month low in November | Investing.com
● Spain Jobless Claims Log Biggest Decline For November | RTT
● RBI leaves rates on hold, says could ease early 2015 | Reuters
● Australia holds rates as speculation mounts for cuts | CNBC
● MNI Japan Survey: Q3 Revised GDP -0.5% Annual Vs -1.6% | MNI

The Federal Reserve is reportedly on track to start raising interest rates next year, but the tightening is already underway if only in relative terms. Indeed, there’s a conspicuous directional change in the year-over-year comparison in the real (inflation-adjusted) monetary base. The substantial deceleration of the growth rate that’s been unfolding this year isn’t surprising at this point, but it serves as a reminder that the central bank’s plan to normalize policy is a process rather than a single date in the future when the Fed funds rate increases.
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US equities (Russell 3000) took the lead with performance among the major asset classes in November, posting a solid 2.4% total return. US real estate investment trusts (REITs) were in close pursuit with a 2.0% advance, which builds on October’s spectacular 10.0% surge, based on the MSCI REIT Index. In third place: foreign stock markets in the developed world (MSCI EAFE), which dispensed a respectable 1.4% total return. Whatever macro troubles weigh on Europe and Japan (and there are many), the burden appeared to be in remission in November in terms of equity performance overall.
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● German manufacturing PMI revised down to 49.5 in November | Investing.com
● Eurozone manufacturing hits near-stagnation as Big 3 nations contract | Guardian
● Italy Manufacturing Contracts Again | RTT
● Fed rattled by elusive inflation, but loath to sound alarm yet | Reuters
● Black Friday Spending Drops 11% | Time
● Oil suffers fresh heavy losses, with outlook unclear | Marketwatch