● A Wealth of Common Sense: Why Simplicity Trumps Complexity in Any Investment Plan
By Ben Carlson
Summary via publisher (Bloomberg/Wiley)
A Wealth of Common Sense sheds a refreshing light on investing, and shows you how a simplicity-based framework can lead to better investment decisions. The financial market is a complex system, but that doesn’t mean it requires a complex strategy; in fact, this false premise is the driving force behind many investors’ market “mistakes.” Information is important, but understanding and perspective are the keys to better decision-making. This book describes the proper way to view the markets and your portfolio, and show you the simple strategies that make investing more profitable, less confusing, and less time-consuming.
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Today’s report on residential construction for June suggests that the housing market is bouncing back after a rough winter. Housing starts totaled 1.174 million units last month (seasonally adjusted annual rate)—close to a post-recession high. Meanwhile, newly issued building permits jumped to an eight-year high—a sign that construction activity will remain strong in the months ahead. Not surprisingly, home builders are upbeat these days. Industry sentiment in July rose to just shy of a ten-year high, according to yesterday’s update from the National Association of Home Builders (NAHB). In short, the housing sector is on track to provide additional support to the economy for the foreseeable future.
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● US jobless claims fall for first time in a month…
● As Philly Fed index in July reflects slower growth in manufacturing…
● While US home builder sentiment rises in July, close to 10-year high…
● Bloomberg’s consumer comfort benchmark was close to flat last week…
● Fed Chair Yellen says she prefers to raise rates “in a prudent and gradual manner.”

Housing starts are expected to total 1.078 million units (seasonally adjusted annual rate) in tomorrow’s update for June, according to The Capital Spectator’s average point forecast for several econometric estimates. The projection represents a moderate increase in residential construction activity vs. the previous month.
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In theory, small-cap and value stocks offer solid premiums over their large-cap and growth counterparts. In the short term, however, turning theory into real-world profits can get messy.
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● US industrial output rises in June but mfg. is unchanged…
● Fed Chair Yellen sees rate rise this year…
● NY Fed index shows modest pick-up in July manufacturing activity…
● Mortgage applications in US slide 1.9% for week through July 10…
● Greece reluctantly enacts austerity measures to receive bailout money.

US industrial output increased in June—the first monthly advance since March, according to this morning’s update from the Federal Reserve. Production rose 0.3% last month, the most since last November. Is this a sign that the industrial sector is stabilizing after months of decelerating growth? Maybe, although it’s hard to know based on a single monthly report. But let’s throw caution to the wind and say that the outlook for industrial activity looks a touch brighter in the wake of today’s numbers.
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How’s your globally diversified strategy faring these days? Having a tough time? You’re not alone–the headwinds are fierce. For the first time in recent memory, the overwhelming majority of the major asset classes are in the red on a trailing one-year basis. As a result, broadly defined asset allocation strategies are suffering, at least relative to the stellar numbers in recent years.
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● US retail sales surprise with 0.3% loss in June…
● US small business optimism suffers in June too…
● KC Fed President, a voting FOMC member, says “it’s time” to start raising rates…
● But a “growing body of evidence” suggests that US economy is slowing again, Markit economist writes…
● Meanwhile, China’s economic growth tops forecast with 7% gain in Q2.

US industrial production is expected to increase 0.1% in tomorrow’s June report vs. the previous month, according to The Capital Spectator’s average point forecast for several econometric estimates. The average prediction represents a mild rebound after May’s 0.2% decline.
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