The three-month average of the Chicago Fed National Activity Index (CFNAI) is expected to rise modestly in the August update that’s scheduled for tomorrow (Sep. 24), based on The Capital Spectator’s average point forecast for several econometric estimates. The projection for +0.08 is slightly above July’s zero reading, which reflects economic growth that matches the historical trend. Only negative 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 August as a guide, CFNAI’s three-month average is expected to reflect an expansion that’s slightly above the historical trend rate for growth and therefore well above the tipping point that marks the start of a new recession.
Continue reading →

US manufacturing activity is surprisingly firm in September, according to the initial estimate of Markit’s purchasing managers’ index (PMI) for this corner of the economy. I say “surprisingly firm” because three previously released regional indexes for manufacturing in September (via Fed banks) are unusually weak, as I discussed yesterday. But the national trend for manufacturing looks comparatively resilient. Growth is still moderate, bordering on sluggish for manufacturers. But if you’re looking for a dark signal for the US business cycle, today’s PMI update doesn’t offer much red meat.
Continue reading →

Earlier this year I reviewed ten asset allocation mutual funds with a range of strategic designs as an academic exercise for exploring how multi-asset strategies stack up in the real world. Not surprisingly, the results varied, albeit largely by dispensing a variety of gains as of late-February. But that was then. Thanks to the recent spike in market volatility (and the slide in prices), a hefty dose of red ink now weighs on these funds.
Continue reading →

● China Mfg PMI decline falls at slightly faster rate in Sep | Markit
● Eurozone Composite PMI growth ticks lower in Sep to 53.9 | Markit
● Germany Composite PMI growth slips to 54.3 in Sep | Markit
● Richmond Fed Factory Gauge Hits 32-Month Low | IBD
● Redbook: US retail sales slow in September | Dow Jones
● Euro zone consumer confidence eases to -7.1 in September | Reuters