The ISM Manufacturing Index for the US is expected to tick up to 50.2 in tomorrow’s update for November vs. the previous month, based on The Capital Spectator’s average point forecast for several econometric estimates. The prediction is fractionally above the neutral 50.0 mark. The estimate still translates into a forecast for growth for this benchmark of economic activity in the US manufacturing sector, but just barely.
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Real estate investment trusts (REITs) in the US took the lead in last week’s shortened holiday trading week for the major asset classes via a set of proxy ETFs. Vanguard REIT (VNQ) climbed nearly 1.0%, a comfortable edge over last week’s number-two performer for the four trading days through Friday, Nov. 27: Vanguard Total Stock Market (VTI), which tracks US equities.
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● PMI: US service sector growth rebounds in November | Markit
● US GDPNow Q4 growth estimate slips to 1.8% | Atlanta Fed
● Eurozone eco sentiment stable as inflation expectations tick higher | Reuters
● German retail spending dips in October | RTE
● German consumer confidence slips again in Dec forecast | RTT
● Japan’s industrial output rises for 2nd month in Oct | MNI

The rumors are true–a long holiday weekend
has been declared at the world headquarters
of The Capital Spectator.

After several days of feast and fête, the standard fare resumes on Monday, Nov. 30.

Happy Thanksgiving!

Consumer spending in the US continued to rise at a snail’s pace, rising 0.1% in October, according to this morning’s release from the Bureau of Economic Analysis. That’s the second month in a row for 0.1% growth, marking the weakest two-month period for consumption in eight months.
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Momentum has received a lot of attention in the asset-pricing literature over the past several decades, and for good reason. Trending behavior is a staple in markets. In contrast with other pricing “anomalies”, short-term return persistence—positive and negative—is a robust factor across asset classes. The fact that momentum is deployed far and wide in the money management industry and hasn’t been arbitraged away suggests that the persistence factor is persistent. The question is whether momentum as traditionally defined can be enhanced? Yes, according to a small but growing corner of research that looks at price trends through an “acceleration” lens.
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● US Q3 GDP growth revised up to 2.1% | Reuters
● Consumer confidence falls to 14-mo low in Nov | MarketWatch
● Richmond Fed: “manufacturing activity slowed” in November | Richmond Fed
● US Q3 corporate profits fall at steepest rate since recession | WSJ
● US home prices rise 5.5% YoY in Sep | CNBC

Fed Chair Janet Yellen yesterday reaffirmed the case for keeping interest rates near zero percent and raising rates slowly in the future. But the Treasury market seemed to have a mixed reaction. The 2-year yield–widely followed as the most-sensitive spot on the curve for rate expectations—ticked higher, rising to a five-and-a-half-year high of 0.94% yesterday (Nov. 23), based on constant maturity data at Treasury.gov. The benchmark 10-year yield, by contrast, slipped to 2.25%–comfortably below the recent high of 2.50% from mid-June.
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● Chicago Fed: US growth rate ticks up in Oct | Chicago Fed
● PMI: US mfg growth slows to 2-year low in Nov | Markit
● Fed’s Yellen argues for cautious policy for rate hikes | Reuters
● US existing home sales fall in Oct after sharp Sep gain | HousingWire
● German business sentiment ticks higher in Nov | Ifo
● German Q3 GDP growth confirmed at 0.3% quarterly growth | Reuters