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