● Dallas Fed mfg survey slides to recession-era levels | MarketWatch
● Americans Still Generally Upbeat About Personal Finances | Gallup
● US East Coast blizzard’s will cost up to $3 billion | CNNMoney
● Global stocks, dollar fall as oil sell-off resumes | Reuters
● Cheap prices fail to kill boom in US oil production | CNNMoney
● 6 key factors that will drive oil prices in 2016 | OilPrice.com

Several pieces of the major asset classes rebounded sharply last week, based on a set of representative ETFs. But the revival wasn’t strong enough to wipe away the red ink for the trailing one-year period. For the second week in a row all the major asset classes are posting varying degrees of loss over the last 12 months when measured in total returns through Jan 22.
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● Chicago Fed Nat’l Activity Index Confirms Below-Avg US Growth | 24/7 Wall St
● US Mfg PMI rebounds in Jan, led by rise in new orders | Markit
● US home resales rebounded strongly in Dec from 19mo low | Reuters
● US Leading Index slips in Dec but still signals moderate growth | Bloomberg
● German Ifo: Business sentiment at nearly year low in Jan | MarketWatch
● Oil falls 3% on Mon on swelling oversupply | Reuters

● The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse
By Mohamed El-Erian
Review via The Economist
Mohamed El-Erian, a former IMF economist and executive at the Pimco fund management group, is the latest to sound the alarm. While central banks “averted tremendous human suffering”, he argues that they have failed to generate what the Western world really needs—“the combination of high, durable and inclusive growth together with genuine financial stability”.
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US economic growth continued to decelerate in December, according to this morning’s update of the Chicago Fed National Activity Index. The benchmark’s three-month average (CFNAI-MA3) ticked down to -0.24—the third consecutive month of negative (below-trend) growth and the lowest reading since last March.
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A Fed rate hike at a time when economic worries are on the rise?  Fugetaboutit! In fact, some analysts are talking up the possibility that the central bank may be forced to back-track and reverse last month’s subtle but symbolically important 25-basis-point rate hike—the first since 2006. Perhaps, but there’s no sign of an imminent retreat in the effective Fed funds rate (EFF), which ticked up to 0.37% on Wednesday (Jan. 20)–the highest in a month. That’s an interesting talking point with next week’s Fed meeting on the radar.
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● US jobless claims rise from historic low, reach 7-mo high | MarketWatch
● Americans’ Economic Expectations Brightened in Jan | Bloomberg
● Philly Fed mfg index slightly ahead of estimates but still negative | Sharecast
● Markit Flash Eurozone PMI: growth cools at start of 2016 | Markit
● ECB’s Draghi calms markets with hint of more stimulus | CNN
● Stocks, oil soar on Fri as Draghi the dove tames global bears | Reuters
● This Time, Cheaper Oil Does Little for the U.S. Economy | NY Times
● Talk of a downturn is in the air, and the numbers are squiggly | Bloomberg

The three-month average of the Chicago Fed National Activity Index (CFNAI) is expected to post a slight improvement in the December update that’s scheduled for tomorrow (Jan. 22), based on The Capital Spectator’s average point forecast for several econometric estimates. The projection for -0.13 reflects a modest improvement over the previous month, which indicated US economic activity that’s moderately below the historical trend rate of growth. Only negative values below -0.70 signal an “increasing likelihood” that a recession has started, according to guidelines from the Chicago Fed. Using today’s average estimate for December as a guide, CFNAI’s three-month average is expected to reflect an expansion that’s moderately below the historical trend but still above the tipping point that marks the start of a new US recession.
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Another day, another (modestly) disappointing economic report. This time it’s the labor market. Initial jobless claims unexpectedly increased 10,000 last week to a seasonally adjusted 293,000, the Labor Department reports. That’s still low by historical standards, but economists were looking for a modest decline. Instead, new filings for unemployment benefits rose for the week through Jan. 16 to the highest level since last July. The good news: claims are still falling on a year-over-year basis. Unfortunately, the annual decline continues to wither; the latest decrease–down 2.7% vs. the year-ago figure–is the smallest since early December.
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Mr. Market’s outlook has turned darker lately. The ongoing slide in stocks and oil, combined with an increase in the spread in junk yields over Treasuries, is creating deeper doubts about the strength of the US economy. The Treasury yield curve is still positively sloped, which implies that growth will survive. But some analysts say that this historically valuable indicator is less reliable these days because of extreme measures with monetary policy in recent years.
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