Last week’s post on analyzing US equity value and momentum risk premia ended with a question: How much, if any, improvement should we expect by adding a dynamic system for managing exposure to these risk factors vs. a buy-and-hold strategy? What follows is a preliminary effort in searching for an answer. As a preview, the results are mixed, but this may be an artifact of a) focusing on value and momentum factors within the US equity space;  b) using a specific definition of value and momentum (via Professor Ken French’s data library), which merely scratches the surface for modeling possibilities; and c) applying a simple tactical model that may be responsive to parameter changes for enhancing results.
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● ADP reports 200,000 US private-sector jobs added in Mar | MarketWatch
● US mortgage apps fall 1%, dragged down by fewer refinances | CNBC
● US Hiring Remains Lively in March | MNI
● OECD Lowers Its Forecast for Global Growth This Year | NY Times
● The Stock Market Doesn’t Believe Janet Yellen | Fortune

US companies added 200,000 jobs last month (seasonally adjusted), according to this morning’s update of the ADP Employment Report. Although March’s gain was slightly below the previous month’s increase, today’s release suggests that the year-over-year trend for private-sector job creation is settling in to a low-2% trend–a pace that’s strong enough, if sustained, to keep the US recovery on track.
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Financial stress in the US economy has ticked lower in recent weeks after jumping to a four-year high in February. The Cleveland Fed’s multi-factor benchmark is still elevated by historical standards, but this daily measure of distress in the financial system has fallen moderately through most of this month to date. Risk levels have also pulled back in March via two other financial stress indexes published by regional Fed banks.
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● Consumer confidence rebounds in March | MarketWatch
● Janet Yellen: Fed Still Plans to Raise Rates but Carefully | NY Times
● Yellen comforts world stocks with cautious rate rise whispers | Reuters
● S&P/Case-Shiller: US home prices up 5.7% YoY in Mar | HousingWire
● US Redbook Sales at 11-week High | Economic Calendar
● US SS Investor Confidence Index ticks up to 6-mo high in Mar | State Street

Private nonfarm payrolls in the US are projected to increase by 178,000 (seasonally adjusted) in March over the previous month in tomorrow’s update of the ADP Employment Report, based on The Capital Spectator’s average point forecast for several econometric estimates. The average projection reflects a moderately lesser increase vs. February’s gain.
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If the bear-market label doesn’t apply to the US stock market, the evidence will be forthcoming in weeks ahead. But that’s a high bar at the moment. The rally in recent weeks has recovered most of the year-to-date losses, but a bigger test awaits: regaining the strategic momentum that’s been MIA since last summer. The odds for success don’t look encouraging, leaving tactically minded investors with a simple question: Do you feel lucky?
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● US Q1 GDP growth projection stumbles to anemic 0.6% | Atlanta Fed
● Feb US consumer spending rise slightly; income growth slows | LA Times
● US trade deficit rose again in Feb | MarketWatch
● US pending home sales in Feb hit highest point since July | CBS MW
● Dallas Fed factory index in Mar least negative since Nov | Reuters

US personal income and spending ticked higher in February, but the year-over-year growth trend slowed on both counts, the Bureau of Economic Analysis reports. There’s still a positive trend in the numbers—enough to keep the economy expanding for the near-term future, but today’s numbers leave little room for arguing that growth is set to accelerate after what’s shaping up as a sluggish first quarter.
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The five-week streak of higher prices hit a wall last week for the major asset classes via a set of proxy ETFs. For the first time in over a month, losses dominated the trading week just passed. The four-day stretch through Mar. 24 (the Good Friday holiday trimmed the usual schedule) dispensed losses across the board—the broadest setback since early February.
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