● US GDP growth in Q4:2015 revised up to 1.4% | BEA
● Consumer spending boosted 4Q growth | The Hill
● US corporate profits fall in 2015 for first time since 2008 | MarketWatch
● Q1:2016 GDP growth estimate stumbles to 1.4% via GDPNow Model | Atlanta Fed
● NABE survey: economists see slower US growth in 2016 | MNI
● Why hasn’t America’s economy recovered more robustly? | Time
● Global economy snapping back into gear? | FT (Gavyn Davies)
Monthly Archives: March 2016
Book Bits | 26 March 2016
● The Overtaxed Investor: Slash Your Tax Bill & Be A Tax Alpha Dog
By Philip DeMuth
Summary via Amazon
Being tax-smart is now more important than ever. In our low-return environment, high taxes on investments gnaw like rats on your profits. Taxes need to be the first thing an investor considers, not an afterthought. Today you have to start with taxes. Nationally recognized investment advisor Phil DeMuth decrypts the 73,954 pages of tax code to show you where the trip-wires lie. He offers simple rules of thumb to navigate the minefield, all in sparkling English. If you aren’t playing the long game with your taxes now, you are sending a valentine to the U.S. Treasury every April 15 with a needlessly fat check attached. DeMuth shows how to safely pare your investment tax bill down to the legal minimum requirement. It adds up to a small fortune that would be better spent on your life, your family, and your retirement.
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Research Review | 25 Mar 2016 | Bubble Analysis
Speculative Fever: Investor Contagion in the Housing Bubble
Patrick J. Bayer (Duke University), et al.
February 1, 2016
Historical anecdotes of new investors being drawn into a booming asset market, only to suffer when the market turns, abound. While the role of investor contagion in asset bubbles has been explored extensively in the theoretical literature, causal empirical evidence on the topic is virtually non-existent. This paper studies the recent boom and bust in the U.S. housing market, and establishes that many novice investors entered the market as a direct result of observing investing activity of multiple forms in their own neighborhoods, and that “infected” investors performed poorly relative to other investors along several dimensions.
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Initial Guidance | 25 March 2016
● US Durable Goods Orders Dropped 2.8% in Feb | AP
● US Weekly Jobless Claims remain low but inched higher last week | RTT
● PMI: mild growth returns for US services sector in Mar | Markit
● KC Fed region mfg activity remains weak in Mar | KC Star
● US Consumer Comfort Index falls, revisiting 2016 low | Bloomberg
● CNBC analysis: Don’t trust those GDP numbers | CNBC
The Dynamic Duo Of Risk Factors: Part I
The value and momentum factors have earned high praise in recent years as complementary sources of risk premia for designing and managing equity portfolios. AQR’s widely cited paper “Value and Momentum Everywhere” a few years back helped popularize the idea, pointing to applications in equities and beyond. There’s no shortage of support from the wider world of investment management. Earlier this week, for instance, Jack Vogel at Alpha Architect outlined “Why Investors Should Combine Value and Momentum.” Not surprisingly, there are several investment funds focused on the strategy, including the recently launched Cambria Value and Momentum ETF (VAMO).
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Initial Guidance | 24 March 2016
● US new home sales rise in Feb on strong gains in the West | Reuters
● US Mortgage Applications Decline Again on Refi Weakness | NMN
● Dollar rise hits commodities as Fed talks of tightening | Reuters
● Americans’ Outlook for Job Market Holding at Higher Levels | Gallup
● The Fed’s Misunderstood Dots | Bloomberg
● The challenge for monetary policy when the next recession hits | WaPo
Forecasters See Modestly Stronger Growth For US Q1 GDP
The US economy is widely expected to post modestly faster growth in this year’s first quarter vs. the weak 1.0% GDP rise in last year’s Q4 (based on seasonally adjusted annual rates). The projected improvement still looks unimpressive, but the good news is that analysts continue to forecast a slightly faster expansion for the “advance” Q1 GDP report that the Bureau of Economic Analysis will publish on Apr. 28.
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Initial Guidance | 23 March 2016
● Brussels: An Attack on All of Europe | New Yorker
● PMI: Subdued pace of US mfg growth persists in March | Markit
● Richmond Fed: regional mfg expands in Mar | Richmond Fed
● Redbook: US retail sales tick higher YoY in week through Mar 19 | TE
● FHFA US Home Price Index Rises 0.5% in Jan | 24/7 Wall St
● Philly Fed’s Harker: Should ‘Get On With’ More Rate Hikes | MNI
Is The US Stock Market At A Crossroads?
The S&P 500 has been rallying in recent weeks, recovering all of the ground it lost in January and February. The sharp rebound has been impressive, inspiring optimists to claim that the old bull market has been revived and upside momentum is once again in the driver’s seat. Perhaps, but the true test awaits. Hanging in the balance is the question of whether the latest pop is a dead-cat bounce in a bear market or a genuine revival that makes fools of tactical asset allocators who turned cautious in recent months.
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Initial Guidance | 22 March 2016
● US economy ran below trend in Feb, Chicago Fed says | MarketWatch
● US existing home sales tumble in warning sign for housing | Reuters
● Fed’s Lockhart: April Rate Hike On The Table | RTT
● PMI: Eurozone growth turns higher for first time in 3 mos | Markit
● PMI: Solid service sector growth for Germany vs. slower mfg | Markit
● Eurozone Consumer Confidence Down for 3rd Straight Month in Mar | WSJ
● Uncertainty Still Hangs Over the Global Economy | Dallas Fed