The prospects for a rebound in US manufacturing in the second quarter took a hit today with the initial April estimate of Markit’s Purchasing Managers’ Index (PMI) for the sector. The sentiment benchmark eased to its lowest reading in more than six-and-a-half years. The data is still reflecting growth, but at a sluggish rate.
Continue reading →

The Market Portfolio is NOT Efficient: Evidences, Consequences and Easy to Avoid Errors
Pablo Fernandez (University of Navarra), et al.
March 16, 2016
The Market Portfolio is not an efficient portfolio. There are many evidences that tell us that: the equal weighted indexes have beaten their market-value weighted indexes for many years, many easy-to-build portfolios (some “smart-beta”, “multifactors”) have beaten market-value weighted indexes. We document evidences about seven Equal weighted indexes that have had higher returns than the corresponding market-value weighted index: S&P500, MSCI Emerging Markets, FTSE 100, MSCI World. MSCI, DAX 30 and IBEX 35. However, many finance and investment books still recommend to diversify in the same relative proportions as in a broad market index such as the Standard & Poor’s 500, many funds compare their performance with the return of market-value weighted indexes. Without homogeneous expectations, the market portfolio cannot be an efficient portfolio for all investors.
Continue reading →

● US Jobless claims fall to 42-year low | MarketWatch
● Chicago Fed National Activity Index Ticks Lower in Mar | 24/7 Wall St
● Philly Fed Index Unexpectedly Returns To Negative Territory In Apr | RTT
● US Leading Economic Index ticks up in March | Conference Board
● US Consumer Comfort Index fell last week | Bloomberg
● US House Price Index edges up in Feb | Builder Mag
● PMI: Eurozone stuck in slow growth rut at start of Q2 | Markit
● BOJ Officials Consider Negative Rate on Loans | Bloomberg