Recent economic updates reveal that US growth has slowed in the first quarter, but the deceleration wasn’t sharp enough to trigger a recession, based on a broad set of numbers published through March. Estimates for first-quarter GDP suggest otherwise, but the evidence is still weak for arguing that a new downturn started last month when reviewing the data across multiple indicators from a bottom-up perspective.
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There’s no chance that the Federal Reserve will announce a rate hike at its monetary meeting next week, according to the Fed funds futures market. The implied probability that the central bank will lift the current 0.25%-to-0.50% range at the Apr. 27 FOMC confab is effectively nil via CME data (as of Apr. 19). It’s another story, however, when we look at the year-over-year change in the real (inflation-adjusted) monetary base (M0). By this measure, the central bank’s shift to a policy tightening stance continued in March.
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● US housing data adds to signs of weak Q1 GDP growth | Reuters
● GDPnow estimate for US growth in Q1 unchanged at +0.3 | Atlanta Fed
● NY Fed nowcast of Q1 GDP growth for US: +0.8% | NY Fed
● Redbook: US retail sales +0.8% mtd vs. year-ago level | MNI
● US Economic Confidence Index Stable at -12 | Gallup
● Worldwide Oil Production Outages Bump Up Oil Prices | Oilprice.com

If the Federal Reserve needed another excuse to postpone a second interest-rate hike, today’s March report on residential housing construction fits the bill. Housing starts slumped last month, dealing a downside surprise to market expectations for a modest bump. The news follows last week’s disappointing data on retail spending and industrial activity at the end of the first quarter.
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Developing confidence about a portfolio strategy’s track record (or throwing it onto the garbage heap), whether it’s your own design or a third party’s model, is a tricky but essential chore. There’s no single solution, but a critical piece of the analysis for estimating return and risk, including the potential for drawdowns and fat tails, is generating synthetic performance histories with a process called bootstrapping. The idea is based on simulating returns by drawing on actual results to see thousands of alternative histories to consider how the future may unfold. The dirty little secret in this corner of Monte Carlo analysis is that there’s more than one way to execute bootstrapping tests. To cut to the chase, block bootstrapping is a superior methodology for asset pricing because it factors in the reality that marktet returns exhibit autocorrelation. The bias for momentum–positive and negative–in the short run, in other words, can’t be ignored, as it is in standard bootstrapping.
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● US homebuilder confidence holds steady in April | Bloomberg
● Dow above 18,000 for first time in 9 months | MarketWatch
● Boston Fed’s Rosengren: ‘Gradual’ rate increases ‘absolutely appropriate’ | MNI
● Americans Most Confident in Sanders, Kasich on Economy | Gallup
● Corporate defaults hit highest level since ’09 bust | USA Today
● Silver surges to 10-month high; lifts gold | Reuters

Housing starts are expected to total 1.160 million units (seasonally adjusted annual rate) in tomorrow’s March report, according to The Capital Spectator’s average point forecast of several econometric estimates. The projection represents a slight decline from the previous month’s level of residential construction activity.
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Foreign stocks posted strong gains last week (in unhedged US dollar terms), with emerging-market equities in the lead. In close pursuit:  stocks in developed markets ex-US. Meantime, bonds suffered over the five trading days through Apr. 15, with foreign corporates posting the biggest decline among the major asset classes, based on a set of proxy ETFs.
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● US industrial output falls in Mar, signals weak Q1 GDP growth | Reuters
● US consumer sentiment weakens in initial Apr reading | MarketWatch
● New York manufacturing expanded in April | AP
● China Says Q/Q Growth in First Quarter 1.1%, Lowest On Record | MNI
● Oil price dives after producers fail to agree output cap | BBC
● Brazil’s lower house votes for Rousseff’s impeachment | CNN
● Slower growth, higher leverage, and more tail risk for economies | Econobrowser

● A Violent World: Modern Threats to Economic Stability
By Jean-Hervé Lorenzi and Mickaël Berrebi
Summary via publisher (Palgrave Macmillan)
During the 1990s Francis Fukuyama announced the end of history. The 2000s showed how it is an illusion to imagine a peaceful world without conflict. In this book, the authors explore how six major constraints are set to fix the trajectory of the global economy. Three of them are new: the aging population, the failure of technical progress, and the scarcity of savings. The other three have been at work for some time: the explosion of inequality, the mass transfer of activities from one end of the world to the other, and the limitless financialization of the economy. They suggest that like seismic activity which depends on pressure between tectonic plates, political and social tensions will be exacerbated in the coming years by these major forces. They propose that authorities will be incapable of preventing neither the date nor the intensity of the coming earthquakes, and ask the question: Are we able to cope with these future shocks and the violence they are sure to cause?
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