Monthly Archives: April 2016

Initial Guidance | 6 April 2016

● US Hiring Reaches 9-Year High in Feb; Job Openings Slip | AP
● ISM US Non-Mfg Index Perks Up As Exports Jump | IBD
● PMI: US Services Index returns to expansion; new orders growth weak | Markit
● US Q1 GDP growth nowcast slips to tepid 0.4% | Atlanta Fed
● US trade data points to weak first-quarter growth | Reuters
● Global economic growth ticks higher in March | Markit
● 21 Countries Reduce Carbon Emissions While Growing GDP | WRI
● German Economy, Once Europe’s Leader, Now Looks Like Laggard | NY Times

Two US Labor Market Indexes Predict Slower Employment Growth

Job growth in March posted a solid gain, inspiring a new round of upbeat comments on the outlook for US payrolls and the economy generally. But newly minted numbers for two multi-factor measures of the labor market hint at a weakening trend. In contrast with the upbeat message in the latest data for payrolls, broadly defined benchmarks of the labor market published yesterday by the Federal Reserve and the Conference Board (CB) reveal a worrisome round of deceleration unfolding in the first quarter. The conflicting signals raise a question: Is the US labor market weaker than the nonfarm employment numbers imply?
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Initial Guidance | 5 April 2016

● US factory data signals further slowdown in economic growth | Reuters
● Fed’s US Labor Mkt Conditions Index shows weakness in Mar | Bloomberg
● Employment Trends Index falls in Mar, points to weaker job growth | CB
● US consumer spending survey data ticks higher in March | Gallup
● TD Ameritrade IMX investor sentiment index ticks lower in Mar | TD
● US Dollar slides to 17-mo low vs. yen as stocks, oil fall | Reuters
● India’s central bank cuts interest rates to 5yr low | Reuters
● IMF’s Lagarde: global recovery risks are increasing | Bloomberg

Risk Premia Forecasts: Major Asset Classes | 4 April 2016

The expected risk premium for the Global Market Index (GMI) ticked higher in March—the first increase in five months. GMI—an unmanaged market-value weighted mix of the major asset classes—is projected to earn an annualized 3.0% over the “risk free” rate in the long term. (For details on the equilibrium-based methodology that’s used to generate the forecasts each month, see the summary below.) Today’s revised estimate, which is based on data through March, is slightly above last month’s projection.
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Initial Guidance | 4 April 2016

● US payrolls rise 215,000 in March as wages pick up | Bloomberg
● US ISM mfg index in March points to first expansion in 6 months | MarketWatch
● US Consumer Sentiment Slips in March to 5-Month Low | AP
● PMI: Slow global mfg growth ticked up in March | Markit
● Trump’s prediction of ‘massive recession’ puzzles economists | Reuters
● What are the chances of a recession? Not what you’d think | Barry Ritholtz

Book Bits | 2 April 2016

● Fed Power: How Finance Wins
By Lawrence Jacobs and Desmond King
Summary via publisher (Oxford University Press)
The Federal Reserve is the most powerful central bank in the world. Without its central bank, America would be subject to devastating fluctuations in currency value and chronic economic instability. To stabilize the economy, the Fed adjusts interest rates and intervenes in the economy more directly when appropriate. According to most Fed observers, it as an impartial referee exercising its independence free from political interference in order to advance the best interests of America. Its actions during the Great Recession were heroic, saving the American and indeed the world economy from a far worse fate.
Wrong.
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Major Asset Classes | March 2016 | Performance Review

Global markets snapped back sharply in March, posting the first run of across-the-board monthly gains for the major asset classes in nearly two years.  Leading the markets higher: emerging market stocks (MSCI EM), which surged more than 13% last month—the biggest monthly advance in years for the index. Even the persistent bear market in broadly defined commodities had a reprieve in March—the Bloomberg Commodity Index gained nearly 4%.
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