The US economy in July expanded at a rate that’s fractionally below the historical trend, according to this morning’s update of the Chicago Fed National Activity Index (CFNAI). The monthly measure of the benchmark dipped from +0.16 in June to -0.01, or just below the zero mark that signals economic activity that matches the historical trend.
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Equities and fixed-income securities in emerging markets took the lead last week, posting the biggest gains among the major asset classes, based on a set of exchange-traded products. Meanwhile, US stocks fell for a second week, the first back-to-back weekly losses in three months, based on Vanguard Total Stock Market (VTI).
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● Big Money Thinks Small: Biases, Blind Spots, and Smarter Investing
By Joel Tillinghast
Summary via publisher (Columbia University Press)
Investors are tempted daily by misleading or incomplete information. They may make a lucky bet, realize a sizable profit, and find themselves full of confidence. Their next high-stakes gamble might backfire, not only hitting them in the balance sheet but also taking a mental and emotional toll. Even veteran investors can be caught off guard: a news item may suddenly cause havoc for an industry they’ve invested in; crowd mentality among fellow investors may skew the market; a CEO may turn out to be unprepared to effectively guide a company. How can one stay focused in such a volatile profession? If you can’t trust your past successes to plan and predict, how can you avoid risky situations in the future?
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The world headquarters of The Capital Spectator will be closing for a long weekend, starting… now. Our regularly scheduled programming will return shortly — on Monday, Aug. 21, to be precise. Cheers!

The US economy continued to exhibit a moderate growth bias through July. Although the monetary backdrop still presents a mild headwind, the majority of key indicators published to date suggest that recession risk remains low.
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The US dollar has had a rough ride so far in 2017. The Federal Reserve’s Trade Weighted US Dollar Index that tracks the major currencies has tumbled roughly 8% year to date through last week’s close. The greenback’s slide, however, has delivered a substantial return premium for US investors who own foreign assets in funds sans currency hedging.
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Stocks, real estate securities, and high-yield bonds took a hit last week as saber-rattling between the US and North Korea triggered a moderate round of de-risking. The leading beneficiary from last week’s push into safe havens: foreign government bonds in developed markets ex-US. This slice of fixed income posted the biggest gain among the major asset classes for the five trading days through Aug. 14, based on a set of exchange-traded products. The biggest loser: US real estate investment trusts (REITs).
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● Will China’s Economy Collapse?
By Ann Lee
Summary via publisher (Polity Books)
The recent downturn in the Chinese economy has become a focal point of global attention, with some analysts warning that China is edging dangerously close to economic meltdown. Is it possible that the second largest economy in the world could collapse and drag the rest of the world with it? Or will China simply implode under the strain of its many problems and recede from the world stage like Japan? Does it have the resilience and preparedness to tackle the multiplicity of economic challenges it faces? In this penetrating essay, leading expert on China’s economic relations Ann Lee explains why China’s economy will not sink us all and what policy options it is drawing on to mitigate against such a catastrophic scenario. Dissecting China’s economic challenges with realistic clarity, she makes a compelling case for China’s continued economic robustness in multiple sectors in the years ahead.
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The escalating threats of military action between President Trump and North Korea have put the world on edge, but a new survey of economists projects steady GDP growth for the third quarter. The initial Q3 report is more than two months away and so any estimates at this point are little more than guesses – all the more so in the wake of rising geopolitical risk. For the moment, however, the preliminary projections for economic activity assume that the pickup in growth in Q2 will hold steady if not improve in Q3.
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Economic news for the US has been encouraging in recent days, but rising tensions between the United States and North Korea have refocused the crowd’s attention on the potential for war. Predictably, President Trump’s blunt warning on Tuesday that North Korea faced “fire and fury” if it continued to threaten the US revived the appetite for safe havens, including Treasuries.
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