The yield difference on the benchmark 10-year Treasury Note less the 3-month T-bill fell to 1.03 percentage points on Wednesday (Sep. 6), the lowest since Jan. 2008, according to daily data published by Treasury.gov. The latest dip pushed the spread below the previous post-recession low of 1.08 set in July.
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Hurricane Irma batters Caribbean on way to Florida: Bloomberg
Trump and Dems agree to temporarily delay gov’t-shutdown risk: Politico
China’s willing to impose more sanctions on North Korea: Reuters
Fed Vice Chair Stanley Fischer announces he’s leaving in October: Reuters
ISM Non-Mfg. Index rebounds in August after 11-month low: NY Times
US Services PMI rise to 21-month high for August: IHS Markit
Global economy grows at strongest pace in over 2 years: IHS Markit
Mfg orders slide in Germany for July, surprising analysts: MarketWatch
US mortgage refi applications jump to 11-week high: Reuters
GDPNow’s revised US Q3 GDP forecast at 2.9% vs. Q2’s 3.0%: Atlanta Fed

There are no silver bullets for profiling risk, but drawdown’s properties arguably give this metric a leg up over most of the competition. The combination of an intuitive framework, simplicity, and sharp focus on how markets actually behave is a tough act to beat.
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“Extremely dangerous” Hurricane Irma threatens Florida: WaPo
US factory orders disappoint in July but business spending perks up: Reuters
Fed’s Brainard: Low inflation may slow rate hikes: MarketWatch
Fed’s Kashkari says rate hikes doing “harm” to US economy: Bloomberg
Trump’s DACA immigration decision to bite US economy by $400 billion: CNBC
Wall St. Q3 GDP survey for Sep. 5 ticks down to +2.7%: CNBC
US credit downgrade by Moody’s looms if Treasury misses payments: The Hill
10yr Treasury yield falls below 2.10% to a 10-month low: MarketWatch
US stock market tumbles the most in nearly 3 weeks: NY Times

The expected risk premium for the Global Market Index (GMI) continued to rise in August. GMI, an unmanaged, market-value weighted portfolio of the major asset classes, is currently projected to earn an annualized 6.0% (over the “risk-free” rate) in the long run. The estimate is 20 basis points above last month’s forecast.
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A lot can happen over a weekend, including Sunday’s provocative nuclear test by North Korea. Reports that the country is now preparing to launch a new ballistic missile threaten to keep the world on edge this week and beyond.
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The Sep. 3 edition of The US Business Cycle Risk Report has been published and emailed to subscribers.

● Fifty Inventions That Shaped the Modern Economy
By Tim Harford
Q&A with author via Smithsonian.com
Q: So what made you decide to write a book looking at the modern economy through specific inventions?
A: I think it was a slight sense of frustration. I’m an economist, and economics often feels abstract and very impersonal, even though I don’t think it’s abstract or impersonal. As an economics writer, I’m also looking for a way to tell a good story and get some ideas across. I realized if I produced a kind of technological history with lots of ideas and examples I could teach some economics lessons through these very specific stories.
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Companies added 165,000 workers last month, the US Labor Department reports. The gain was modestly below Econoday.com’s consensus forecast. But the year-over-year trend held steady in August, suggesting that the two-year slowdown that began in the first half of 2015 may be stabilizing at a lesser-but-still-healthy growth rate.
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Another month, another bullish tailwind for most of the major asset classes. Nearly every corner of the global markets gained ground in August, led once again by stocks in emerging markets. The only losers last month: US junk bonds and real estate investment trusts (REITs), which posted fractional declines. Otherwise, performance was broadly positive.
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