North Korea and South Korea hold first meeting in two years: CNN
A US government shutdown is a rising risk: Fiscal Times
Trump administration orders nearly 200,000 Salvadorans to leave US: Fox
Special counsel Mueller expected to request interview with Trump: CNN
Regulators nix Energy Secretary’s plan to prop up coal and nuclear plants: The Hill
Outstanding credit card debt in US reached a record in Nov: USA Today
Is Wall Street’s euphoria a contrarian indicator? Bloomberg
China reportedly orders reduction of cryptocurrency mining: TechCrunch
Annual growth for US commercial & industrial lending ticks below 1%: St Louis Fed

Equities in emerging markets posted the strongest return for the major asset classes in 2018’s first week of trading, based on a set of exchange-traded products. The losers for the year-to-date performance so far are limited to US bonds and US real estate investment trusts (REITs).
Continue reading →

Trump administration set to roll out aggressive trade crackdown: Politco
French president calls for EU-China partnership on trade, climate: WaPo
Cleveland Fed president: rate hikes are last resort for financial risks: Reuters
US job growth was surprisingly slow in December: CNBC
Factory orders in US rose for fourth straight month in November: MarketWatch
ISM: US services sector growth slowed for second month in Dec: RTT
White House chief economist: no need for faster rate hikes: Bloomberg
US trade deficit widens to biggest gap in 6 years in November: RTT

● Market Timing with Moving Averages: The Anatomy and Performance of Trading Rules
By Valeriy Zakamulin
Review via Alpha Architect
There are many popular academics (Moskowitz, Ooi, and Pedersen) and bloggers (i.e., Gary Antonacci) with a solid grasp of trend-following rules. However, Valeriy is the expert’s expert when it comes to the details on trend-following rules. In fact, we were so impressed by the depth and scale of Valeriy’s knowledge on moving average rules, a few years ago, we labeled Valeriy the, “Moving Average Research King.” Valeriy’s new book only emphasizes that we were probably correct in our assessment.
Continue reading →

Corporate payrolls in the US increased by less than expected in December, rising 146,000 in 2017’s final month — well below November’s strong 239,000 rise, according to this morning’s monthly employment report from the Labor Department. Economists were looking for a stronger rise: 185,000 via Econoday.com’s consensus forecast. The softer gain kept the year-over-year trend unchanged at a modest pace, which suggests that the labor market in 2018 may face stronger headwinds than previously assumed.
Continue reading →

The Treasury market’s 10-year estimate of future inflation rose above the Federal Reserve’s 2% target this week – the first time that level has been breached for this maturity since last March, based on daily yield-spread data via Treasury.gov. Official inflation numbers, which are published with a lag, continue to reflect pricing pressure that’s modestly below the Fed’s target. The Treasury market, however, is betting that inflation will accelerate this year.
Continue reading →

N. Korea agrees to hold talks with S. Korea next week: Reuters
Global debt reached a record $233 trillion in 2017’s third quarter: Bloomberg
Winter storm battered the US Northeast on Thursday: Reuters
Trump planning to allow oil drilling in most of US coastal waters: NY Times
US private employment growth accelerated to 250k in Dec: ADP
US jobless claims rose last week but remain historically low: Dow Jones
Global economic output strengthened to 2-1/2 year high in Dec: IHS Markit
SEC to investors: You’re on your own with cryptocurrencies: The Hill
Job cuts at US companies fell in 2017 to lowest level since 1990: CG&C
2017 losses from natural disasters is a record $135 billion for insurers: Munich Re
The bull market is the second-longest on record–when will it end? NY Times
PMI: US services sector growth slowed to 7-month low in Dec: IHS Markit 

Technology shares continue to post the strongest trend performance for US equity sectors, based on a set of ETFs ranked by one-year return. Although most sectors are posting year-over-year gains, the annual pace for tech remains notable for its outsized advance vs. the rest of the field.
Continue reading →

Critical flaws in world’s computers raise new security risks: c|net
Severe winter storm strikes US East Coast: Fox
Oil prices rise to highest level since 2015: Reuters
Countries look to launch virtual currencies to avoid sanctions: NY Times
Fed minutes show continued support for gradual rate hikes: Bloomberg
ISM: US factory activity increased in Dec to 2nd highest level in 6 years: Reuters
PMI: China’s services sector growth at fastest pace in over 3 years: Reuters
US auto sales fell 2% in 2017–first annual drop since ’09, but pace still healthy: AP
Broad US stock indices rise to record territory: RTT
CBOE VIX Volatility Index drops again, close to record lows: TradingGods.net

Weighting stocks based on market capitalization has long been the design standard for most index funds, but a recently launched ETF turns the strategy on its head. The Reverse Cap Weighted US Large Cap ETF (RVRS) holds the familiar S&P 500 names but in weights that are inversely proportional to their market cap. For example, the largest stock has the smallest weight and the smallest has the biggest footprint. What’s the rationale behind the strategy? Isn’t this just another twist on tapping into the small-cap factor? The Capital Spectator recently asked Herb Blank, a senior consultant at Global Finesse, to explain the motivation behind the strategy. In a recent study (“The Case for Reverse-Cap-Weighted Indexing”), Blank and co-author Qiao Duan report that reverse weighting outperformed the conventional S&P 500 for the ten-year period through 2016. The results offer “an intriguing alternative weighting scheme with the potential to realize superior rates of return,” they write.
Continue reading →