It took longer than usual, but the priced-for-perfection bull run has taken a body blow in recent weeks. That’s good news for investors with relatively long time horizons since lower prices equate with higher expected returns. Meantime, with the benefit of hindsight, let’s consider how a pair of econometric tools have fared for monitoring bubble risk and bull/bear market regimes. The question before the house: Have these metrics provided any value for managing risk in an effort to cut through the noise and anticipate trouble based solely on the hard data? As a preview, I’ll argue “yes,” but with caveats.
Continue reading →

Tariffs announced by President Trump trigger widespread criticism: Politico
Trump’s tariffs are seriously flawed from an economic perspective: The Atlantic
Worries about a new trade war reverberate in Asia: Reuters
Russia’s Putin claims a new weapon that exploits US vulnerabilities: NY Times
US jobless claims fell last week to lowest level since 1969: MarketWatch
Consumer spending edged higher as personal income soared in Jan: AP
ISM Mfg Index rose in Feb, close to 14-year high: RTT
US Mfg PMI slipped in Feb, but still close to 3-year high: IHS Markit
Construction spending in US was flat in January: Fox
Most Americans (70%) have a positive view of foreign trade: Gallup