Most risk assets bounced in the trading week through Friday’s close (Sep. 9), based on a set of proxy ETFs that collectively represent the primary asset classes. Confidence that the bounce has legs is another matter.
Monthly Archives: September 2022
Macro Briefing: 12 September 2022
* Ukraine’s counteroffensive recaptures large swaths of territory from Russia
* Possible railway and port strikes could re-snarl supply chains
* Fed’s Waller supports another ‘significant increase in the policy rate’
* Will the reversal of Fed support shock the US Treasury market?
* Treasury Sec. Yellen says oil prices could spike this winter
* Hints from several industries point to easing US inflation in August
* UK economy grew less than expected in July
* Queen’s death may inspire new self-rule campaigns in former British colonies
* US 10-year yield approaches June high:
Book Bits: 10 September 2022
J. Bradford DeLong
Q&A with author via Vox
Q: You argue that 1870 through 2010 were “the most consequential years of all humanity’s centuries.” What’s your case?
A: It really looks that we had as much technological change and progress between 1870 and today as we had between 6000 BC and 1870 AD. We packed what had previously been nearly eight millennia of changes in the underlying technological hardware of society, which required changes in the running sociological code on top of that hardware. To try to pack what had been eight millennia worth of changes before in 150 years is going to produce an awful lot of history. Before 1870, most of history is how elites run their force-and-fraud, domination-and-extraction mechanism against a poor peasantry so that they, at least, can have enough, and so that their children are only two inches shorter than we are, rather than five or six as the peasants are. It’s about how the elites elbow each other out of the way as they eat from the trough. And it’s about the use they make of their wealth for purposes good and ill, of civilization and destruction.
Warily Projecting Near-Term US Stock Market Returns, Part II
In a recent post I explored a methodology to guesstimate the S&P 500’s 2-year annualized return 12 months into the future. A silver bullet? Hardly, but as short-term forecasting models go you could do worse. But your editor gets poor marks for explaining the details. Several readers reached out and asked for clarification. Allow me to make amends.
Macro Briefing: 9 September 2022
* Queen’s death comes at a point of high uncertainty for Britain
* Powell says Fed will raise rates to tame inflation ‘until the job is done’
* European Central Bank announces record rate hike to fight inflation
* European energy ministers debating plans for intervening in energy markets
* China’s inflation slowed more than expected in August amid Covid lockdowns
* Deadline approaches for US rail strike that could cost economy $2 billion per day
* US jobless claims drop to lowest since May
* US stocks look set for first weekly rise in a month:
US Equity Risk Factors Struggle To Offset Broad Market’s Slide
Escaping the pull of market beta is always tough for equities, especially in a year of sharp losses for the broad market. Although some slices of risk factors are doing better than others, financial gravity continues to dominate in 2022, based on a set of proxy ETFs.
Macro Briefing: 8 September 2022
* US approves $2.7 billion in new aid for Ukraine
* Fed Vice Chair Brainard says central bank is committed to taming inflation
* Fed’s Beige Book: US economy’s recent activity mostly unchanged since early July
* China extends covid-19 lockdowns in megacity Chengdu
* Climate change is expected to exacerbate disruptions for global supply chains
* Japan’s economy expanded more than initially estimated in Q2
* So-called quiet quitters reportedly make up half of US workforce
* Bond market decline weighs on Treasuries and corporates
* Considering the case for a ‘soft landing’ for the US economy
* Crude oil (US benchmark price) falls to seven-month low on Wednesday:
US Economy Still Set For Q3 Rebound, Based On Median Outlook
Revised numbers for US economic activity in the third quarter point to a slightly stronger recovery vs. the previous update, based on the median estimate for a set of nowcasts compiled by CapitalSpectator.com. The upbeat profile still deserves to be viewed cautiously, in part because of a hefty negative outlier in the nowcasts. But for now, the overall profile suggests that the economy may be set to rebound in next month’s release of Q3 GDP data from the Bureau of Economic Analysis.
Macro Briefing: 7 September 2022
* Antarctica’s melting ‘Doomsday glacier’ could raise sea levels several feet
* US tech firms receiving gov’t funds barred from building tech factories in China
* Global manufacturing activity contracts in Aug–first decline since June 2020
* China’s exports growth eased in August
* Putin calls for review of UN-brokered grain deal
* German industrial output continued falling in July
* US Services PMI shows sector contraction deepened in Aug, but…
* ISM Services Index paints a much brighter picture: moderate, steady growth:
Total Return Forecasts: Major Asset Classes | 6 September 2022
As financial markets sink, the relative allure of expected returns rises. Deciding how soon, if ever, investors can capture these forecasts in the real world is open for debate, but the winds appear to be supportive for earning relatively higher returns in the long run.