The US stock market has stabilized recently and trades moderately above its recent low. The recovery inspires hope that the worst is over. Maybe, but a review of various metrics suggest that there’s a good case for staying defensive until stronger evidence emerges the latest bounce is the start of an extended rebound.
Monthly Archives: January 2023
Macro Briefing: 18 January 2023
* Americans have reduced spending in recent months: NY Fed survey
* US-China officials discuss economic relations
* China says it’s open for business after its Covid lockdown
* China’s economy looks poised for a rebound, predicts fund manager
* Record oil demand expected this year as China reopens, predicts IEA
* Fed asks big banks how they’re preparing for climate change
* Former economic adviser to Trump says US has ‘weathered’ economic storm
* UK inflation slips for second month but remains high at +10.5% in December
* Fund managers’ allocation to US equities falls sharply in January: BofA survey
* NY Fed Manufacturing Index falls deeper into the red in January:
High Beta, Small Cap Value Top US Factor Returns In 2023’s Start
It’s too early in the new year to draw hard conclusions, but the initial results for 2023 through the first half of January show a broad-based rally in most equity factors led by so-called high beta shares, based on a set of ETF proxies.
Macro Briefing: 17 January 2023
* China’s economic growth slows to 3.0% in 2022, near historic lows
* China reports smaller population, first decline in decades
* Will China’s reopening trigger a sharp rise in oil price? Maybe not
* Putin is “weaponizing food”, has global implications, warns head of fertilizer firm
* Japan rearming again to counter China’s ambitions to control Asian-Pacific region
* Corporate executives, economists at Davos meeting expect global recession
* More central-bank digital currencies are being tested
* Microsoft plans to add artificial-intelligent tools to all its products
* Bitcoin rallies sharply year to date after rough 2022
* Some analysts predict gold will rise to near record high this year:
Global Markets Extend 2023 Rally For Second Week
All the major asset classes scored gains last week, delivering more relief from widespread losses in 2022, based on a set of ETF proxies through Friday’s close (Jan. 13).
Macro Briefing: 16 January 2023
* Treasury Sec. Yellen says US will reach its debt limit within days
* China’s reopening could boost the world economy
* US Treasury Secretary Yellen will meet Chinese vice premier this week
* Economists still see elevated US recession risk via Wall Street Journal survey
* Earnings expected to take center stage for stock market in coming weeks
* Warm winter reduces bite of Russia’s energy war on Europe
* US Treasury market yields fall so far in 2023, in contrast to last year’s start
* India’s head of central bank asks for ban of crypto
* Richest 1% accumulate nearly two-thirds of new wealth created in last 2 years
* US Consumer Sentiment Index rebounds in January to 9-month high:
Book Bits: 14 January 2023
Nathan Vardi
Review via Scientific American
“Finding new therapies that target only cancer cells and did not kill healthy cells had become the holy grail of cancer drug development,” writes Nathan Vardi, a managing editor at MarketWatch and former editor at Forbes. For Blood and Money follows the path of one class of such products (“targeted small-molecule drugs” designed to fight blood cancers) that ultimately pits two biotech companies against each other in a race to market—and to an unimaginable payday. Readers are introduced to scientologists, restless entrepreneurs, clinical experts and the machinations of magnate financiers searching for the next billion-dollar blockbuster. In the middle of that friction of ambition and greed are the patients, desperate for cures and more time.
10-Year Treasury Yield ‘Fair Value’ Estimate: 13 January 2023
The Federal Reserve is expected to lift interest rates again at the next FOMC meeting on Feb. 1, but the futures market is pricing in high odds that the increase will be trimmed to a relatively mild 25 basis points. Animating the softer outlook for monetary policy changes is yesterday’s encouraging news on inflation.
Macro Briefing: 13 January 2023
* IMF expects world economy will start to rebound later this year
* Fed officials signal softer rate hike ahead but no cut
* Attorney general appoints special prosecutor to investigate Biden documents
* Europe’s mild winter softens economic blowback from Ukraine war
* China exports fall less than expected in December
* Germany’s economy slowed less than expected in 2022
* UK economy unexpectedly grew in November
* Many of the largest stock and bond index funds have underperformed recently
* US jobless claims edge lower in kick-off week to new year
* US consumer inflation continues to cool in December:
Is The Labor Market’s Resilience Poised To Fade?
Recession forecasts are flying left and right lately, but the main pushback is the labor market. The growth rate for nonfarm payrolls is slowing, but gradually and the latest numbers for December continue to show a solid gain. Yet recession fears persist, thanks to warnings from other economic and financial indicators. Will the labor market soon give way and confirm the dark forecasts? Yes, or so it appears via the slide in temporary workers – considered a leading indicator for payrolls generally.