Will last week’s news of substantially stronger-than-expected growth for US economic output in 2023’s fourth quarter extend into this year’s Q1? It’s too soon to make high-confidence estimates, but CapitalSpectator.com’s initial median nowcast (based on several independent estimates) for this year’s first quarter suggests the expansion will continue to slow relative to the previous high point in last year’s red-hot Q3.
Monthly Archives: January 2024
Macro Briefing: 31 January 2024
* Federal Reserve expected to leave rates unchanged today
* IMF upgrades global economic outlook, citing US strength, China stimulus
* China’s factory activity contracts for fourth straight month in January
* China auto exports closing in on Japan, which is still leading car exporter
* Home prices in US reach new high in November
* US job openings unexpectedly increase in December
* US Consumer Confidence Index rises to two-year high in January:
Despite Geopolitical Threats, Markets Still Lean Into Risk-On
There’s no shortage of troubling developments around the world, but markets are still inclined to embrace a risk-on bias. There are exceptions, of course, but from several big-picture angles the trends continue to skew positive, based on a set of ETF pairs that serve as risk proxies through Monday’s close (Jan. 29).
Macro Briefing: 30 January 2024
* US considers how to respond to Sunday’s deadly Iranian-backed militia attack
* Democratic lawmakers pressure Fed Chairman Powell to cut rates, but…
* Is the economy too strong to warrant rate cuts?
* Eurozone growth stagnates
* Elon Musk says Neuralink implanted brain chip in a human
* Regulatory hurdles kill Amazon’s plan to buy Roomba, maker of iRobot
* US 10-year Treasury yield trades below 4.1% ahead of tomorrow’s Fed meeting:
Losses Prevail For Major Asset Classes In January
Red ink dominates 2024’s opening month for most of the major asset classes. The upside exceptions for the performance profile so far: US stocks, commodities and junk bonds. Otherwise, year-to-date losses prevail, based on a set of ETFs through Friday’s close (Jan. 26).
Macro Briefing: 29 January 2024
* Biden vows to retaliate after deadly attack on US forces in Jordan
* Iran distances itself from attack that killed 3 US soldiers in Jordan
* This week’s Fed policy decision may drop clues re: a March rate cut
* Rising real interest rates amid falling inflation is new challenge for Fed
* Falling inflation, solid growth give US economy edge over rest of world
* US borrowing by companies and consumers is picking up
* Evergrande, China’s giant property developer, is ordered to liquidate
* China approves over 40 AI models for public use over past 6 months
* US consumer spending accelerated in December:
Book Bits: 27 January 2024
● Busting the Bankers’ Club: Finance for the Rest of Us
Gerald Epstein
Review via Kirkus Reviews
An economics professor catalogs the countless ways in which the financial system fails ordinary consumers while favoring the wealthy.
“Finance,” writes Epstein, “is an essential and highly productive part of our economic system; but the financial system can also be a source of stagnation, instability, inequality, and crisis.” The essential inequities in the system have been laid bare at several points, but especially in the financial crisis of 2007-2008, when many corporations and financial institutions walked away unscathed at a cost to taxpayers of $50,000 to $120,000 per household—and not the mega-wealthy households, you can be sure.
Recession Forecasts Take A Beating After Strong Q4 GDP Growth
The only thing that was genuinely surprising in yesterday’s fourth-quarter report on US economic activity was the strength of the increase. The positive directional bias, by contrast, has been relatively clear for weeks, if not longer. Assuming, of course, that you were analyzing a broad array of indicators and avoiding the rookie mistakes of estimating recession risk.
Macro Briefing: 26 January 2024
* US jobless claims rose last week but remain low. But…
* Jobless claims may be an unreliable indicator of the labor market
* New US home sales rose more than expected in December
* Chicago Fed Nat’l Activity Index indicates softer growth in December
* Japan stock market approaching record high set in 1989
* US durable goods orders unchanged in December following November surge
* US GDP growth in Q4 beats expectations by wide margin:
Momentum Leads US Equity Factor Returns So Far In 2024
Will 2024 mark the return of the momentum factor to performance spotlight? This risk premium’s star faded in 2023, but there are hints that a rebound may be brewing for this slice of the equity risk premium, based on a set of proxy ETFs through Wednesday’s close (Jan. 24).