US business activity remains “robust” in September, according to the Composite PMI, a GDP proxy. The services sector is the main driver, posting a “solid pace” of growth, reports S&P Global Market Intelligence. By contrast, the manufacturing sector’s output fell for a second month. “The early survey indicators for September point to an economy that continues to grow at a solid pace, albeit with a weakened manufacturing sector and intensifying political uncertainty acting as substantial headwinds,” writes Chris Williamson, chief business economist at S&P Global.
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Monthly Archives: September 2024
Gold Is Enjoying A Banner Year Despite Softer Inflation
Everyone’s favorite precious metal is red hot this year, rising nearly 27% through Friday’s close (Sep. 23). Gold’s rally beats the strong runup in US stocks as well as rallies in the major asset classes, based on a set of ETFs.
Macro Briefing: 23 September 2024
The House will vote on a new three-month stopgap funding bill to avoid a partial US government shutdown that would start Oct. 1 without Congressional action. Even if the bill is enacted, the short time frame set up another high-stakes battle just ahead of the holidays.
The latest escalation in the conflict between Israel and Lebanon’s Hezbollah raises the risk of an all-out war over the Lebanese-Israeli border. “With the region on the brink of an imminent catastrophe, it cannot be overstated enough: there is NO military solution that will make either side safer,” United Nations’ special coordinator for Lebanon, Jeanine Hennis-Plasschaert wrote on X yesterday.
Gold prices rose to a new record high on Friday, closing at $2646 an ounce:
Book Bits: 21 September 2024
● The Money Trap: Lost Illusions Inside the Tech Bubble
Alok Sama
Interview with author via TechCrunch
Sama delved into points of his book, particularly the psychology of investment hype cycles and the precedent set in Silicon Valley of valuing companies based on growth predictions rather than metrics like revenue and profits. While investors are doing more due diligence in today’s risk-averse market, Sama said it’s a balance between too careful and too investment-happy.
He said Son had the opportunity to invest in Facebook at a $10 billion valuation back in 2009, but ultimately passed. Today, Meta’s valuation is over $1 trillion. “That was a case of Masa having real valuation discipline, but that came back to haunt him. That’s just the reality of tech investing.”
GDP Nowcasts Still Indicate Low Recession Risk For US In Q3
US economic activity remains on track to post a softer but still-solid growth rate in next month’s official GDP report for the third quarter. The analysis is based on the median estimate from several estimates compiled by CapitalSpectator.com.
Macro Briefing: 20 September 2024
US jobless claims fell last week, dropping to the lowest level since late-May. “The labor market is softening but not imploding as you would expect in a recession. Fed policy is aimed at supporting the job market before a recession shapes up” says Carl Weinberg, chief economist at High Frequency Economics.
Mixed Risk-Appetite Signals Sharpen Debate For Markets Outlook
Recent market volatility has raised questions about the staying power of the rally for global assets that began in late-2023. A clear warning sign has yet to emerge, based on a set of ETF pairs that measure the broad trend via prices through Sep 18. But in some corners there are hints that the tide may be turning.
Macro Briefing: 19 September 2024
US government shutdown risk rises as House rejects temporary fund bill. The government needs a stopgap measure to prevent a partial shutdown when new budget year begins Oct. 1.
The Federal Reserve cut interest rates, reducing its target rate by 1/2-percentage point to a 4.75%-to-5.25% range. “We’re trying to achieve a situation where we restore price stability without the kind of painful increase in unemployment that has come sometimes with this inflation,” says Fed Chairman Powell.
Defying Recent Recession Warnings, Growth Likely To Prevail In Q3
The recent run of forecasts from some corners that a US recession is imminent, or possibly already underway, continue to look premature. Although it’s short-sighted to dismiss various risks that are lurking, which could imperil the expansion down the road, recent data continue to support the case that modest growth rolls on.
Macro Briefing: 18 September 2024
US retail sales rose in August, posting an unexpected increase vs. expectations for a loss. The slight 0.1% monthly advance follows July’s strong 1.0% increase. “The stronger than expected retail sales data for August suggest that, boosted by rapid wealth gains and falling energy prices, consumers continue to spend freely despite the labor market slowdown,” writes Capital Economics North America economist Olivia Cross wrote in a note to clients.
