Posting will be light to mostly non-existent for the rest of the year. The Capital Spectator will return to the usual routine on Jan. 2. Best wishes to all our readers. Cheers!
Monthly Archives: December 2024
US Stocks Set To Top Asset Class Returns For 2024
American shares are poised for another year of leading global markets by a hefty margin, based on a set of ETFs through Friday’s close (Dec. 20). Echoing results in 2023, US stocks in 2024 will likely take the performance crown with a red-hot gain for a second straight calendar year.
Macro Briefing: 23 December 2024
US consumer spending increased in November, reaffirming the economy’s resiliance. Personal consumption expenditures rose 0.4% last month, edging up from a 0.3% gain in the previous month. “The economy continues to grow from strong consumer demand as income growth and the wealth effect from higher portfolio values give consumers capacity to spend,” says Jeffrey Roach, chief economist at LPL Financial. “Inflation was more benign than expected but the stickiness of some categories supports the Fed’s hesitancy to materially lower rates next year.”
Book Bits: 21 December 2024
● Smart Money: How digital currencies will win the new Cold War – and why the West needs to act now
Brunello Rosa and Casey Larsen
Summary via publisher (Bloomsbury)
A New Cold War is underway. Whereas the first Cold War was dominated by the threat of nuclear conflict, the new front line is economic and financial, but still dominated by technology. Who controls its future will help decide the outcome of the geopolitical struggle between China and the US. Since the end of the Second World War, the US dollar has been the global reserve currency, which has ensured American dominance of the world economy. But no longer. More than a hundred countries are developing Central Bank Digital Currencies (CBDCs), digital equivalents to cash that will utterly transform how we do business at home and abroad.
Government Shutdown Risk Is New Headache For US Economy
The good news is that the engine of growth for the US economy is the private sector. But the government’s share of GDP isn’t trivial, which means that a potential government shutdown that could start at midnight tonight will be a non-trivial event.
Macro Briefing: 20 December 2024
US government shutdown approaches after House rejects Trump-backed spending bill. To keep the government running, the Republican House Speaker Mike Johnson must find a way to pass legislation before midnight tonight (Dec.2). Meanwhile, the US 10-year Treausry yield shot higher again yesterday (Dec. 19), rising to 4.57%, the highest since May.
Markets Focus On Reflation Risk After Fed Cuts Rates
There are several reasons for adopting a cautious near-term outlook for markets, and reflation risk is arguably at the top of the list. That’s old news, but it’s a topic that’s keenly in focus after the Federal Reserve decided on Wednesday to cut interest rates for a third time.
Macro Briefing: 19 December 2024
Treasury yields rise sharply after the Federal Reserve cuts its target rate by 1/4 point–the third straight cut. The US 10-year Treasury yield shot up after the announcement, ending at 4.52%, the highest since May.
Should The Fed Cut Interest Rates Today?
The market is confident that a 25-basis-points reduction is a done-deal for today’s policy announcement, based on Fed funds futures. But the question of whether the Fed should cut is more complicated.
Macro Briefing: 18 December 2024
US retail sales rose for a third straight month in November. Spending rose 0.7% last month, beating expectations. “We ultimately expect this will be a decent holiday sales season for retailers,” writes Tim Quinlan, an economist at Wells Fargo, in a note to clients. “It’s not going to knock anyone’s socks off in the wake of record pandemic gains, but continued consumer momentum means it’s unlikely to be overly weak either.”
