The Chinese stock market has outperformed its global counterparts for most of the year, primarily by suffering fewer losses compared to other major equity markets, as observed in various publicly traded funds listed in the US. Although American stocks briefly took the lead in late May, recent trading data through Monday, June 15, indicates that Chinese stocks have regained their position at the forefront.
The Trump administration is reportedly preparing a massive $1 trillion infrastructure stimulus package: BBG
The Supreme Court has ruled that LGBTQ discrimination in the workplace is illegal: CNN
North Korea has destroyed a liaison office established to foster relations with the South: Reuters
Tensions along the India-China border have escalated following the deaths of three Indian soldiers in a clash: NYT
Global credit markets are responding positively after the Federal Reserve announced it would purchase individual corporate bonds: BBG
The IEA predicts the largest-ever drop in oil demand before a potential rebound: CNBC
Dallas Fed President anticipates a US economic recovery in the latter half of 2020: WSJ
UK jobless claims have nearly doubled due to the coronavirus lockdown: BBG
German investor sentiment has improved unexpectedly in June: Reuters
US retail sales are expected to show a strong rebound in today’s May update: Reuters
The New York Fed Manufacturing Index indicates a bounce-back in June, signaling potential economic recovery: NYFed
Last week, government bonds in developed foreign markets experienced an extended rally due to a resurgence of risk-off sentiment. This segment of global fixed income outperformed all major asset classes during the trading week ending on Friday, June 12, as indicated by various exchange-traded funds.
Secretary of State Pompeo is set to meet with Chinese officials in Hawaii this week: CNN
US stock futures fell sharply in early trading on Monday: CNBC
China has reported its Covid-19 cases have surged to a two-month high: Vox
Former US Marine Paul Whelan has been sentenced to 16 years in a Russian prison: BBC
Health officials question whether a second wave of Covid-19 infections has begun in the US: CNBC
Transitioning away from reliance on Chinese imports poses challenges for the global economy: NYT
Morgan Stanley economists predict global economic recovery by Q4: Bloomberg
Despite the recession, large tech companies continue to make significant investments for growth: NYT
The US Consumer Sentiment Index is showing signs of recovery in June: UoM
Stephanie Kelton
Review via San Antonio Express-News
We are living in unprecedented times. The revolutionary ideas, once dismissed as reckless, are now being embraced. The balance of power is shifting towards the advocates of Modern Monetary Theory, or MMT.
To provide a brief overview: MMT posits that governments with the ability to create their own currency, such as the United States, need not fear defaulting due to excessive debt. There is no requirement for taxes to align with spending, now or at any time. Borrowing and monetary creation can always bridge the gap between taxation and expenditure.
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Breaking Bad Trends
Ashish Garg (Research Affiliates), et al.
May 7, 2020
This research documents and quantifies the negative effects of trend breaks (i.e., pivotal changes in asset price trajectories) on the efficacy of standard trend-following strategies across numerous assets and classes. The frequency of trend breaks has increased in recent years, shedding light on the underperformance of monthly trend-following strategies over the past decade. The study illustrates how to enhance trend-following strategies by leveraging the predictive capabilities of various trend breaks: market corrections and recoveries. We construct dynamic, multi-asset trend-following portfolios, yielding returns that exceed double those of traditional trend-following investment strategies during the last decade.
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Several US states have reported surges in Covid-19 cases following the Memorial Day weekend: WSJ
IMHE’s US model forecasts the risk of a second Covid-19 wave in Q4: IMHE
US stock futures rebounded in early trading on Friday following a notable drop on Thursday: CNBC
A recent survey indicates broad support among Americans for extensive police reform proposals: Reuters
North Korea has virtually ended its diplomatic efforts with the US following a stern announcement: BBC
Economic forecasts suggest that economists predict a recovery for the US economy by Q3: WSJ
The UK economy saw a staggering 20% contraction in April: Bloomberg
Eurozone industrial output decreased by a record 17.1% in April compared to March: Reuters
US jobless claims continued to rise sharply last week: CNBC
If there was ever a time to consider a fixed-income allocation, 2020 certainly fits the bill. As the coronavirus pandemic disrupted global equity markets, bonds—especially government bonds—have played a crucial role in supporting portfolio strategies. However, the advantages of fixed income for US investors have mainly been a domestic trend. In contrast, foreign bonds have yielded minimal gains this year up to June 11, according to a selection of proxy ETFs.
Covid-19 cases in the US have surpassed 2 million, raising concerns about a potential second wave: BBG
A Harvard health expert warns that US Covid-19 deaths could double by September: CNN
As economies begin to reopen globally, Covid-19 cases are on the rise: NY Times
The Federal Reserve predicts no interest rate hikes through 2022: WSJ
A significant rise in US jobless claims is expected in today’s report: MW
Cash hoarding in Europe suggests an anemic economic recovery: BBG
Few signs indicate that active management has effectively capitalized on recent market volatility: II
US consumer inflation’s yearly trend dropped to nearly zero in May: MW
Although the most dire phase of the pandemic in the US seems to be fading, economic forecasts for the immediate future remain rather bleak. Recent predictions for the upcoming second-quarter GDP report are alarmingly negative. Amid this macroeconomic uncertainty, the Federal Reserve is set to release its own revised economic projections as part of a monetary statement today.
In conclusion, the global economic landscape remains complex and evolving amidst the ongoing repercussions of the Covid-19 pandemic. From stock market performances to government policies and investor sentiment, developments across various sectors indicate both challenges and opportunities. Careful observation and strategic adjustments will be essential as we navigate these turbulent times.
