The Capital Spectator: Investing, Asset Allocation, and Economic Insights

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        <p>The latest headlines indicate a complex picture for the US economy:</p>
        <ul>
            <li>* A weak Q1 GDP report in the US <a href="https://fortune.com/2024/04/28/us-economy-outlook-q1-gdp-growth-report-consumer-demand-services/">hides</a> some underlying strengths, according to <a href="https://wellsfargo.bluematrix.com/links2/html/7f85cb02-aa56-40f0-b7ea-a21e8f006a1d">Wells Fargo</a>.</li>
            <li>* The US Federal Reserve's meeting this week comes as expectations for a summer rate cut <a href="https://www.ibtimes.com/us-fed-meet-amid-dwindling-hopes-summer-rate-cuts-3730764">diminish</a>.</li>
            <li>* Wealthy older Americans may be <a href="https://apnews.com/article/inflation-economy-wealth-rates-federal-reserve-cuts-9290216e89cbd7a3a0d2be66041aeaf8">driving</a> economic growth and delaying rate cuts.</li>
            <li>* Expectations of a higher neutral rate <a href="https://www.wsj.com/economy/central-banking/why-high-interest-rates-could-be-here-for-the-long-run-c6670448?mod=hp_lead_pos1">indicate</a> that low interest rate days may be behind us.</li>
            <li>* US consumer spending <a href="https://www.bea.gov/news/2024/personal-income-and-outlays-march-2024">increased</a> more than anticipated in March:</li>
        </ul>
        <p><a href="https://www.capitalspectator.com/wp-content/uploads/2024/04/spending.29apr2024.png"><img fetchpriority="high" decoding="async" class="alignnone size-full wp-image-22097" src="https://www.capitalspectator.com/wp-content/uploads/2024/04/spending.29apr2024.png" alt="" width="1333" height="680"  /></a></p>
        <p> <a href="https://www.capitalspectator.com/macro-briefing-29-april-2024/#more-22096" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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        By James Picerno | <a href="https://www.capitalspectator.com/macro-briefing-29-april-2024/" title="6:23 am" rel="bookmark"><time class="entry-date" datetime="2024-04-29T06:23:19-04:00">April 29, 2024</time></a>                                          </footer><!-- .entry-meta -->
</div><div id="post-22078">
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        <p><a href="https://www.capitalspectator.com/wp-content/uploads/2024/04/algebra.25apr2024.png"><img decoding="async" class="wp-image-22079 alignleft" src="https://www.capitalspectator.com/wp-content/uploads/2024/04/algebra.25apr2024.png" alt="" width="134" height="202"  /></a>● <a href="https://amzn.to/4b6fPNw">The Algebra of Wealth: A Simple Formula for Financial Security</a><br/>Scott Galloway<br/><strong><a href="https://nymag.com/intelligencer/article/scott-galloway-on-whether-college-is-still-worth-it.html">Q&amp;A</a> with the author via New York magazine</strong><br/>Q: After discussing how crypto could democratize finance, you've now mentioned how AI is democratizing talent. Can you elaborate?<br/>A: I hesitate to label these trends as get-rich-quick schemes. The number of individuals who profited from buying crypto or investing in Nvidia when it was priced at $10 (now valued at $800) is limited. Even among this select group, many eventually lose their gains because they mistakenly attribute their success to skill rather than fortune. They often revisit the market with bigger, riskier investments, only to be reminded, sometimes harshly, that it was luck, not talent, that brought them success. Over time, luck tends to balance itself out. There are certainly individuals who saw massive returns from meme stocks, but the majority lost their fortunes trying to conflate luck with talent.</p>
        <p> <a href="https://www.capitalspectator.com/book-bits-27-april-2024/#more-22078" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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        By James Picerno | <a href="https://www.capitalspectator.com/book-bits-27-april-2024/" title="2:28 am" rel="bookmark"><time class="entry-date" datetime="2024-04-27T02:28:00-04:00">April 27, 2024</time></a>                                           </footer><!-- .entry-meta -->
</div><div id="post-22084">
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        <p>Recent data from the first-quarter GDP report sent mixed signals to the markets, showing both slower-than-expected growth and higher-than-anticipated inflation. This prompted stocks to decline while US Treasury yields rose. While the initial market response appears justified, an in-depth review of the GDP figures raises questions about their interpretation.</p>
        <p> <a href="https://www.capitalspectator.com/is-the-hot-inflation-data-in-q1-noise-or-signal/#more-22084" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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        By James Picerno | <a href="https://www.capitalspectator.com/is-the-hot-inflation-data-in-q1-noise-or-signal/" title="7:49 am" rel="bookmark"><time class="entry-date" datetime="2024-04-26T07:49:06-04:00">April 26, 2024</time></a>                                           </footer><!-- .entry-meta -->
</div><div id="post-22081">
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        <p>* Elevated commodity prices could be yet another factor contributing to potential delays in rate cuts: <a href="https://www.wsj.com/finance/commodities-futures/persistently-high-commodity-prices-could-delay-interest-rate-cuts-world-bank-says-ddd91be5">World Bank</a><br/>* Pending U.S. home sales <a href="https://www.cnn.com/2024/04/25/economy/us-pending-home-sales-march/index.html">surged</a> much more than expected in March<br/>* Jobless claims in the US <a href="https://finance.yahoo.com/news/us-applications-jobless-claims-fall-124135611.html">dropped</a> to the lowest level in nine weeks<br/>* US inflation <a href="https://www.bbc.com/news/business-68898432">increased</a> in the first quarter<br/>* US GDP growth <a href="https://www.axios.com/2024/04/25/us-economy-gdp-report-q1-2024">slowed</a> more than forecast in the first quarter:</p>
        <p><a href="https://www.capitalspectator.com/wp-content/uploads/2024/04/gdp.25apr2024.png"><img decoding="async" class="alignnone size-full wp-image-22082" src="https://www.capitalspectator.com/wp-content/uploads/2024/04/gdp.25apr2024.png" alt="" width="759" height="520"  /></a></p>
        <p> <a href="https://www.capitalspectator.com/macro-briefing-26-april-2024/#more-22081" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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        By James Picerno | <a href="https://www.capitalspectator.com/macro-briefing-26-april-2024/" title="6:44 am" rel="bookmark"><time class="entry-date" datetime="2024-04-26T06:44:44-04:00">April 26, 2024</time></a>                                          </footer><!-- .entry-meta -->
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        <p>Recent trends show that while enthusiasm in the markets has cooled, it remains uncertain whether the risk-on sentiment for equities has truly plateaued or is merely pausing to consolidate gains. This assessment stems from an analysis of ETFs to evaluate risk appetite, derived from prices up to yesterday's close (April 24).</p>
        <p> <a href="https://www.capitalspectator.com/does-reflation-risk-threaten-the-risk-on-signal-for-stocks/#more-22072" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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        By James Picerno | <a href="https://www.capitalspectator.com/does-reflation-risk-threaten-the-risk-on-signal-for-stocks/" title="7:26 am" rel="bookmark"><time class="entry-date" datetime="2024-04-25T07:26:15-04:00">April 25, 2024</time></a>                                            </footer><!-- .entry-meta -->
</div><div id="post-22069">
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        <p>* Forecasts remain <a href="https://www.morningstar.com/stocks/march-pce-inflation-index-forecasts-show-mixed-readings-price-pressures">mixed</a> for the upcoming PCE inflation data for March<br/>* Mining giant BHP <a href="https://www.wsj.com/business/deals/bhp-makes-offer-for-rival-anglo-american-in-potential-mega-mining-deal-f2f5f99e">tendered an offer</a> for rival Anglo American in a monumental $39 billion deal<br/>* Mortgage demand <a href="https://www.cnbc.com/2024/04/24/mortgage-demand-drops-as-interest-rates-soar-over-7percent.html">declined</a> as mortgage rates surged to their highest levels since November<br/>* Solar manufacturers <a href="https://www.politico.com/news/2024/04/24/u-s-solar-manufacturers-petitions-southeast-asia-00153994">have petitioned</a> the US to impose tariffs on Asian imports<br/>* US durable goods orders <a href="https://www.rttnews.com/3441307/u-s-durable-goods-orders-surge-2-6-in-march-more-than-expected.aspx">increased</a> more than anticipated in March:</p>
        <p><a href="https://www.capitalspectator.com/wp-content/uploads/2024/04/goods.25apr2024.png"><img loading="lazy" decoding="async" class="alignnone size-full wp-image-22070" src="https://www.capitalspectator.com/wp-content/uploads/2024/04/goods.25apr2024.png" alt="" width="700" height="500"  /></a></p>
        <p> <a href="https://www.capitalspectator.com/macro-briefing-25-april-2024/#more-22069" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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        By James Picerno | <a href="https://www.capitalspectator.com/macro-briefing-25-april-2024/" title="6:37 am" rel="bookmark"><time class="entry-date" datetime="2024-04-25T06:37:24-04:00">April 25, 2024</time></a>                                          </footer><!-- .entry-meta -->
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        <p>The average trailing yield for major asset classes has seen a slight increase this year, based on data from a range of proxy ETFs up to yesterday's close (April 23). Despite this rise, government bonds continue to provide a more attractive return compared to Treasury yields.</p>
        <p> <a href="https://www.capitalspectator.com/desperately-seeking-yield-24-april-2024/#more-22067" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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        By James Picerno | <a href="https://www.capitalspectator.com/desperately-seeking-yield-24-april-2024/" title="7:32 am" rel="bookmark"><time class="entry-date" datetime="2024-04-24T07:32:23-04:00">April 24, 2024</time></a>                                           </footer><!-- .entry-meta -->
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        <p>* The Federal Reserve is likely to lean towards a hawkish stance, reducing the likelihood of rate cuts: <a href="https://www.cnbc.com/video/2024/04/23/former-fed-vice-chair-richard-clarida-fed-looks-likely-to-err-on-hawkish-side-of-fewer-rate-cuts.html">Former Fed Vice Chair Clarida</a><br/>* China may brace for a new wave of bond defaults, <a href="https://www.cnbc.com/2024/04/24/china-may-have-to-brace-for-a-new-wave-of-bond-defaults-sp-says.html">according to</a> S&P Global Ratings<br/>* Ether ETFs are unlikely to gain US approval in May, as reported by <a href="https://www.coindesk.com/markets/2024/04/23/ether-etfs-are-unlikely-to-be-approved-in-may-standard-chartered/">Standard Chartered</a><br/>* New home sales in the US <a href="https://www.cnn.com/2024/04/23/economy/new-home-sales-march/index.html">increased</a> in March despite high mortgage rates<br/>* The US economic activity <a href="https://www.pmi.spglobal.com/Public/Home/PressRelease/2a6d069e95b3402f85a5e44e3ff49917">slowed</a> to a four-month low in April, according to PMI survey data:</p>
        <p><a href="https://www.capitalspectator.com/wp-content/uploads/2024/04/pmi.24apr2024.png"><img loading="lazy" decoding="async" class="alignnone size-full wp-image-22065" src="https://www.capitalspectator.com/wp-content/uploads/2024/04/pmi.24apr2024.png" alt="" width="586" height="347"  /></a></p>
        <p> <a href="https://www.capitalspectator.com/macro-briefing-24-april-2024/#more-22064" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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        By James Picerno | <a href="https://www.capitalspectator.com/macro-briefing-24-april-2024/" title="6:38 am" rel="bookmark"><time class="entry-date" datetime="2024-04-24T06:38:07-04:00">April 24, 2024</time></a>                                          </footer><!-- .entry-meta -->
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        <p>The US economy appears to be gearing up for a slowdown, as indicated by the anticipated first-quarter GDP report set for release on Thursday (April 25). This prediction is based on current median forecasts compiled by CapitalSpectator.com.</p>
        <p> <a href="https://www.capitalspectator.com/us-q1-gdp-report-looks-set-for-slowdown-in-thursdays-release/#more-22061" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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        By James Picerno | <a href="https://www.capitalspectator.com/us-q1-gdp-report-looks-set-for-slowdown-in-thursdays-release/" title="7:42 am" rel="bookmark"><time class="entry-date" datetime="2024-04-23T07:42:13-04:00">April 23, 2024</time></a>                                          </footer><!-- .entry-meta -->
</div><div id="post-22057">
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        <p>* The US government is <a href="https://www.wsj.com/politics/national-security/u-s-takes-aim-at-chinese-banks-aiding-russia-war-effort-fcf76dcc?mod=hp_lead_pos1">considering</a> sanctions against Chinese banks that are supporting Russia<br/>* Analysts at JPMorgan forecast that the US stock market decline has "further to go"<a href="https://finance.yahoo.com/news/jpmorgan-warns-stock-market-sell-off-has-further-to-go-080049554.html">,</a> predicting continued downturns<br/>* The technology sector appears overpriced, according to the head of the world’s largest sovereign wealth fund<a href="https://www.cnbc.com/2024/04/23/tech-ceo-of-worlds-largest-wealth-fund-says-theres-a-lot-of-froth.html">.</a><br/>* The Eurozone economy is showing signs of recovery for the first time since May 2023, as reported in a <a href="https://www.pmi.spglobal.com/Public/Home/PressRelease/d47e82c000444893bf612585ded30a0e">PMI survey</a><br/>* A risk-parity strategy is facing challenges, leading <a href="https://finance.yahoo.com/news/ray-dalio-famous-trade-sputtering-110000819.html">investors to reconsider</a> their positions<br/>* US economic growth has shown signs of strengthening in March according to the <a href="https://www.chicagofed.org/research/data/cfnai/current-data">Chicago Fed National Activity Index</a>:</p>
        <p><a href="https://www.capitalspectator.com/wp-content/uploads/2024/04/cfnai.23apr2024.png"><img loading="lazy" decoding="async" class="alignnone size-full wp-image-22058" src="https://www.capitalspectator.com/wp-content/uploads/2024/04/cfnai.23apr2024.png" alt="" width="1018" height="685"  /></a></p>
        <p> <a href="https://www.capitalspectator.com/macro-briefing-23-april-2024/#more-22057" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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        By James Picerno | <a href="https://www.capitalspectator.com/macro-briefing-23-april-2024/" title="6:55 am" rel="bookmark"><time class="entry-date" datetime="2024-04-23T06:55:36-04:00">April 23, 2024</time></a>                                          </footer><!-- .entry-meta -->
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