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

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    <p>The anticipated recovery in U.S. economic activity is likely to decelerate in the fourth quarter, as per a median of forecasts gathered by CapitalSpectator.com. This nowcast provides a glimmer of hope amid ongoing recession predictions, but indicators related to the business cycle indicate that the GDP forecast for Q4 may diminish as new economic data is released in the upcoming weeks.</p>

    <p><a href="https://www.capitalspectator.com/us-gdp-growth-on-track-to-slow-in-q4-as-recession-risk-rises/#more-19251" 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-gdp-growth-on-track-to-slow-in-q4-as-recession-risk-rises/" title="7:18 am" rel="bookmark"><time class="entry-date" datetime="2022-12-06T07:18:11-05:00">December 6, 2022</time></a>
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    <p>* Ukraine's drones <a href="https://www.cnbc.com/2022/12/06/renewables-to-be-main-source-of-electricity-generation-by-2025-iea.html">broaden</a> strikes into Russia<br />* Global economic activity increased in November, as indicated by PMI survey data <a href="https://www.pmi.spglobal.com/Public/Home/PressRelease/2e0ef98927e64e73946afec94adbd153">reports</a><br />* U.S. factory orders <a href="https://www.forexlive.com/news/us-factory-orders-for-october-1-0-versus-07-estimate-20221205/">exceeded</a> forecasts for October<br />* Global manufacturing operations are <a href="https://www.axios.com/2022/12/05/china-manufacturing-iphone">shifting</a> away from China<br />* Oil prices <a href="https://www.bbc.com/news/business-63855030">rise</a> as caps on Russian crude prices come into effect<br />* According to the IEA, renewables are projected to be the largest source of electricity generation by 2025 <a href="https://www.cnbc.com/2022/12/06/renewables-to-be-main-source-of-electricity-generation-by-2025-iea.html">says</a><br />* CEO optimism is <a href="https://finance.yahoo.com/news/ce-os-not-optimistic-2023-172231166.html">declining</a> regarding the outlook for 2023<br />* <a href="https://www.pmi.spglobal.com/Public/Home/PressRelease/af9bd2435c984707b19cb0501019743d">U.S. Services PMI:</a> “Business activity contraction intensifies” in November, yet…<br />* The ISM U.S. Services Index <a href="https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/services/november/">reports</a> stronger growth in November:</p>
    <p><a href="https://www.capitalspectator.com/wp-content/uploads/2022/12/ism.services.06dec2022.png"><img fetchpriority="high" decoding="async" class="alignnone  wp-image-19248" src="https://www.capitalspectator.com/wp-content/uploads/2022/12/ism.services.06dec2022.png" alt="" width="464" height="259"   /></a></p>
    <p><a href="https://www.capitalspectator.com/macro-briefing-6-december-2022/#more-19247" 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-6-december-2022/" title="6:23 am" rel="bookmark"><time class="entry-date" datetime="2022-12-06T06:23:17-05:00">December 6, 2022</time></a>
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    <p>Stocks in emerging markets continued their recent rebound, achieving the most substantial gains among the <a href="https://www.capitalspectator.com/major-asset-classes-november-2022-performance-review/">major asset classes</a> during the trading week ending Friday, December 2, according to various ETFs.</p>

    <p><a href="https://www.capitalspectator.com/emerging-markets-stocks-top-last-weeks-rebound-for-risk-assets/#more-19241" 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/emerging-markets-stocks-top-last-weeks-rebound-for-risk-assets/" title="7:16 am" rel="bookmark"><time class="entry-date" datetime="2022-12-05T07:16:10-05:00">December 5, 2022</time></a>
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    <p>* A stronger-than-expected jobs report <a href="https://www.cnbc.com/2022/12/02/the-feds-path-to-a-goldilocks-economy-just-got-more-complicated.html">increases pressure on the Fed</a> to maintain strict policies<br />* China's services activity in November <a href="https://www.asiafinancial.com/china-services-activity-sinks-to-6-month-lows-caixin">declined</a> to its lowest level since May<br />* U.S. manufacturing orders from China have <a href="https://www.cnbc.com/2022/12/04/manufacturing-orders-from-china-down-40percent-in-demand-collapse.html">dropped</a> by 40 percent<br />* Retail sales in the Eurozone for October <a href="https://www.rttnews.com/3329795/eurozone-retail-sales-drop-most-in-10-months.aspx?type=alleco">suffered</a> their most significant monthly decline in 2022<br />* OPEC <a href="https://www.cnn.com/2022/12/04/energy/opec-production-oil-prices/index.html">continues</a> oil supply cuts as Western nations tighten sanctions on Russian oil<br />* BP <a href="https://www.ibtimes.com/bp-doubles-down-hydrogen-fuel-future-3643460">invests heavily</a> in hydrogen as a key energy source<br />* Developing nations are <a href="https://www.nytimes.com/2022/12/03/business/developing-countries-debt-defaults.html">facing</a> an impending debt crisis<br />* Global food prices <a href="https://www.bloomberg.com/news/articles/2022-12-02/food-prices-decline-for-eighth-month-easing-inflation-pressures?utm_source=substack&amp;utm_medium=email&amp;leadSource=uverify%20wall">continued to fall</a> in November<br />* No actively managed mutual funds consistently outperform their benchmarks, a <a href="https://www.nytimes.com/2022/12/02/business/stock-market-index-funds.html">recent study reveals</a><br />* U.S. payrolls outperformed expectations and <a href="https://www.cnbc.com/2022/12/02/jobs-report-november-2022.html">showed solid gains</a> for November:</p>
    <p><a href="https://www.capitalspectator.com/wp-content/uploads/2022/12/payrolls.05dec2022.png"><img decoding="async" class="alignnone size-full wp-image-19240" src="https://www.capitalspectator.com/wp-content/uploads/2022/12/payrolls.05dec2022.png" alt="" width="818" height="502"   /></a></p>
    <p><a href="https://www.capitalspectator.com/macro-briefing-5-december-2022/#more-19237" 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-5-december-2022/" title="6:25 am" rel="bookmark"><time class="entry-date" datetime="2022-12-05T06:25:34-05:00">December 5, 2022</time></a>
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    <p><a href="https://www.amazon.com/Escape-Model-Land-Mathematical-Models-ebook/dp/B09X5BK7RK?crid=1F1OSE57J8X7X&amp;keywords=Escape+from+Model+Land%3A+How+Mathematical+Models+Can+Lead+Us+Astray+and+What+We+Can+Do+About+It&amp;qid=1669998992&amp;sprefix=escape+from+model+land+how+mathematical+models+can+lead+us+astray+and+what+we+can+do+about+it%2Caps%2C104&amp;sr=8-1&amp;linkCode=li2&amp;tag=thecapitalspe-20&amp;linkId=7df09b773d9b130f9d5cc3232cbe9b7d&amp;language=en_US&amp;ref_=as_li_ss_il" target="_blank" rel="noopener"><img decoding="async" class="alignleft" src="https://ws-na.amazon-adsystem.com/widgets/q?_encoding=UTF8&amp;ASIN=B09X5BK7RK&amp;Format=_SL160_&amp;ID=AsinImage&amp;MarketPlace=US&amp;ServiceVersion=20070822&amp;WS=1&amp;tag=thecapitalspe-20&amp;language=en_US" border="0" /></a><img decoding="async" style="border: none !important; margin: 0px !important;" src="https://ir-na.amazon-adsystem.com/e/ir?t=thecapitalspe-20&amp;language=en_US&amp;l=li2&amp;o=1&amp;a=B09X5BK7RK" alt="" width="1" height="1" border="0" />● <a href="https://amzn.to/3OVAbiE">Escape from Model Land: How Mathematical Models Can Lead Us Astray and What We Can Do About It</a><br />Erica Thompson<br /><strong><a href="https://www.economist.com/culture/2022/11/30/two-new-books-explore-the-upside-of-big-data-and-ai">Review</a> via The Economist</strong><br />The author urges data analysts to enhance their solutions to tackle real-world problems, rather than simply fine-tuning their models. She emphasizes the importance of developing practical, reasonable answers over seeking perfect solutions. Additionally, she points out that prior to creating a statistical model, a mental version already exists. Data scientists need a blend of self-awareness, empathy, and mathematical skills.</p>
    <p><a href="https://www.capitalspectator.com/book-bits-3-december-2022/#more-19214" 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-3-december-2022/" title="3:02 am" rel="bookmark"><time class="entry-date" datetime="2022-12-03T03:02:00-05:00">December 3, 2022</time></a>
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    <p>The anticipated long-term returns for most of the <a href="https://www.capitalspectator.com/major-asset-classes-november-2022-performance-review/">major asset classes</a> continue to appear fairly attractive, according to updates from CapitalSpectator.com. The exception is U.S. stocks, which currently exhibit the weakest performance forecast compared to their trailing ten-year return.</p>

    <p><a href="https://www.capitalspectator.com/total-return-forecasts-major-asset-classes-2-december-2022/#more-19232" 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/total-return-forecasts-major-asset-classes-2-december-2022/" title="7:09 am" rel="bookmark"><time class="entry-date" datetime="2022-12-02T07:09:27-05:00">December 2, 2022</time></a>
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    <p>* The Fed’s preferred inflation measure <a href="https://www.nytimes.com/2022/12/01/business/inflation-federal-reserve.html">indicates signs of slowing</a> for October<br />* U.S. consumer spending <a href="https://www.wsj.com/articles/inflation-consumer-spending-personal-income-october-2022-11669854512">accelerated</a> in October<br />* OPEC+ is <a href="https://www.cnbc.com/2022/12/02/opec-meeting-oil-output-cuts-on-the-table-ahead-of-russia-sanctions.html">considering</a> deeper oil output reductions<br />* U.S. construction spending <a href="https://www.reuters.com/markets/us/us-construction-spending-falls-october-single-family-housing-2022-12-01/">saw a sharp decline</a> in October, driven by weak homebuilding activity<br />* The Atlanta Fed’s Q4 GDP nowcast has been <a href="https://www.atlantafed.org/cqer/research/gdpnow">revised down</a> to a still-healthy +2.8%<br />* Global manufacturing conditions <a href="https://www.spglobal.com/marketintelligence/en/mi/research-analysis/global-manufacturing-pmi-signals-further-steep-worldwide-trade-slump-in-november-Dec22.html">further deteriorated</a> in November<br />* U.S. manufacturing activity <a href="https://www.logisticsmgmt.com/article/manufacturing_output_falls_in_november_reports_ism">contracted</a> in November, according to the ISM Mfg Index:</p>
    <p><a href="https://www.capitalspectator.com/wp-content/uploads/2022/12/ism.01dec2022.png"><img loading="lazy" decoding="async" class="alignnone size-full wp-image-19231" src="https://www.capitalspectator.com/wp-content/uploads/2022/12/ism.01dec2022.png" alt="" width="467" height="277"   /></a></p>
    <p><a href="https://www.capitalspectator.com/macro-briefing-2-december-2022/#more-19230" 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-2-december-2022/" title="6:37 am" rel="bookmark"><time class="entry-date" datetime="2022-12-02T06:37:32-05:00">December 2, 2022</time></a>
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    <p>The recovery in global markets advanced and expanded in November, building on <a href="https://www.capitalspectator.com/major-asset-classes-october-2022-performance-review/">the rebound seen in October.</a> With the exception of commodities, which lost value, all other major asset classes experienced gains in November, based on data from a selection of proxy ETFs.</p>

    <p><a href="https://www.capitalspectator.com/major-asset-classes-november-2022-performance-review/#more-19226" 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/major-asset-classes-november-2022-performance-review/" title="7:19 am" rel="bookmark"><time class="entry-date" datetime="2022-12-01T07:19:57-05:00">December 1, 2022</time></a>
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    <p>* Smaller interest rate hikes may begin as soon as the meeting on December 14, <a href="https://www.cnbc.com/2022/11/30/fed-chair-jerome-powell-says-smaller-rate-hikes-could-come-in-december.html">states</a> Fed Chair Powell<br />* The House <a href="https://abcnews.go.com/Politics/house-votes-impose-block-rail-strike/story?id=94207518">approved measures</a> to prevent a rail strike<br />* China <a href="https://www.bbc.com/news/world-asia-china-63805188">indicates</a> a possible easing of COVID restrictions following recent protests<br />* Pending home sales in the U.S. <a href="https://www.mortgagenewsdaily.com/news/11302022-pending-home-sales">declined</a> for the fifth consecutive month in October<br />* Mortgage rates <a href="https://www.cnbc.com/2022/11/30/mortgage-rates-fall-for-the-third-straight-week-but-demand-still-drops-further.html">decreased</a> for the third week, but housing demand remains weak<br />* Job openings in the U.S. <a href="https://www.cnbc.com/2022/11/30/jolts-report-october-2022-job-openings-fall-amid-fed-efforts-to-cool-labor-market.html">cooled</a> in October<br />* The Federal Reserve’s Beige Book indicates rising <a href="https://www.wsj.com/articles/u-s-economic-growth-slowed-this-fall-feds-beige-book-says-11669836396">economic uncertainty</a> as growth slows<br />* Q3 GDP growth has been <a href="https://www.barrons.com/articles/gdp-higher-no-recession-just-yet-51669820503">revised upward</a> to +2.9%<br />* U.S. private sector job growth <a href="https://www.rttnews.com/3328917/u-s-private-sector-job-growth-falls-well-short-of-estimates-in-november.aspx">slowed significantly</a> in November according to <a href="https://adpemploymentreport.com/">ADP data:</a></p>
    <p><a href="https://www.capitalspectator.com/wp-content/uploads/2022/11/adp.01dec2022.png"><img loading="lazy" decoding="async" class="alignnone size-full wp-image-19223" src="https://www.capitalspectator.com/wp-content/uploads/2022/11/adp.01dec2022.png" alt="" width="661" height="469"   /></a></p>
    <p><a href="https://www.capitalspectator.com/macro-briefing-1-december-2022/#more-19222" 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-1-december-2022/" title="6:16 am" rel="bookmark"><time class="entry-date" datetime="2022-12-01T06:16:16-05:00">December 1, 2022</time></a>
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    <p>This year's performance for most equity strategies, diversified across global markets, will be disappointing. Unless there is a significant rally before the year ends, losses will likely be the prevailing outcome. However, in times of decline, it is crucial to start scouting for potential bargains.</p>

    <p><a href="https://www.capitalspectator.com/waiting-and-hoping-for-a-bottom-in-global-equity-markets/#more-19218" 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/waiting-and-hoping-for-a-bottom-in-global-equity-markets/" title="7:34 am" rel="bookmark"><time class="entry-date" datetime="2022-11-30T07:34:41-05:00">November 30, 2022</time></a>
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