The US economy is projected to rebound in the second quarter after experiencing a contraction in the first quarter. This outlook is based on a series of GDP nowcasts compiled by CapitalSpectator.com. While these early estimates should be interpreted with caution, the initial signs are optimistic.
<footer class="entry-meta">
By James Picerno | <a href="https://www.capitalspectator.com/early-q2-gdp-nowcasts-point-to-rebound-for-us-economy/" title="7:10 am" rel="bookmark"><time class="entry-date" datetime="2022-05-17T07:10:14-04:00">May 17, 2022</time></a>
</footer><!-- .entry-meta -->
<div class="entry-content">
<p>* Turkey <a href="https://www.bbc.com/news/world-europe-61472021">threatens</a> to block Finland and Sweden from joining NATO<br/>* Former Fed Chair Bernanke <a href="https://finance.yahoo.com/news/ben-bernanke-helped-u-recover-171323958.html">is concerned</a> about rising stagflation risks in the US<br/>* Food supply chains <a href="https://www.cnbc.com/2022/05/16/us-europe-to-improve-food-chains-after-india-bans-wheat-exports.html">are under scrutiny</a> following India's ban on wheat exports<br/>* Predictions indicate US gasoline prices might soon hit $5 per gallon, according to energy analysts <a href="https://www.ibtimes.com/gas-price-prediction-5-possible-across-us-4-states-already-above-rate-3509690">forecast</a><br/>* Berkshire Hathaway, led by Buffett, <a href="https://www.wsj.com/articles/warren-buffett-spends-big-as-stock-market-sells-off-11652589031?mod=hp_lead_pos4">invests heavily</a> in energy stocks as inflation escalates<br/>* A strong US dollar poses challenges for emerging markets, <a href="https://www.ft.com/content/099cf547-9081-488b-87c3-5bf66c18843f">experts warn</a><br/>* US officials <a href="https://www.bbc.com/news/world-europe-61473884">announce</a> intentions to ease stringent sanctions on Cuba<br/>* The NY Fed Manufacturing Index indicates sector activity <a href="https://www.marketwatch.com/story/u-s-manufacturing-is-wobbling-will-it-fall-down-11652722645">contracted in May:</p>
<footer class="entry-meta">
By James Picerno | <a href="https://www.capitalspectator.com/macro-briefing-17-may-2022/" title="5:40 am" rel="bookmark"><time class="entry-date" datetime="2022-05-17T05:40:07-04:00">May 17, 2022</time></a>
</footer><!-- .entry-meta -->
<div class="entry-content">
Fixed income markets exhibited their traditional diversification benefits last week, as selling pressures affected other major asset classes, based on a set of ETFs leading up to Friday’s close (May 13). While it’s premature to declare an extended rebound for bonds after a challenging year, last week’s uptick may spark further discussion.
<footer class="entry-meta">
By James Picerno | <a href="https://www.capitalspectator.com/bonds-bounced-as-stocks-commodities-and-reits-fell-last-week/" title="7:21 am" rel="bookmark"><time class="entry-date" datetime="2022-05-16T07:21:43-04:00">May 16, 2022</time></a>
</footer><!-- .entry-meta -->
<div class="entry-content">
<p>* NATO chief asserts that Ukraine can <a href="https://www.cnbc.com/2022/05/16/russia-ukraine-live-updates.html">emerge victorious</a> in the war<br/>* Global wheat prices <a href="https://www.bbc.com/news/business-61461093">increase</a> following India's export ban<br/>* Goldman Sachs economists <a href="https://finance.yahoo.com/news/goldman-sachs-economist-slowdown-consumer-spending-151957462.html">project a slowdown</a> in US consumer spending<br/>* China's retail sales and industrial production <a href="https://www.cnbc.com/2022/05/16/china-economy-covid-lockdowns-weigh-on-retail-industrial-production-data.html">fell</a> more than anticipated in April<br/>* Cryptocurrency prices exhibit <a href="https://www.wsj.com/articles/crypto-prices-move-in-tandem-with-traditional-markets-punishing-investors-11652655723?mod=hp_lead_pos3">minimal diversification benefits</a> compared to stocks and bonds<br/>* US consumer sentiment <a href="https://www.bloomberg.com/news/articles/2022-05-13/us-consumer-sentiment-falls-to-fresh-decade-low-on-inflation">declines</a> to an 11-year low in early May<br/>* Is the 2-year US Treasury yield, sensitive to policy changes, peaking?</p>
<footer class="entry-meta">
By James Picerno | <a href="https://www.capitalspectator.com/macro-briefing-16-may-2022/" title="6:20 am" rel="bookmark"><time class="entry-date" datetime="2022-05-16T06:20:35-04:00">May 16, 2022</time></a>
</footer><!-- .entry-meta -->
<div class="entry-content">
<p><a href="https://www.amazon.com/Dont-Trust-Your-Gut-Really/dp/0062880918?crid=1S4BGRLBLZTF9&keywords=Don%27t+Trust+Your+Gut%3A+Using+Data+to+Get+What+You+Really+Want+in+Life&qid=1652365116&s=books&sprefix=don%27t+trust+your+gut+using+data+to+get+what+you+really+want+in+life%2Cstripbooks%2C71&sr=1-1&linkCode=li3&tag=thecapitalspe-20&linkId=1268eebe06f3e8982f1f9d12483b3b3d&language=en_US&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&ASIN=0062880918&Format=_SL250_&ID=AsinImage&MarketPlace=US&ServiceVersion=20070822&WS=1&tag=thecapitalspe-20&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&language=en_US&l=li3&o=1&a=0062880918" alt="" width="1" height="1" border="0"/>● <a href="https://amzn.to/3L23YCM">Don’t Trust Your Gut: Using Data to Get What You Really Want in Life</a><br/>Seth Stephens-Davidowitz<br/><strong><a href="https://www.harpercollins.com/products/dont-trust-your-gut-seth-stephens-davidowitz?variant=39416225038370">Summary</a> via publisher (Dey Street/HarperCollins)</strong><br/>Making significant decisions can be challenging. We often turn to friends, family, or even the internet for advice, or we might read self-help books to guide our choices. Ultimately, many of us tend to rely on our instincts when making crucial life decisions, such as choosing a partner or a place to live. However, what if our instincts are misleading? Often biased and uninformed, our gut feelings may not be dependable. In "Don't Trust Your Gut," economist and former Google data scientist Seth Stephens-Davidowitz reveals the often surprising inaccuracies of our self-assessments regarding life improvements.</p>
<footer class="entry-meta">
By James Picerno | <a href="https://www.capitalspectator.com/book-bits-14-may-2022/" title="7:52 am" rel="bookmark"><time class="entry-date" datetime="2022-05-14T07:52:42-04:00">May 14, 2022</time></a>
</footer><!-- .entry-meta -->
<div class="entry-content">
The US stock market is currently facing a decline, which may signal a prolonged downturn. Regardless of future developments, it’s important to place this situation in historical context. Market corrections are not unfamiliar; recognizing this can help mitigate feelings of panic caused by recency bias.
<footer class="entry-meta">
By James Picerno | <a href="https://www.capitalspectator.com/managing-expectations-as-the-sp-500-tumbles/" title="7:35 am" rel="bookmark"><time class="entry-date" datetime="2022-05-13T07:35:55-04:00">May 13, 2022</time></a>
</footer><!-- .entry-meta -->
<div class="entry-content">
<p>* Russia <a href="https://www.cnbc.com/2022/05/12/russia-threatens-retaliatory-steps-if-finland-joins-nato.html">warns</a> of consequences if Finland joins NATO<br/>* Finland plans to align with NATO, while <a href="https://www.nytimes.com/2022/05/13/world/europe/sweden-finland-nato-putin.html">Sweden is considering following suit</a><br/>* Fed Chair Powell <a href="https://apnews.com/article/economy-inflation-jerome-powell-99491a939e1719044806c12d2c0b9119">states</a> that a soft landing for the economy may be out of the Fed's hands<br/>* Signs of a potential cool down are emerging in the US housing market <a href="https://fortune.com/2022/05/11/housing-market-home-prices-something-is-happening-mortgage-rates/">after a period of exuberance</a><br/>* Wholesale inflation <a href="https://www.cnbc.com/2022/05/12/wholesale-inflation-rose-11percent-in-april-as-producer-prices-keep-accelerating.html">continues to rise</a> in April<br/>* Oil giant Saudi Aramco <a href="https://www.ibtimes.com/apple-not-worlds-most-valuable-company-anymore-non-us-giant-takes-over-3503795">surpasses Apple</a> as the world's most valuable company<br/>* Exploring the potential scenarios for the next recession:<a href="https://www.cnn.com/2022/05/12/investing/recession-shapes-alphabet/index.html"> here are several possibilities:</a></p>
<footer class="entry-meta">
By James Picerno | <a href="https://www.capitalspectator.com/macro-briefing-13-may-2022/" title="6:05 am" rel="bookmark"><time class="entry-date" datetime="2022-05-13T06:05:55-04:00">May 13, 2022</time></a>
</footer><!-- .entry-meta -->
<div class="entry-content">
For the first time in 11 months, the US Treasury 10-year yield has surpassed the fair-value estimate on CapitalSpectator.com. While this does not guarantee that the yield will stop climbing, it provides a topic for discussion regarding the potential moderation, or even reversal, of this key rate’s upward trend in the near future.
<footer class="entry-meta">
By James Picerno | <a href="https://www.capitalspectator.com/10-year-treasury-yield-fair-value-estimate-12-may-2022/" title="7:19 am" rel="bookmark"><time class="entry-date" datetime="2022-05-12T07:19:31-04:00">May 12, 2022</time></a>
</footer><!-- .entry-meta -->
<div class="entry-content">
<p>* The Prime Minister and President of Finland <a href="https://www.cnn.com/2022/05/12/europe/finland-leaders-join-nato-intl/index.html">declare</a> their support for NATO membership<br/>* Will the drawn-out war in Ukraine and its economic implications <a href="https://www.nytimes.com/2022/05/11/world/europe/ukraine-russia-western-solidarity.html">test</a> Western unity?<br/>* China's economic deceleration is <a href="https://www.wsj.com/articles/chinas-economic-slowdown-is-rippling-all-around-the-world-11652347800?mod=hp_lead_pos6">affecting</a> global markets<br/>* China <a href="https://apnews.com/article/covid-health-xi-jinping-shanghai-06c212f9ab9f58fbeb5922ee0c00e83c">maintains</a> its costly ‘zero-Covid’ strategy despite economic repercussions<br/>* The UK economy <a href="https://www.theguardian.com/business/2022/may/12/uk-gdp-shrinks-in-march-as-consumers-cut-spending">contracts</a> in March as consumer expenditure diminishes<br/>* Bitcoin <a href="https://www.cnbc.com/2022/05/11/bitcoin-drops-below-30000-as-hot-inflation-report-causes-investors-to-shun-risky-assets.html">continues to decline</a>, falling below $27,000 in early Thursday trading<br/>* US annual consumer inflation <a href="https://www.cnn.com/2022/05/11/business/consumer-price-inflation-april/index.html">eases</a> in April but remains close to a 40-year high:</p>
<footer class="entry-meta">
By James Picerno | <a href="https://www.capitalspectator.com/macro-briefing-12-may-2022/" title="6:07 am" rel="bookmark"><time class="entry-date" datetime="2022-05-12T06:07:47-04:00">May 12, 2022</time></a>
</footer><!-- .entry-meta -->
<div class="entry-content">
<p>In recent updates to this series (see list below), I have explored various methodologies for identifying extreme values in a time series, such as the S&P 500 Index. This analysis aims to provide a clearer picture of potential trends by detecting outlier values that might indicate a higher risk of trend reversion. Let's introduce a new metric: identifying values that present the most significant deviation from the average over a specified trailing period.</p>
<footer class="entry-meta">
By James Picerno | <a href="https://www.capitalspectator.com/outlier-risk-part-v-largest-difference-from-average-value/" title="7:40 am" rel="bookmark"><time class="entry-date" datetime="2022-05-11T07:40:06-04:00">May 11, 2022</time></a>
</footer><!-- .entry-meta -->
As we navigate the uncertainty surrounding the global economy, it is essential to analyze these developments carefully. Understanding the trends and the underlying factors driving these changes can help us make informed decisions about our investments and strategies for the future.
<p>In closing, while many challenges lie ahead, there are also opportunities for growth and adjustment. With careful consideration and monitoring, we can better prepare ourselves for the evolving economic landscape.</p>
