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

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    <p>In this edition:</p>

    <ul>
        <li><em>The reflation trade keeps impacting Treasuries</em></li>
        <li><em>Can small-cap stocks maintain their advantage?</em></li>
        <li><em>Value stocks are making attempts at a resurgence</em></li>
    </ul>

    <p><em><a href="https://etfps.substack.com/p/the-etf-portfolio-strategist-3-march">Continue reading at The ETF Portfolio Strategist</a></em></p>
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    By James Picerno | <a href="https://www.capitalspectator.com/the-etf-portfolio-strategist-3-march-2021/" title="5:02 pm" rel="bookmark"><time class="entry-date" datetime="2021-03-03T17:02:00-05:00">March 3, 2021</time></a>
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    <p>A prominent Chinese financial official <a href="https://www.cnn.com/2021/03/02/investing/china-banking-financial-bubble-intl-hnk/index.html">has raised concerns.</a> In the United States, market commentators are <a href="https://www.politico.com/news/2021/03/01/bidens-market-bubbles-economic-risk-471835">expressing similar worries.</a> The key question now is: Who isn’t talking about market bubbles these days?</p>

    <p><a href="https://www.capitalspectator.com/everyones-talking-bubbles-is-it-time-to-act/#more-15629" 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/everyones-talking-bubbles-is-it-time-to-act/" title="7:30 am" rel="bookmark"><time class="entry-date" datetime="2021-03-03T07:30:57-05:00">March 3, 2021</time></a>
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    <p>* President Biden announces that the US will <a href="https://www.wsj.com/articles/biden-to-announce-merck-will-help-make-johnson-johnson-vaccine-11614693084?mod=hp_lead_pos1">offer</a> vaccines to all adults by the end of May.<br />* Rockets <a href="https://apnews.com/article/iraq-e292bdf181acf1a1c6f7b5a81de56d55">hit an airbase</a> in Iraq where US troops are stationed.<br />* The Governor of Texas <a href="https://www.cnn.com/2021/03/02/us/texas-governor-mask-mandate/index.html">lifts</a> the mask mandate and allows businesses to fully reopen.<br />* Health experts warn that lifting pandemic restrictions <a href="https://www.cnn.com/2021/03/03/health/us-coronavirus-wednesday/index.html">remains risky.</a><br />* In Myanmar, security forces <a href="https://www.reuters.com/business/media-telecom/myanmar-suppression-like-tiananmen-square-police-shoot-protesters-killing-least-2021-03-03/">shot</a> nine protesters.<br />* US GDP growth in Q1 is <a href="https://www.cnbc.com/2021/03/02/10percent-gdp-growth-the-us-economy-is-on-fire-and-is-about-to-get-stoked-even-more.html">expected</a> to accelerate.<br />* China's economic recovery <a href="https://www.markiteconomics.com/Public/Home/PressRelease/4a0277566f34405985ab2685bb569e29">slowed</a> to its lowest level in ten months as of February.<br />* The Eurozone economy <a href="https://www.markiteconomics.com/Public/Home/PressRelease/186fdd065de44c5a8e2966ec3c58cce0">continued</a> its contraction in February.<br />* The contraction in the UK's services sector <a href="https://www.markiteconomics.com/Public/Home/PressRelease/f78f79e7c2424067b2997623bc2e64ca">slowed</a> in February.<br />* The five-year Treasury inflation forecast has risen to 2.43%, the highest in ten years:</p>
    <p><a href=" http:="www.capitalspectator.com/wp-content/uploads/inf.exp_.2021-03-03.png"><img fetchpriority="high" decoding="async" class="alignnone size-full wp-image-15628" src="https://www.capitalspectator.com/wp-content/uploads/2021/03/inf.exp_.2021-03-03.png" alt="" width="650" height="450"  /></a></p>
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    By James Picerno | <a href="https://www.capitalspectator.com/macro-briefing-3-march-2021/" title="5:54 am" rel="bookmark"><time class="entry-date" datetime="2021-03-03T05:54:35-05:00">March 3, 2021</time></a>
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    <p>Last month, the anticipated risk premium for the Global Market Index (GMI) increased slightly, though it remains significantly lower than the historical performance of this benchmark. Nevertheless, GMI’s projected annualized return of 5.6% above the “risk-free” rate surpasses both the <a href="https://www.capitalspectator.com/risk-premia-forecasts-major-asset-classes-2-february-2021/">previous estimate</a> and the <a href="https://www.capitalspectator.com/risk-premia-forecasts-major-asset-classes-3-march-2020/">forecast from a year ago.</a></p>
    <p><a href="https://www.capitalspectator.com/risk-premia-forecasts-major-asset-classes-2-march-2021/#more-15621" 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/risk-premia-forecasts-major-asset-classes-2-march-2021/" title="6:34 am" rel="bookmark"><time class="entry-date" datetime="2021-03-02T06:34:03-05:00">March 2, 2021</time></a>
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    <p>* The CDC <a href="https://www.bbc.com/news/world-us-canada-56247656">cautions</a> of a “potential fourth surge of cases” in the US.<br />* Senator Elizabeth Warren <a href="https://www.cbsnews.com/news/elizabeth-warren-wealth-tax-ultra-millionaires-billionaires/">introduces</a> a proposal for a wealth tax on ‘ultra-millionaires’<br />* China <a href="https://www.cnbc.com/2021/03/02/china-bitcoin-mining-hub-to-shut-down-cryptocurrency-projects.html">shuts down</a> a significant bitcoin mining operation.<br />* German retail sales <a href="https://www.rte.ie/news/business/2021/0302/1200323-german-retail-sales/">declined</a> sharply in January due to pandemic-related lockdowns.<br />* US states experienced <a href="https://www.nytimes.com/2021/03/01/business/covid-state-tax-revenue.html?action=click&amp;module=Spotlight&amp;pgtype=Homepage">much less tax revenue</a> than anticipated as a result of the pandemic.<br />* Global manufacturing activity <a href="https://www.markiteconomics.com/Public/Home/PressRelease/12afc923ee85405b846252dd7b42c498">rose</a> to a three-year high in February.<br />* Wall Street is increasingly <a href="https://www.bloomberg.com/news/articles/2021-03-02/wall-street-bullishness-close-to-flashing-contrarian-sell-signal?srnd=premium">concerned</a> about high stock market optimism.<br />* Regional bank stocks are <a href="https://www.wsj.com/articles/regional-bank-stocks-rise-as-bond-yields-climb-11614681000?mod=hp_lead_pos2">benefiting</a> from increasing interest rates.<br />* US construction spending <a href="https://therealdeal.com/national/2021/03/01/construction-spending-hits-new-record-in-january/">rose</a> again in January, achieving another record high.<br />* US manufacturing output in February <a href="https://www.marketwatch.com/story/u-s-manufacturers-growing-at-fastest-pace-since-start-of-pandemic-ism-finds-11614611841">grew</a> at the fastest rate since the pandemic began:</p>
    <p><a href="https://www.capitalspectator.com/wp-content/uploads/2021/03/ism.02mar2021.png"><img decoding="async" class="alignnone size-full wp-image-15625" src="https://www.capitalspectator.com/wp-content/uploads/2021/03/ism.02mar2021.png" alt="" width="734" height="481"  /></a></p>
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    By James Picerno | <a href="https://www.capitalspectator.com/macro-briefing-2-march-2021/" title="6:05 am" rel="bookmark"><time class="entry-date" datetime="2021-03-02T06:05:00-05:00">March 2, 2021</time></a>
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    <p>Commodities spearheaded a rally in global risk assets this March, while bond markets struggled with rising interest rates. Overall, February presented a mixed performance across major asset classes, reflecting the trends seen in <a href="https://www.capitalspectator.com/major-asset-classes-january-2021-performance-review/">January's results.</a></p>
    <p><a href="https://www.capitalspectator.com/major-asset-classes-february-2021-performance-review/#more-15618" 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-february-2021-performance-review/" title="6:51 am" rel="bookmark"><time class="entry-date" datetime="2021-03-01T06:51:43-05:00">March 1, 2021</time></a>
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    <p>* Iran <a href="https://www.nytimes.com/2021/02/28/world/middleeast/iran-nuclear-talks-united-states.html">declines</a> to engage in US talks about reviving the nuclear deal.<br />* In Myanmar, security forces <a href="https://www.wsj.com/articles/myanmar-authorities-crack-down-in-bloodiest-day-of-protests-since-coup-11614521191?mod=hp_lead_pos6">killed</a> at least 18 protesters.<br />* The Johnson & Johnson vaccine was <a href="https://www.cnbc.com/2021/02/28/cdc-panel-recommends-use-of-jjs-single-shot-covid-vaccine.html">approved</a> by the CDC.<br />* Central banks are likely to <a href="https://www.reuters.com/article/us-global-economy-central-banks-analysis/analysis-central-banks-will-happily-ignore-inflation-mongers-idUSKCN2AT1KL">tolerate</a> increased inflation.<br />* The US bond market is reportedly “radically oversold,” advises an economist <a href="https://www.cnbc.com/2021/02/28/this-bond-market-is-so-radically-oversold-economist-david-rosenberg.html">predicting</a> a turnaround.<br />* China's factory growth <a href="https://www.reuters.com/article/us-china-economy-pmi/chinas-factory-activity-expands-at-a-slower-pace-in-february-misses-expectations-official-pmi-idUSKCN2AS05D?il=0">slowed</a> in February to its weakest pace since May.<br />* Chinese investment in Australia <a href="https://www.bbc.com/news/business-56234776">declined significantly</a> in 2020.<br />* Eurozone manufacturing activity <a href="https://www.markiteconomics.com/Public/Home/PressRelease/c944ac82aecd4152843f406b9b60e41c">expanded</a> at its fastest pace in three years during February.<br />* US consumer spending saw a rebound in January, <a href="https://www.reuters.com/article/usa-economy/wrapup-1-u-s-consumer-spending-rebounds-inflation-muted-idUSL1N2KW1HE">driven</a> by pandemic relief funds:</p>
    <p><a href="https://www.capitalspectator.com/wp-content/uploads/2021/03/pce.01mar2021.png"><img decoding="async" class="alignnone size-full wp-image-15617" src="https://www.capitalspectator.com/wp-content/uploads/2021/03/pce.01mar2021.png" alt="" width="650" height="450"  /></a></p>
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    By James Picerno | <a href="https://www.capitalspectator.com/macro-briefing-1-march-2021/" title="5:14 am" rel="bookmark"><time class="entry-date" datetime="2021-03-01T05:14:47-05:00">March 1, 2021</time></a>
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    <p>The Global Managed Drawdown (G.B16.MDD) has maintained a cautious approach recently, but the situation has finally shifted, yielding dividends last week. The pressing question now is whether this trend will continue.</p>

    <p><em><a href="https://etfps.substack.com/p/the-etf-portfolio-strategist-28-feb">Continue reading at The ETF Portfolio Strategist</a></em></p>
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    By James Picerno | <a href="https://www.capitalspectator.com/the-etf-portfolio-strategist-28-feb-2021/" title="4:48 pm" rel="bookmark"><time class="entry-date" datetime="2021-02-28T16:48:38-05:00">February 28, 2021</time></a>
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    <p>In this issue:</p>

    <ul>
        <li><em>Red ink is prevalent everywhere… except in the realm of broadly defined commodities</em></li>
        <li><em>Another week brings losses for our portfolio strategy benchmarks</em></li>
    </ul>

    <p><a href="https://etfps.substack.com/p/the-etf-portfolio-strategist-26-feb">Continue reading at The ETF Portfolio Strategist</a></p>
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    By James Picerno | <a href="https://www.capitalspectator.com/the-etf-portfolio-strategist-26-feb-2021/" title="6:43 pm" rel="bookmark"><time class="entry-date" datetime="2021-02-26T18:43:26-05:00">February 26, 2021</time></a>
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