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

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    <p>* Janet Yellen <a href="https://www.politico.com/news/2021/01/25/senate-confirms-janet-yellen-treasury-462390">was confirmed</a> by the Senate as Treasury Secretary.<br />* The House formally <a href="https://www.reuters.com/article/us-usa-trump-impeachment/house-democrats-deliver-trump-impeachment-charge-to-senate-idUSKBN29U13G">delivered</a> the impeachment charge against Trump to the Senate.<br />* Biden is set to <a href="https://www.nytimes.com/2021/01/25/climate/biden-climate-change.html?action=click&amp;module=Top%20Stories&amp;pgtype=Homepage">announce</a> a ban on new oil and gas drilling on federal lands.<br />* Minnesota <a href="https://www.cnbc.com/2021/01/25/minnesota-confirms-first-known-us-case-of-more-contagious-covid-variant-originally-found-in-brazil.html">confirmed</a> its first case of a more transmissible variant of the coronavirus, initially identified in Brazil.<br />* Xi’s remarks at the World Economic Forum <a href="https://www.cnbc.com/2021/01/26/xis-speech-shows-how-biden-faces-a-very-different-china.html">underscore</a> the challenges in US-China relationships.<br />* China <a href="https://www.reuters.com/article/us-southchinasea-china-drills/china-to-conduct-military-drills-in-south-china-sea-amid-tensions-with-u-s-idUSKBN29V0E0">announced</a> that it will conduct military exercises in the South China Sea this week.<br />* Biden faces a <a href="https://apnews.com/article/joe-biden-donald-trump-business-diplomacy-moscow-ddd710fa6886f3888c412579d14b2ca9">delicate balancing act</a> in his first call with Russia's President Putin.<br />* Wall Street <a href="https://www.politico.com/news/2021/01/26/wall-street-national-debt-462453">is not concerned</a> about the current increase in federal debt—at least for now.<br />* Research indicates that market fluctuations in 2020 posed no significant risk to index funds, as noted in a <a href="https://www.institutionalinvestor.com/article/b1q8qzj06khp7c/Active-Managers-Kept-Losing-Out-to-Passive-Even-After-Markets-Crashed">study</a>.<br />* Will Fed Chairman Powell <a href="https://www.bloomberg.com/news/articles/2021-01-26/powell-with-year-to-run-at-fed-aims-to-avoid-past-qe-mistake?srnd=premium">steer clear</a> of previous QE pitfalls during the final year of his term?<br />* The trend in US economic growth <a href="https://www.chicagofed.org/publications/cfnai/index">showed slight improvement in December:</a></p>
    <p><a href="https://www.capitalspectator.com/wp-content/uploads/2021/01/chicagofed.26jan2021.png"><img fetchpriority="high" decoding="async" class="alignnone size-full wp-image-15432" src="https://www.capitalspectator.com/wp-content/uploads/2021/01/chicagofed.26jan2021.png" alt="" width="672" height="480"   /></a></p>
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    By James Picerno | <a href="https://www.capitalspectator.com/macro-briefing-26-january-2021/" title="5:52 am" rel="bookmark"><time class="entry-date" datetime="2021-01-26T05:52:13-05:00">January 26, 2021</time></a>
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    <p>Emerging market shares spearheaded a broad global market rally last week, according to exchange-traded funds tracking the <a href="https://www.capitalspectator.com/risk-premia-forecasts-major-asset-classes-5-january-2021/">primary asset classes</a> up to Friday's close (January 22). The losses for the week were primarily in foreign bonds and commodities.</p>

    <p> <a href="https://www.capitalspectator.com/emerging-markets-stocks-topped-last-weeks-rally-in-risk-assets/#more-15425" 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-topped-last-weeks-rally-in-risk-assets/" title="7:06 am" rel="bookmark"><time class="entry-date" datetime="2021-01-25T07:06:11-05:00">January 25, 2021</time></a>
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    <p>* The House <a href="https://apnews.com/article/capitol-siege-donald-trump-trials-impeachments-trump-impeachment-f4b8bf18ce0e23b877ba945545c3e257">is preparing</a> to forward the impeachment charge against Trump to the Senate.<br />* Biden will <a href="https://www.cnbc.com/2021/01/24/biden-to-sign-south-africa-travel-ban-to-slow-spread-of-new-covid-19-strain-.html">implement</a> new international travel restrictions to contain new COVID variants.<br />* China has <a href="https://www.cnn.com/2021/01/25/asia/china-us-taiwan-military-moves-intl-hnk-mil/index.html">deployed</a> warplanes near Taiwan, escalating tensions over the weekend.<br />* In 2020, China <a href="https://www.wsj.com/articles/china-overtakes-u-s-as-worlds-leading-destination-for-foreign-direct-investment-11611511200?mod=hp_lead_pos2">surpassed</a> the US as the top destination for new foreign direct investment.<br />* Widespread protests in Russia, reportedly supported by Western nations, have <a href="https://www.bbc.com/news/world-europe-55790699">drawn the ire</a> of Moscow.<br />* Mexico's President has <a href="https://www.nytimes.com/2021/01/24/world/mexico-president-amlo-coronavirus-covid.html">contracted the coronavirus</a> and is experiencing mild symptoms.<br />* Business sentiment in Germany <a href="https://www.bloomberg.com/news/articles/2021-01-25/german-business-mood-darkens-as-virus-lockdowns-delay-recovery?srnd=premium">is tapering</a> after a rebound in 2020 due to COVID-19 lockdowns.<br />* The US Composite PMI (a GDP indicator) shows <a href="https://www.markiteconomics.com/Public/Home/PressRelease/8112980330a9491c954c4ee22b2db430">solid</a> growth in January:</p>
    <p><a href="https://www.capitalspectator.com/wp-content/uploads/2021/01/pmi.25jan2021.png"><img decoding="async" class="alignnone size-full wp-image-15424" src="https://www.capitalspectator.com/wp-content/uploads/2021/01/pmi.25jan2021.png" alt="" width="625" height="518"   /></a></p>
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    By James Picerno | <a href="https://www.capitalspectator.com/macro-briefing-25-january-2021/" title="5:28 am" rel="bookmark"><time class="entry-date" datetime="2021-01-25T05:28:40-05:00">January 25, 2021</time></a>
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    <p>In this issue:</p>

    <ul>
        <li><em>Global stock markets rebound, led by shares outside Japan</em></li>
        <li><em>Portfolio strategy benchmarks experience a rally</em></li>
        <li><em>Managed risk strategies continue to struggle</em></li>
    </ul>

    <p><strong>The bull market resumes:</strong> Global equity markets finished the week on an upswing. The prior week's downturn sparked renewed concerns, but such sentiment can shift dramatically in a short period. For now, the bullish trend remains intact in the post-coronavirus recovery.</p>

    <p><a href="https://etfps.substack.com/p/the-etf-portfolio-strategist-22-jan"><em>continue reading at The ETF Portfolio Strategist</em></a></p>
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    By James Picerno | <a href="https://www.capitalspectator.com/the-etf-portfolio-strategist-22-jan-2021/" title="8:48 pm" rel="bookmark"><time class="entry-date" datetime="2021-01-22T20:48:38-05:00">January 22, 2021</time></a>
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    <p>Investor sentiment can be quite fickle, yet its insights are invaluable if accurate data is available. Understanding whether the market is under the influence of extreme optimism or pervasive pessimism is particularly enlightening. Market extremes can significantly enhance predictions regarding potential returns and associated risks; however, the challenge lies in obtaining reliable data.</p>

    <p> <a href="https://www.capitalspectator.com/estimating-market-sentiment-with-market-prices/#more-15418" 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/estimating-market-sentiment-with-market-prices/" title="7:38 am" rel="bookmark"><time class="entry-date" datetime="2021-01-22T07:38:17-05:00">January 22, 2021</time></a>
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    <p>* Biden is set to <a href="https://www.cnbc.com/2021/01/22/covid-stimulus-update-biden-to-sign-executive-orders-on-hunger-workers-rights.html">sign executive orders</a> today offering Covid-19 relief to workers.<br />* Senate Republicans <a href="https://www.politico.com/news/2021/01/21/biden-coronavirus-stimulus-plan-461216">are against</a> Biden’s proposed coronavirus relief package.<br />* Economic activity in the Eurozone <a href="https://www.markiteconomics.com/Public/Home/PressRelease/2845534afc634251aaaf93f3acfd1a7e">contracted</a> for the third consecutive month in January, according to PMI survey data.<br />* The UK economy <a href="https://www.markiteconomics.com/Public/Home/PressRelease/d087a38a6ed845f6b4cf73967c960cbf">declined</a> in January, marking the biggest drop in eight months per PMI data.<br />* UK retail sales saw a <a href="https://www.bbc.com/news/business-55762644">historic decline</a> throughout 2020.<br />* Japan's economic activity continues to fall in January, as reported by <a href="https://www.markiteconomics.com/Public/Home/PressRelease/abc307a6d9444e1891ef38fd50617f10">PMI survey findings</a>.<br />* US jobless claims <a href="https://www.cnbc.com/2021/01/21/weekly-jobless-claims.html">are rising</a> alarmingly, with an increase of 900,000 last week.<br />* Manufacturing activities in the Mid-Atlantic region <a href="https://www.marketwatch.com/story/factory-activity-surges-in-mid-atlantic-region-in-january-11611237049">surged</a> in January, as indicated by the Philly Fed Manufacturing Index.<br />* US housing starts <a href="https://www.bloomberg.com/news/articles/2021-01-21/u-s-housing-starts-rose-to-fastest-pace-since-2006-in-december">rose</a> to a 15-year high in December:</p>
    <p><a href="https://www.capitalspectator.com/wp-content/uploads/2021/01/starts.22jan2021.png"><img loading="lazy" decoding="async" class="alignnone size-full wp-image-15417" src="https://www.capitalspectator.com/wp-content/uploads/2021/01/starts.22jan2021.png" alt="" width="1200" height="675"   /></a></p>
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    By James Picerno | <a href="https://www.capitalspectator.com/macro-briefing-22-january-2021/" title="5:48 am" rel="bookmark"><time class="entry-date" datetime="2021-01-22T05:48:05-05:00">January 22, 2021</time></a>
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    <p>Though it's still early in the year, the initial data for 2021 appears promising for equity markets in Asia (excluding Japan), based on a range of exchange-traded funds representing the major global equity markets as of January 20.</p>

    <p> <a href="https://www.capitalspectator.com/asia-ex-japan-stocks-are-surging-in-2021s-kickoff/#more-15410" 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/asia-ex-japan-stocks-are-surging-in-2021s-kickoff/" title="7:22 am" rel="bookmark"><time class="entry-date" datetime="2021-01-21T07:22:13-05:00">January 21, 2021</time></a>
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    <p>* President Biden <a href="https://www.nytimes.com/2021/01/20/us/biden-executive-orders.html">signed</a> 17 executive orders on Wednesday, reversing several policies from the Trump administration.<br />* Biden will <a href="https://www.cnbc.com/2021/01/21/biden-to-sign-10-executive-orders-to-combat-covid-pandemic-invoke-defense-production-act.html">sign 10 additional executive orders</a> today, including measures for a new Covid-19 strategy.<br />* Biden’s broader policy goals <a href="https://www.wsj.com/articles/bidens-agenda-depends-on-success-in-curbing-covid-19-pandemic-11611223201">rely</a> on effective management of the COVID-19 pandemic.<br />* The President faces significant <a href="https://www.nytimes.com/2021/01/19/business/biden-economy-pandemic.html">economic challenges</a> in the coming months.<br />* US homebuilder confidence <a href="https://www.reuters.com/article/usa-econonomy-housing/us-homebuilders-confidence-slips-in-january-idUSL1N2JV19T">declined in January</a> but remains optimistic overall.<br />* The stock market (S&amp;P 500) reached a record high on Biden’s first day in office:</p>
    <p><a href="https://www.capitalspectator.com/wp-content/uploads/2021/01/sp500.21feb2021.png"><img loading="lazy" decoding="async" class="alignnone size-full wp-image-15404" src="https://www.capitalspectator.com/wp-content/uploads/2021/01/sp500.21feb2021.png" alt="" width="700" height="312"   /></a></p>
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    By James Picerno | <a href="https://www.capitalspectator.com/macro-briefing-21-january-2021/" title="5:53 am" rel="bookmark"><time class="entry-date" datetime="2021-01-21T05:53:43-05:00">January 21, 2021</time></a>
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    <p>Today marks the end of the 45th president’s term, closing a chapter filled with volatility in American history. As the nation transitions into the Biden administration, it is important to briefly review market performance throughout Trump's presidency, utilizing a selection of exchange-traded funds.<br /><a href="https://www.capitalspectator.com/recapping-the-trump-years-through-a-markets-lens/#more-15395" 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/recapping-the-trump-years-through-a-markets-lens/" title="7:11 am" rel="bookmark"><time class="entry-date" datetime="2021-01-20T07:11:00-05:00">January 20, 2021</time></a>
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