By Bina Venkataraman
Review via The New York Times
In her insightful book, “The Optimist’s Telescope,” Bina Venkataraman, a former climate adviser in the Obama administration, skillfully explores how to manage the pitfalls of our often shortsighted nature. Utilizing her storytelling prowess and a solid grasp of scientific principles, she delves into the core issue of how we can better anticipate the future. The metaphorical telescope in her title signifies economist A.C. Pigou’s 1920 observation regarding our flawed ability to foresee potential outcomes. As Venkataraman eloquently points out, “The future is an idea we have to conjure in our minds, not something that we perceive with our senses. What we crave today is something we can feel viscerally.”
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Currently, investors on the hunt for yields are facing a challenging landscape. With interest rates plummeting and even dipping into negative territory, finding a satisfactory return has become increasingly daunting. Historically, US Treasuries have served as the benchmark for evaluating yields, but their current offerings are alarmingly low. So, what options do investors have? A promising approach involves exploring the diversification potential that comes with a broad, multi-asset class portfolio reminiscent of the major asset classes.
Hurricane Dorian intensifies as it approaches the US: CNN
China appears to be biding its time in the trade war and focusing on bolstering its own economy: CNBC
July retail sales in Germany fell more than anticipated: Reuters
Japan’s mixed July data reveals a slowdown in retail sales alongside a boost in industrial output: Reuters
Pending home sales in the US dropped significantly in July: LA Times
US jobless claims maintain a strong labor market outlook: MW
The US trade deficit narrowed in July as exports increased: MW
Revised Q2 GDP growth for the US is slightly down to +2.0%: CNBC
The US Dollar Index reached a 2-year high on Thursday:
Interestingly, the phenomenon of negative interest rates has already made its way to select bond markets in the US, despite the broader resistance to negative yields. Current “real” yields for inflation-indexed Treasuries for 7- and 10-year maturities have recently dipped below zero. While this is not the first instance of negative rates in the TIPS market, the current economic climate raises an urgent question: Are we witnessing a trend that might extend to US yields in general?
Hurricane Dorian is forecasted to hit Florida this weekend: CNN
China indicates it will not immediately respond to the latest US tariffs: Bloomberg
China has sent additional troops to Hong Kong amid ongoing protests: CNBC
Global bond yields are flirting with historical lows: Reuters
The Democratic presidential field continues to shrink as candidates depart: NBC
The US has executed a cyberattack on Iran to prevent further threats to oil tankers: NY Times
Unemployment in Germany has risen for the fourth consecutive month: Bloomberg
The 30-year Treasury yield remains below 2.0% for the second day:
The ongoing US-China trade war is adversely affecting investor confidence, yet the most significant impact on global stock markets has largely occurred outside the US. This conclusion is drawn from year-to-date performance data of several exchange-traded products that represent key economic regions worldwide.
Puerto Rico and the Dominican Republic prepare for tropical storm Dorian: CBS
The UK Prime Minister seeks to suspend Parliament ahead of Brexit: Bloomberg
A former NY Fed president suggests the Fed consider political factors in its policy decisions: CNBC
The Fed rejects the notion of politicizing its decisions: WSJ
Bank lending in the eurozone saw an uptick in July: Reuters
Consumer confidence in the US economy remains strong in August: MW
US home price increases have slowed to their lowest in seven years as of June: HousingWire
Manufacturing activity in the Mid-Atlantic region improved in August: Richmond Fed
The dividend yield of the S&P 500 has surpassed the 30-year Treasury rate for the first time in a decade: CNBC
The uncertainty surrounding the US-China trade war continues to disrupt financial markets and dampen business confidence. Nevertheless, forecasts for the upcoming third-quarter US GDP report indicate a trajectory of moderate growth, as illustrated by recent nowcasting models. Although the erratic trade negotiations helmed by President Trump are adding complications, many reliable analytics remain cautiously optimistic.
Trump’s comments on trade during G7 create further uncertainty: NY Times
Is a US-China trade agreement on the horizon? Don’t bet on it: Bloomberg
Johnson & Johnson faces a landmark ruling in the opioid crisis: CNBC
A bond market rally leaves active managers lagging: Reuters
GDPNow model projects a slight increase in Q3 growth to +2.3%: Atlanta Fed
Concerns arise over a potential ransomware attack targeting the 2020 election: Reuters
Durable goods orders in the US increased by 2.1% in July: MW
Manufacturing output in Texas shows accelerated growth in August: Dallas Fed
Trends in US economic data strengthened in July: Chicago Fed
The risks associated with the trade war resurfaced on Friday, negatively impacting global equity markets. However, foreign junk bonds experienced a sharp rally, achieving the strongest gains among the major asset classes tracked through various exchange-traded funds.
The various articles present a multifaceted overview of current economic conditions, emphasizing topics ranging from investment strategies to the challenges posed by global events. By examining these pieces, readers gain insight into the ongoing developments that shape our financial landscape. Staying informed is essential as these factors continue to evolve.
