Global stock markets experienced a decline on Monday due to inflation concerns and increasing interest rates: Reuters
What caused the significant drop in US stocks last Friday? Politico
Powell, who is set to be sworn in today as the new Fed chair, faces emerging economic challenges: AP
US employment surged by 200k in January, accompanied by an acceleration in wage growth: BI
The US Consumer Sentiment Index fell in January but remains near peak levels: CNBC
Factory orders increased for the fifth consecutive month in December: Reuters
Outgoing Fed chair Yellen indicates that stock and commercial real estate prices are high: Bloomberg
PMI report shows Eurozone economic growth approaching a 12-year peak in January: IHS Markit
The 10-year Treasury yield climbs to 2.84%, marking a four-year high: MarketWatch
How serious was last week’s downturn in US equities? It marked the largest weekly drop for the S&P 500 Index in over two years. However, this doesn’t convey the full story, especially considering how stable the upward trend in equity markets has been recently. The more surprising aspect is the length of time we’ve gone without a notable decline. Yet, it would be a mistake to trivialize this recent drop. A closer look indicates that the S&P’s slump of 3.9% over the five trading days leading to February 2 represents one of the steepest declines recorded in the last sixty years.
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By David Pilling
Review via Kirkus Reviews
“Growth for the sake of growth is the ideology of the cancer cell,” proclaimed environmentalist Edward Abbey. It seems that Financial Times associate editor Pilling would resonate with this sentiment, although he communicates it with more nuance in this analytical examination of economic growth and its measurements. “Economics,” he asserts, “can present a skewed perspective of reality.” This is especially true, given that gross domestic product (GDP) remains a central tenet of modern economics, encapsulating all activities in an economy. Yet, as the author highlights, GDP is morally neutral: it “appreciates pollution,” as expenditures are directed towards remediation, and “welcomes crime for its association with increased law enforcement and repair costs.” War or disaster? No cause for concern from a GDP standpoint. Pilling also explores alternative methods suggested by unconventional economists for evaluating economic health, taking into account the externalities linked to economic activities, such as various equations, happiness rankings, and the Genuine Progress Index, which stands out as a compelling “measure of economic welfare.”
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According to today’s report from the Labor Department, US companies added 196,000 jobs in January, exceeding the anticipated increase of 172,000 based on Econoday.com’s consensus forecast. This robust growth in the private sector isn’t surprising, considering the positive figures from the ADP Employment Report earlier this week. While today’s results indicate ongoing strength in the labor market, the annual trend suggests that job growth, though still solid, is gradually slowing down.
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Strategies based on momentum investing may be among the most dependable sources of alpha, yet, like all avenues for excess returns, this factor premium fluctuates over time. Thus, determining the right moment to exit or reduce exposure to these trades is as crucial as knowing when to enter.
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Analysts predict stronger job growth in today’s government report for December: Reuters
Republican intelligence memo ignites political controversy in Washington: The Hill
US jobless claims dropped to a low of 230,000 last week: MarketWatch
Job cuts in the US rose by 38% in January compared to December but are down 2.8% year-over-year: CG&C
Harsh winter weather impacted US car sales in January: USA Today
According to the ISM Manufacturing Index, US manufacturing growth in January remains above 2017 averages despite a slight slip: MarketWatch
US Manufacturing PMI in January indicates the strongest growth in three years: IHS Markit
Unexpected decline in US productivity at the end of 2017 during Q4: CFO
US workers identify healthcare as the most urgent national issue: EBRI
Emerging markets began 2018 on a strong note, showcasing the highest monthly gains among major asset classes. Overall, January saw most markets on the rise, with a few exceptions: US real estate trusts (REITs) faced the steepest losses, alongside modest declines in US investment-grade bonds and inflation-indexed Treasuries.
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The clash between Trump and the FBI escalates into an open conflict: WaPo
The White House proposes significant cuts to clean energy funding at the Energy Department: The Hill
Former Fed Chair Greenspan warns of bubbles in both stocks and bonds: Bloomberg
The Fed maintains rates, anticipating higher inflation in 2018: Reuters
ADP reports US private payrolls increased by 234k in December, exceeding projections: CNBC
Pending home sales rose by 0.5%, the highest increase since March: MarketWatch
Chicago PMI declines in January, retracting from a nine-year peak: MarketWatch
The US Employment Cost Index shows a solid rise in Q4 of 2017: Reuters
The two-year Treasury yield’s bullish run continues, reaching 2.14%, a new 10-year high:
Corporate payrolls experienced a significant increase of 234,000 in January, as revealed by the ADP Employment Report released this morning. Although this figure is slightly below December’s total of 242,000, both statistics indicate a robust rate of labor market expansion. If today’s numbers are accurate, they suggest a stronger-than-expected performance in Friday’s official employment report anticipated from the Labor Department. The puzzlement lies in why governmental data has consistently lagged behind ADP’s estimates, creating a wider than usual gap. Will the forthcoming report from Washington help close this gap? Or has ADP been overestimating the remarkable job growth in the economy?
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Focus Economics, a consultancy that specializes in analyzing and synthesizing forecasts from various sources, recently unveiled its annual list of “top blogs” in economics and finance for 2018, and The Capital Spectator made the cut. This recognition is a notable achievement, especially amidst a distinguished lineup of 101 sites that we are now alongside. Happy reading!
