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

<div class="entry-content">
    <p><span style="color: #0000ff;">Global reactions intensify following the US announcement regarding Jerusalem: </span><a href="http://www.bbc.com/news/world-middle-east-42261000">BBC</a><br/><span style="color: #0000ff;">Hamas calls for renewed uprising against Israel:</span> <a href="https://www.bloomberg.com/news/articles/2017-12-07/hamas-leader-urges-new-intifida-against-israel-over-jerusalem">Bloomberg</a><br/><span style="color: #0000ff;">US troop presence in Syria increases to 2000:</span> <a href="https://www.nytimes.com/2017/12/06/world/middleeast/us-troops-syria.html?rref=collection%2Fsectioncollection%2Fworld&amp;action=click&amp;contentCollection=world&amp;region=rank&amp;module=package&amp;version=highlights&amp;contentPlacement=12&amp;pgtype=sectionfront">NY Times</a><br/><span style="color: #0000ff;">Concerns rise over potential US government shutdown:</span> <a href="https://www.reuters.com/article/us-usa-congress-shutdown/trump-warns-of-government-shutdown-threat-ahead-of-meeting-with-lawmakers-idUSKBN1E02P1">Reuters</a><br/><span style="color: #0000ff;">ADP reports a robust increase of 190k private sector jobs in November:</span> <a href="https://www.cnbc.com/2017/12/06/private-payrolls-grow-by-190k-vs-185k-est-adp.html">CNBC</a><br/><span style="color: #0000ff;">Revised Q3 data indicates strong productivity growth in the US economy:</span> <a href="http://www.rttnews.com/2842361/u-s-labor-productivity-growth-unrevised-at-3-0-in-q3.aspx?type=useco">RTT</a><br/><span style="color: #0000ff;">Bitcoin surges past $14k, with a market cap surpassing most S&amp;P stocks:</span> <a href="https://www.marketwatch.com/story/bitcoin-hitting-new-records-tops-200-billion-in-market-capitalization-2017-12-05">MarketWatch</a><br/><span style="color: #0000ff;">US sector correlation approaching record lows:</span> <a href="http://www.businessinsider.com/stock-market-news-record-low-sector-correlation-2017-12">Business Insider</a></p>
    <p><a href="https://www.capitalspectator.com/wp-content/uploads/2017/12/sector.corr_.07dec2017.png"><img fetchpriority="high" decoding="async" class="alignnone size-full wp-image-9613" src="https://www.capitalspectator.com/wp-content/uploads/2017/12/sector.corr_.07dec2017.png" alt="" width="1201" height="900"  /></a></p>
</div><!-- .entry-content -->

<footer class="entry-meta">
    By James Picerno | <a href="https://www.capitalspectator.com/macro-briefing-7-december-2017/" title="5:05 am" rel="bookmark"><time class="entry-date" datetime="2017-12-07T05:05:00-05:00">December 7, 2017</time></a>
</footer><!-- .entry-meta -->

<div class="entry-content">
    <p>In recent years, momentum investing—essentially, betting on the continuation of price trends in the short to medium term—has garnered significant attention. For instance, the growth of ETF assets in this area has been remarkable. The first momentum fund was launched just over five years ago, and today there are numerous momentum ETFs managing almost $15 billion in assets, <a href="http://etfdb.com/type/investment-style/high-momentum/">according to etfdb.com.</a> Although this represents a smaller slice of the overall ETF market, the strategy's appeal suggests that growth will likely continue for years to come. What can investors expect moving forward? Does heightened interest in momentum investment raise any concerns about anticipated returns? To gain insight, The Capital Spectator consulted Wesley Gray at <a href="https://alphaarchitect.com/">Alpha Architect</a>, a wealth management firm located near Philadelphia. Gray, who previously taught finance, is well-equipped to discuss momentum investing. In addition to managing various momentum-based portfolios for clients, he and his team have extensively covered this strategy on their popular investing blog, AlphaArchitect.com. Gray is also a co-author of <a href="https://www.amazon.com/gp/product/111923719X/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=9325&amp;creativeASIN=111923719X&amp;linkCode=as2&amp;tag=thecapitalspe-20&amp;linkId=b41fe6753d1bef5ef1298c4343aa335a" target="_blank" rel="noopener">Quantitative Momentum: A Practitioner’s Guide to Building a Momentum-Based Stock Selection System</a><img decoding="async" style="border: none !important; margin: 0px !important;" src="https://ir-na.amazon-adsystem.com/e/ir?t=thecapitalspe-20&amp;l=am2&amp;o=1&amp;a=111923719X" alt="" width="1" height="1" border="0"/><br/><a href="https://www.capitalspectator.com/5-questions-for-wesley-gray-alphaarchitect-com/#more-9611" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
</div><!-- .entry-content -->

<footer class="entry-meta">
    By James Picerno | <a href="https://www.capitalspectator.com/5-questions-for-wesley-gray-alphaarchitect-com/" title="6:56 am" rel="bookmark"><time class="entry-date" datetime="2017-12-06T06:56:02-05:00">December 6, 2017</time></a>
</footer><!-- .entry-meta -->

<div class="entry-content">
    <p><span style="color: #0000ff;">Trump likely to formally recognize Jerusalem as Israel's capital:</span> <a href="https://www.politico.com/story/2017/12/05/us-embassy-jerusalem-israel-trump-foreign-leaders-280988">Politico</a><br/><span style="color: #0000ff;">Israel braces for potential violence leading up to Trump's Jerusalem announcement:</span> <a href="https://www.haaretz.com/israel-news/.premium-1.827070">Haaretz</a><br/><span style="color: #0000ff;">Palestinian representative claims US recognition of Jerusalem is a ‘declaration of war’:</span> <a href="http://www.jpost.com/Arab-Israeli-Conflict/Palestinian-envoy-says-US-recognition-of-Jerusalem-is-declaring-war-517159">Jerusalem Post</a><br/><span style="color: #0000ff;">US trade deficit widened in October, reaching its highest level since January:</span> <a href="https://www.usatoday.com/story/money/economy/2017/12/05/u-s-trade-deficit-october-rises-48-7-billion-record-imports/922581001/">USA Today</a><br/><span style="color: #0000ff;">Global growth remains steady at a two-and-a-half-year peak in November:</span> <a href="https://www.markiteconomics.com/Survey/PressRelease.mvc/528ae6f8aabe4854a78e3841207cbd21">IHS Markit</a><br/><span style="color: #0000ff;">US ISM Non-Manufacturing Index experiences a modest decline in November following a robust October:</span> <a href="https://www.cnbc.com/2017/12/05/november-ism-non-manufacturing-index.html">CNBC</a><br/><span style="color: #0000ff;">US Services PMI indicates softer sector growth in November:</span> <a href="https://www.markiteconomics.com/Survey/PressRelease.mvc/783be4bd1e5e45feaaa841d00b8c51ea">IHS Markit</a><br/><span style="color: #0000ff;">Commercial real estate benefits significantly from the GOP tax reform:</span> <a href="https://www.nytimes.com/2017/12/05/business/economy/tax-bill-real-estate.html?rref=collection%2Fsectioncollection%2Fbusiness&amp;action=click&amp;contentCollection=business&amp;region=rank&amp;module=package&amp;version=highlights&amp;contentPlacement=1&amp;pgtype=sectionfront">NY Times</a><br/><span style="color: #0000ff;">The spread between 10-year and 2-year Treasury yields declined again on Tuesday, reaching a new decade low of 53 basis points:</span></p>
    <p><a href="https://www.capitalspectator.com/wp-content/uploads/2017/12/spread.06dec2017.png"><img decoding="async" class="alignnone size-full wp-image-9610" src="https://www.capitalspectator.com/wp-content/uploads/2017/12/spread.06dec2017.png" alt="" width="700" height="312"  /></a></p>
</div><!-- .entry-content -->

<footer class="entry-meta">
    By James Picerno | <a href="https://www.capitalspectator.com/macro-briefing-6-december-2017/" title="5:14 am" rel="bookmark"><time class="entry-date" datetime="2017-12-06T05:14:34-05:00">December 6, 2017</time></a>
</footer><!-- .entry-meta -->

<div class="entry-content">
    <p>The difference between the 10-year and the 2-year Treasury yields fell to 57 basis points on December 4, as per Treasury.gov's daily records. This marks yet another post-recession low for this key indicator. The flattening yield curve suggests that the economy faces stronger challenges based on the historical correlation of this spread with the US business cycle. However, the current macroeconomic trend appears solid, indicating that the 10-year/2-year yield gap has temporarily lost its effectiveness as an early indicator of US recession risks.<br/><a href="https://www.capitalspectator.com/treasury-10yr-2yr-yield-spread-continues-to-slide/#more-9605" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
</div><!-- .entry-content -->

<footer class="entry-meta">
    By James Picerno | <a href="https://www.capitalspectator.com/treasury-10yr-2yr-yield-spread-continues-to-slide/" title="7:14 am" rel="bookmark"><time class="entry-date" datetime="2017-12-05T07:14:28-05:00">December 5, 2017</time></a>
</footer><!-- .entry-meta -->

<div class="entry-content">
    <p><span style="color: #0000ff;">Supreme Court approves Trump’s travel ban:</span> <a href="https://www.nytimes.com/2017/12/04/us/politics/trump-travel-ban-supreme-court.html">NY Times</a><br/><span style="color: #0000ff;">The assassination of Yemen’s former president will have repercussions in the country’s civil war:</span> <a href="https://www.theguardian.com/world/2017/dec/05/ali-abdullah-saleh-killing-changes-dynamics-yemen-civil-war">Guardian</a><br/><span style="color: #0000ff;">Brexit negotiations come to a standstill over disputes regarding the Irish border:</span> <a href="https://www.reuters.com/article/us-britain-eu/irish-border-row-thwarts-may-bid-to-clinch-brexit-trade-deal-idUSKBN1DY17G">Reuters</a><br/><span style="color: #0000ff;">SEC’s new cyber unit intervenes to stop an initial coin offering scam:</span> <a href="http://www.rttnews.com/2841510/sec-says-new-cyber-unit-halts-ico-scam.aspx?type=corp">RTT</a><br/><span style="color: #0000ff;">Factory orders decreased by 0.1% in October; however, business spending remains strong:</span> <a href="https://www.reuters.com/article/us-usa-economy-factory/u-s-factory-orders-slip-business-spending-robust-idUSKBN1DY1VT">Reuters</a><br/><span style="color: #0000ff;">Eurozone economic growth shows significant improvement in November, according to PMI data:</span> <a href="https://www.markiteconomics.com/Survey/PressRelease.mvc/1899083557dc437fb62c601d276b8490">IHS Markit</a><br/><span style="color: #0000ff;">The average retirement savings account at Fidelity reaches an all-time high:</span> <a href="https://www.bloomberg.com/news/articles/2017-12-04/americans-nest-eggs-have-never-been-bigger-as-u-s-stocks-climb">Bloomberg</a></p>
    <p><a href="https://www.capitalspectator.com/wp-content/uploads/2017/12/fidelity.05dec2017.png"><img loading="lazy" decoding="async" class="alignnone size-full wp-image-9604" src="https://www.capitalspectator.com/wp-content/uploads/2017/12/fidelity.05dec2017.png" alt="" width="1200" height="632"  /></a></p>
</div><!-- .entry-content -->

<footer class="entry-meta">
    By James Picerno | <a href="https://www.capitalspectator.com/macro-briefing-5-december-2017/" title="5:27 am" rel="bookmark"><time class="entry-date" datetime="2017-12-05T05:27:58-05:00">December 5, 2017</time></a>
</footer><!-- .entry-meta -->

<div class="entry-content">
    <p>Last week, selling activity dominated trading across the <a href="https://www.capitalspectator.com/major-asset-classes-november-2017-performance-review/">major asset classes</a>, as indicated by a selection of exchange-traded products. The notable exception was US equities, which experienced a notable gain.<br/><a href="https://www.capitalspectator.com/us-stocks-bucked-the-trend-with-another-solid-gain-last-week/#more-9598" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
</div><!-- .entry-content -->

<footer class="entry-meta">
    By James Picerno | <a href="https://www.capitalspectator.com/us-stocks-bucked-the-trend-with-another-solid-gain-last-week/" title="6:31 am" rel="bookmark"><time class="entry-date" datetime="2017-12-04T06:31:47-05:00">December 4, 2017</time></a>
</footer><!-- .entry-meta -->

<div class="entry-content">
    <p><span style="color: #0000ff;">North Korea escalates tensions as US-South Korea military exercises commence:</span> <a href="http://www.cnn.com/2017/12/03/asia/north-korean-us-tensions-wargames-intl/index.html">CNN</a><br/><span style="color: #0000ff;">Congress faces a challenging path to avert a government shutdown:</span> <a href="https://www.nytimes.com/2017/12/03/us/politics/government-shutdown-republicans-congress-spending.html">NY Times</a><br/><span style="color: #0000ff;">CVS acquires Aetna in a deal that could reshape the healthcare landscape:</span> <a href="https://www.usatoday.com/story/money/2017/12/03/cvs-buying-aetna-deal-valued-69-billion-reports/917685001/">USA Today</a><br/><span style="color: #0000ff;">BIS calls for major central banks to address “frothy” market conditions via policy adjustments:</span> <a href="https://www.cnbc.com/2017/12/04/bis-major-central-banks-must-address-frothy-financial-markets.html"> CNBC</a><br/><span style="color: #0000ff;">ISM Manufacturing Index for the US dips in November but still reflects strong growth:</span> <a href="https://www.usatoday.com/story/money/business/2017/12/01/ism-manufacturing-index-contracts-slightly/914622001/">USA Today</a><br/><span style="color: #0000ff;">US construction spending surged in October, driven largely by government expenditure:</span> <a href="https://www.reuters.com/article/us-usa-economy-construction/u-s-construction-spending-rises-at-fastest-clip-in-five-months-idUSKBN1DV54U?il=0">Reuters</a><br/><span style="color: #0000ff;">PMI survey data indicates slower yet “robust” US manufacturing growth in November:</span> <a href="https://www.markiteconomics.com/Survey/PressRelease.mvc/9f58c0e52e65422c9ab9a71b22d96d20">IHS Markit</a><br/><span style="color: #0000ff;">Global manufacturing PMI data rises to an 80-month high in November:</span> <a href="https://www.markiteconomics.com/Survey/PressRelease.mvc/d08ae544b3af4eadb78fdcf60bb527f1">IHS Markit</a></p>
    <p><a href="https://www.capitalspectator.com/wp-content/uploads/2017/12/global.mfg_.pmi_.04dec2017.png"><img loading="lazy" decoding="async" class="alignnone size-full wp-image-9597" src="https://www.capitalspectator.com/wp-content/uploads/2017/12/global.mfg_.pmi_.04dec2017.png" alt="" width="716" height="407"  /></a></p>
</div><!-- .entry-content -->

<footer class="entry-meta">
    By James Picerno | <a href="https://www.capitalspectator.com/macro-briefing-4-december-2017/" title="5:29 am" rel="bookmark"><time class="entry-date" datetime="2017-12-04T05:29:17-05:00">December 4, 2017</time></a>
</footer><!-- .entry-meta -->

<div class="entry-content">
    <p><a href="https://www.amazon.com/gp/product/0691170797/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=9325&amp;creativeASIN=0691170797&amp;linkCode=as2&amp;tag=thecapitalspe-20&amp;linkId=3b5ba4b4886a9885d7c266b410a2bd98" target="_blank" rel="noopener"><img decoding="async" class="alignleft" src="https://ws-na.amazon-adsystem.com/widgets/q?_encoding=UTF8&amp;MarketPlace=US&amp;ASIN=0691170797&amp;ServiceVersion=20070822&amp;ID=AsinImage&amp;WS=1&amp;Format=_SL250_&amp;tag=thecapitalspe-20" border="0"/></a><img loading="lazy" decoding="async" style="border: none !important; margin: 0px !important;" src="https://ir-na.amazon-adsystem.com/e/ir?t=thecapitalspe-20&amp;l=am2&amp;o=1&amp;a=0691170797" alt="" width="1" height="1" border="0"/>● <a href="https://www.amazon.com/gp/product/0691170797/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=9325&amp;creativeASIN=0691170797&amp;linkCode=as2&amp;tag=thecapitalspe-20&amp;linkId=62acf56e03df62bee075e611a7a259d8" target="_blank" rel="noopener">Big Mind: How Collective Intelligence Can Change Our World</a><img loading="lazy" decoding="async" style="border: none !important; margin: 0px !important;" src="https://ir-na.amazon-adsystem.com/e/ir?t=thecapitalspe-20&amp;l=am2&amp;o=1&amp;a=0691170797" alt="" width="1" height="1" border="0"/><br/>By Geoff Mulgan<br/><strong><a href="https://press.princeton.edu/titles/11098.html">Summary</a> via publisher (Princeton University Press)</strong><br/>A new domain of collective intelligence has emerged in recent years, spurred by an influx of digital technologies enabling organizations and societies to think at scale. This “larger mind”—the partnership of human and machine capabilities—has the potential to address the significant challenges of our time. So why don't advanced technologies automatically yield optimal outcomes? Drawing insights from various fields, including philosophy, computer science, and biology, **Big Mind** explores how collective intelligence can assist corporations, governments, universities, and societies in maximizing human intellect and digital resources.<br/><a href="https://www.capitalspectator.com/book-bits-2-december-2017/#more-9589" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
</div><!-- .entry-content -->

<footer class="entry-meta">
    By James Picerno | <a href="https://www.capitalspectator.com/book-bits-2-december-2017/" title="8:13 am" rel="bookmark"><time class="entry-date" datetime="2017-12-02T08:13:42-05:00">December 2, 2017</time></a>
</footer><!-- .entry-meta -->

<div class="entry-content">
    <p>In November, US stocks regained their position as the leading performers among major asset classes. The Russell 3000 Index rose by 3.0%, marking its strongest increase since February and extending a streak of 13 consecutive months of positive total returns for the benchmark.<br/><a href="https://www.capitalspectator.com/major-asset-classes-november-2017-performance-review/#more-9592" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
</div><!-- .entry-content -->

<footer class="entry-meta">
    By James Picerno | <a href="https://www.capitalspectator.com/major-asset-classes-november-2017-performance-review/" title="7:17 am" rel="bookmark"><time class="entry-date" datetime="2017-12-01T07:17:13-05:00">December 1, 2017</time></a>
</footer><!-- .entry-meta -->

<div class="entry-content">
    <p><span style="color: #0000ff;">The GOP tax bill faces delays in the Senate due to concerns over the deficit:</span> <a href="http://thehill.com/homenews/senate/362716-mcconnell-works-to-salvage-tax-bill">The Hill</a><br/><span style="color: #0000ff;">The White House is expected to replace Secretary of State Tillerson:</span> <a href="https://www.nytimes.com/2017/11/30/us/politics/state-department-tillerson-pompeo-trump.html">NY Times</a><br/><span style="color: #0000ff;">The Dow Jones Industrial Average surpasses 24,000 for the first time:</span> <a href="http://www.latimes.com/business/la-fi-markets-20171130-story.html">LA Times</a><br/><span style="color: #0000ff;">US consumer spending growth cools in October as inflation rises:</span> <a href="https://www.bloomberg.com/news/articles/2017-11-30/u-s-consumer-spending-cools-while-inflation-may-encourage-fed">Bloomberg</a><br/><span style="color: #0000ff;">Personal income in the US sees unexpected growth in October:</span> <a href="http://www.rttnews.com/2840639/u-s-personal-income-climbs-more-than-expected-in-october.aspx?type=useco">RTT</a><br/><span style="color: #0000ff;">US jobless claims decrease for the second consecutive week:</span> <a href="https://www.reuters.com/article/us-usa-economy-unemployment/u-s-jobless-claims-post-second-weekly-decline-idUSKBN1DU1UH">Reuters</a><br/><span style="color: #0000ff;">Chicago PMI dips to a three-month low in November:</span> <a href="https://www.ism-chicago.org/insidepages/reportsonbusiness/">ISM-Chicago</a><br/><span style="color: #0000ff;">Is Congress on the verge of cutting a tax rate that doesn’t require revisions?</span> <a href="http://blog.yardeni.com/2017/11/corporate-taxes-facts-vs-fiction.html">Yardeni Research</a></p>
    <p><a href="https://www.capitalspectator.com/wp-content/uploads/2017/11/corp.tax_.rate_.01dec2017.png"><img loading="lazy" decoding="async" class="alignnone size-full wp-image-9591" src="https://www.capitalspectator.com/wp-content/uploads/2017/11/corp.tax_.rate_.01dec2017.png" alt="" width="648" height="379"  /></a></p>
</div><!-- .entry-content -->

<footer class="entry-meta">
    By James Picerno | <a href="https://www.capitalspectator.com/macro-briefing-1-december-2017/" title="4:35 am" rel="bookmark"><time class="entry-date" datetime="2017-12-01T04:35:37-05:00">December 1, 2017</time></a>
</footer><!-- .entry-meta -->