<div class="entry-content">
<p>On Wednesday, political instability surrounding President Trump escalated, resulting in a downturn in the U.S. stock market. This turmoil raises concerns that the administration’s pro-growth initiatives may falter if the White House becomes preoccupied with the chaos—much of which is self-inflicted—that threatens to engulf Washington.<br/><a href="https://www.capitalspectator.com/mr-market-demands-a-bigger-discount-for-political-risk/#more-8778" 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/mr-market-demands-a-bigger-discount-for-political-risk/" title="7:10 am" rel="bookmark"><time class="entry-date" datetime="2017-05-18T07:10:39-04:00">May 18, 2017</time></a>
</footer><!-- .entry-meta --><div class="entry-content">
<p>The quest for a definitive answer in business-cycle analysis is a long-standing endeavor, albeit one likely destined for disappointment.<br/><a href="https://www.capitalspectator.com/the-limits-of-one-indicator-recession-analysis/#more-8774" 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/the-limits-of-one-indicator-recession-analysis/" title="8:04 am" rel="bookmark"><time class="entry-date" datetime="2017-05-17T08:04:24-04:00">May 17, 2017</time></a>
</footer><!-- .entry-meta --><div class="entry-content">
<p>Indicators from futures pricing suggest that the market anticipates another interest rate hike by the Federal Reserve during its upcoming monetary policy meeting. This outlook is further supported by the 2-year yield, which has reached a near post-recession high. However, the Treasury market’s more subdued inflation forecasts create ambiguity regarding future direction.<br/><a href="https://www.capitalspectator.com/mixed-messages-in-treasury-market-for-rate-outlook/#more-8767" 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/mixed-messages-in-treasury-market-for-rate-outlook/" title="7:10 am" rel="bookmark"><time class="entry-date" datetime="2017-05-16T07:10:45-04:00">May 16, 2017</time></a>
</footer><!-- .entry-meta --><div class="entry-content">
<p>Last week, emerging market equities surged, leading all <a href="https://www.capitalspectator.com/major-asset-classes-april-2017-performance-review/">major asset classes</a> and reaching a two-year peak among exchange-traded products.<br/><a href="https://www.capitalspectator.com/emerging-markets-stocks-rise-to-2-year-high/#more-8764" 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/emerging-markets-stocks-rise-to-2-year-high/" title="6:20 am" rel="bookmark"><time class="entry-date" datetime="2017-05-15T06:20:14-04:00">May 15, 2017</time></a>
</footer><!-- .entry-meta --><div class="entry-content">
<p><a href="https://www.amazon.com/gp/product/069117668X/ref=as_li_tl?ie=UTF8&camp=1789&creative=9325&creativeASIN=069117668X&linkCode=as2&tag=thecapitalspe-20&linkId=231851bf4eb7c1f4ebda00b152f7bf33" target="_blank" rel="noopener noreferrer"><img decoding="async" class="alignleft" src="https://ws-na.amazon-adsystem.com/widgets/q?_encoding=UTF8&MarketPlace=US&ASIN=069117668X&ServiceVersion=20070822&ID=AsinImage&WS=1&Format=_SL250_&tag=thecapitalspe-20" border="0"/></a><img decoding="async" style="border: none !important; margin: 0px !important;" src="https://ir-na.amazon-adsystem.com/e/ir?t=thecapitalspe-20&l=am2&o=1&a=069117668X" alt="" width="1" height="1" border="0"/> ● <a href="https://www.amazon.com/gp/product/069117668X/ref=as_li_tl?ie=UTF8&camp=1789&creative=9325&creativeASIN=069117668X&linkCode=as2&tag=thecapitalspe-20&linkId=2e2025b255ff091a3e43d553e40b666f" target="_blank" rel="noopener noreferrer">Cents and Sensibility: What Economics Can Learn from the Humanities</a><img decoding="async" style="border: none !important; margin: 0px !important;" src="https://ir-na.amazon-adsystem.com/e/ir?t=thecapitalspe-20&l=am2&o=1&a=069117668X" alt="" width="1" height="1" border="0"/><br/>By Gary Saul Morson and Morton Schapiro<br/><strong><a href="http://press.princeton.edu/titles/10957.html">Summary</a> via publisher (Princeton University Press)</strong><br/>Economists often approach human behavior as if their methods can explain it all. However, in *Cents and Sensibility*, a prominent literary critic and a distinguished economist argue that the humanities, particularly literature, can enhance the realism of economic models, improve predictions, and make policies more equitable and effective. Morson and Schapiro link Adam Smith's classic work, *The Wealth of Nations*, to his lesser-known text, *The Theory of Moral Sentiments*, suggesting that Jane Austen's innovative narrative style was crafted to highlight the empathy Smith perceived as essential to humanity.</p>
<p> <a href="https://www.capitalspectator.com/book-bits-13-may-2017/#more-8763" 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-13-may-2017/" title="7:06 am" rel="bookmark"><time class="entry-date" datetime="2017-05-13T07:06:14-04:00">May 13, 2017</time></a>
</footer><!-- .entry-meta --><div class="entry-content">
<p>The currently low volatility levels in the stock market have garnered significant attention as investors attempt to interpret their implications for equity investments and the economy. One viewpoint holds that this low volatility signifies a reduced risk of recession—accurate at least for now. Nonetheless, the relationship between market volatility and business cycles is too inconsistent to derive broad conclusions about recession risks. Essentially, one should not assume a bright economic outlook solely based on low volatility, nor should they consider a sudden increase in volatility as an automatic indicator of an impending recession.<br/><a href="https://www.capitalspectator.com/stock-market-volatility-and-recessions-a-primer/#more-8759" 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/stock-market-volatility-and-recessions-a-primer/" title="7:39 am" rel="bookmark"><time class="entry-date" datetime="2017-05-12T07:39:37-04:00">May 12, 2017</time></a>
</footer><!-- .entry-meta --><div class="entry-content">
<p>The surge in financial research in recent years has revealed a growing number of alpha-generating opportunities that supposedly provide shortcuts to enhancing returns beyond a market index. Yet, many studies caution about the substantial gap between the vast array of proposed factors and those that actually yield credible results.<br/><a href="https://www.capitalspectator.com/cleaning-out-the-factor-zoo/#more-8757" 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/cleaning-out-the-factor-zoo/" title="7:10 am" rel="bookmark"><time class="entry-date" datetime="2017-05-11T07:10:11-04:00">May 11, 2017</time></a>
</footer><!-- .entry-meta --><div class="entry-content">
<p>This week, the VIX Index—often referred to as the fear gauge of the U.S. equity market—dropped to its lowest level in twenty years. Interpretations of this development vary among analysts; some view it as a prelude to turmoil, while others perceive it as evidence that the favorable conditions will continue for some time.<br/><a href="https://www.capitalspectator.com/whats-the-deal-with-low-stock-market-volatility/#more-8754" 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/whats-the-deal-with-low-stock-market-volatility/" title="7:11 am" rel="bookmark"><time class="entry-date" datetime="2017-05-10T07:11:10-04:00">May 10, 2017</time></a>
</footer><!-- .entry-meta --><div class="entry-content">
<p>After a lackluster first quarter, economic growth is expected to rebound in Q2 according to several forecasts. Although predictions vary significantly, a common theme is the anticipation of increased output in the second quarter following a slow kickoff to the year.<br/><a href="https://www.capitalspectator.com/us-q2-gdp-growth-expected-to-rebound/#more-8752" 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-q2-gdp-growth-expected-to-rebound/" title="6:50 am" rel="bookmark"><time class="entry-date" datetime="2017-05-09T06:50:13-04:00">May 9, 2017</time></a>
</footer><!-- .entry-meta --><div class="entry-content">
<p>Equity markets in developed countries outside the U.S. experienced strong gains last week, marking the highest increase among the <a href="https://www.capitalspectator.com/major-asset-classes-april-2017-performance-review/">major asset classes</a> for the week ending May 5, according to a selection of exchange-traded products.<br/><a href="https://www.capitalspectator.com/foreign-developed-market-stocks-surged-last-week/#more-8749" 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/foreign-developed-market-stocks-surged-last-week/" title="6:08 am" rel="bookmark"><time class="entry-date" datetime="2017-05-08T06:08:52-04:00">May 8, 2017</time></a>
</footer><!-- .entry-meta -->