Value stands out as one of the most significant concepts within the factor zoo. However, measuring the value factor becomes complex for multi-asset class portfolios for a couple of reasons. First, valuing commodities like oil and gold is difficult since they don’t generate earnings or dividends. Second, even when cash flows are present, it is challenging to compare a diverse range of assets using standard valuation metrics such as book value or price-earnings ratios. For example, assessing the valuation of real estate investment trusts (REITs) requires a distinct approach compared to stocks, which differs again from bonds. One potential solution—at least a partial one—lies in estimating valuation through returns.
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The likelihood of a recession currently appears extremely low, but whether this low macroeconomic risk translates into strong growth remains uncertain for the upcoming preliminary estimate of first-quarter US GDP, which will be released on Friday.
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Last week, the US equity market recorded its first increase of the month, showcasing the strongest performance among the major asset classes based on a group of exchange-traded products.
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By Kenneth W. Gronbach with M.J. Moye
Interview with the author via BlogCritics.org
Q: Your book focuses on predicting the future accurately. How do demographics contribute to our understanding of future trends?
A: Demographics drive economics, not the other way around. The size of a market is determined by demographics, influencing commerce and cultural shifts. Demography reflects live births, deaths, and migration patterns, and significantly impacts politics as well. Essentially, it’s a numbers game—people can be counted, and much of what they influence hinges on their quantity, age, and geographic distribution.
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Will the Next Recession Hit Soon? Probably Not
Anton Cheremukhin (Federal Reserve Bank of Dallas)
January 2017
A “profits recession” often serves as an indicator for an actual recession. Viewing recessions through the lens of competitive excess helps explain why a real recession isn’t expected in the near future.
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Recent media, blog, and Wall Street reports suggest that so-called soft economic indicators—like surveys on spending intentions and expectations—may have become disconnected from the tangible hard data, which includes payrolls, sales, and production figures.
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While economic growth is projected to decelerate in the forthcoming first-quarter GDP report, the chances that a new recession has begun remain minimal.
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While financial stocks have experienced a downturn in recent weeks, they continue to lead US sectors in returns over the past year, according to a range of proxy ETFs as of April 17.
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A brief holiday is underway at The Capital Spectator headquarters, with the usual schedule set to resume on Wednesday, April 19. Cheers!
Forecasts for first-quarter US economic growth continue to vary significantly, with predictions ranging from a sharp slowdown to a mild improvement. Yet, despite this uncertainty, there were no indications from Fed Chair Janet Yellen that the central bank planned to delay interest rate hikes during her remarks on Monday.
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