The Capital Spectator will be taking a break for the remainder of the week to engage in recreational research and development in an undisclosed location. Normal operations will resume on Monday, August 22. Cheers!
The often overlooked segment of foreign inflation-linked government bonds managed to outperform other asset classes last week with a total return of 2.1%, based on a collection of proxy ETFs for the major asset classes. This modest gain was enough to allow them to slightly surpass foreign stocks in developed markets, which secured the second-best performance for the five trading days leading to August 12.
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● Inside the Investments of Warren Buffett: Twenty Cases
By Yefei Lu
Summary via publisher (Columbia University Press)
Since the 1950s, Warren Buffett and his partners have funded some of the most profitable and innovative companies of the twentieth century. But what was their method for choosing the right investments? What criteria did Buffett and his team prioritize when evaluating emerging companies, and how can others apply these insights? “Inside the Investments of Warren Buffett” offers the most comprehensive analysis of Buffett’s long-term portfolio to date, serving as a valuable resource for his followers seeking to understand his investment success.
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Consumer spending in the United States remained stagnant in July, according to reports from the Commerce Department reports. This unexpected downturn could be a correction following June’s robust growth, which saw an increase of 0.8% based on the revised figures. However, the yearly trend for retail also showed a slight decline. In summary, while consumer interest remains positive, the growth rate is beginning to slow. Is this a concern? Potentially, though the recent rebound in job creation suggests that retail sales may continue to exhibit steady, albeit modest, growth.
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According to a report from Reuters, emerging markets are currently experiencing a “melt up” as “cash returns to global markets.” The news outlet cites Bank of America Merrill Lynch’s global strategy team, which noted that “sentiment is becoming more bullish, but is not yet at an extreme.” Let’s delve deeper by analyzing some proxy funds.
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Utility stocks continue to lead among US sectors for one-year trailing returns, as indicated by a collection of proxy ETFs; however, the upward trend in this sector appears to be losing steam. Some analysts even suggest that the enduring bull market in utilities resembles a bubble. Nevertheless, for the time being, this sector’s performance over the last year remains unmatched.
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Factor funds, often referred to as smart beta funds, have been rapidly increasing in popularity over the past few years, with marketing strategies that can rival political campaigns. While some methods have real merit, it’s not uncommon for providers to manipulate facts. In the most egregious instances, these products appear to be mere facades for charging relatively high fees with little to no benefit over traditional index funds targeting similar securities. How can one discern the differences? A thorough analysis is the only effective solution.
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In late August 2015, the US stock market experienced a sharp decline, leading to a year characterized by heightened volatility that seemed to signal a dire outlook for the economy. However, this volatility ultimately proved to be a false alarm as equities rebounded, reaching new all-time highs in recent weeks. Fear not, as the various downturns in the S&P 500 over the past year became prospective buying opportunities. While this insight is clear now, uncertainty prevailed at the time, particularly from a market-centric viewpoint. It is essential to note that the market’s disturbances were never validated by real-time monitoring of US macroeconomic risks. The takeaway: filtering market volatility through a macroeconomic lens is crucial for distinguishing meaningful signals from mere noise.
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Emerging-market stocks led the performance charts last week, as indicated by a collection of ETF proxies for the major asset classes. This increase (in unhedged US dollar terms) marks the sixth consecutive week of gains for this segment of the global equity markets.
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● Future: Economic Peril or Prosperity?
Edited by Christopher J. Coyne, et al.
Summary via publisher (Independent Institute)
What will the economy look like in fifty years? How will emerging technological innovations and changes in the marketplace and workplace transform our lives as consumers and workers? What effects will demographic shifts and dependency ratios have on our political landscape? Will economic freedom increase or diminish? What implications might heightened prosperity have for overall well-being? “Future: Economic Peril or Prosperity?” tackles these crucial questions through the insights of a diverse group of economists, prompting thoughtful debate and consideration on the subject. As co-editor Robert M. Whaples reflects in the introduction, “The predicted changes range from beneficial innovations that make life more comfortable to potentially unsettling technologies that could undermine our human dignity.”
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