In the past week, a slight dip in the US Dollar Index provided a more favorable environment for foreign bonds among the major asset classes, as indicated by a series of proxy ETFs. Inflation-indexed bonds from international markets stood out, yielding the highest returns during the trading days that concluded on Friday, November 13. The standout performer of the week was the SPDR International Government Inflation-Protected Bond ETF (WIP), which rose by 0.9%. Notably, the top four ETFs last week among the major asset classes all belonged to the foreign bond sector.
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● US retail spending growth underperformed expectations in October | Reuters
● US consumer sentiment improved in November | CNBC
● US business inventories saw a rise in September | Reuters
● Japan has slipped back into recession in Q3 | RTT
● Eurozone’s October consumer inflation adjusted upwards to +0.1% YoY | Reuters
● The Great Surge: The Ascent of the Developing World
By Steven Radelet
Review via Publishers Weekly
Radelet, who serves as an economic adviser to the president of Liberia, presents a compelling argument: despite the often bleak portrayal of developing countries in the media, this era has witnessed unprecedented progress among the global poor. He backs this assertion with impressive statistics; for instance, since 1990, one billion people have escaped “extreme poverty.” His data also highlights improvements related to hunger and child mortality. While Radelet acknowledges ongoing challenges, his clear and engaging narrative is likely to persuade readers that the story of global development is more nuanced and positive than commonly perceived.
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If you were anticipating a robust October retail sales report to match the unexpectedly strong job growth from last month, the latest consumer spending data may come as a letdown. Although not catastrophic, the modest 0.1% increase in retail consumption falls short of forecasts, suggesting that it remains prudent to temper expectations for a significant economic rebound in the fourth quarter.
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Federal Reserve officials are suggesting that the chances of a rate hike in December may be increasing. Recent comments from multiple policymakers indicate that while there is still room for debate, the discussions have taken on a hawkish tone compared to previous months, leading to speculation that tightening monetary policy could be on the agenda at next month’s FOMC meeting.
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● US job openings increased in September, reaching the second-highest level on record | Bloomberg
● Fed officials weigh the argument for a US rate hike in December | Reuters
● US jobless claims remained unchanged last week, staying near a four-decade low | WSJ
● US Consumer Comfort Index showed modest improvement in early November | Bloomberg
● Eurozone GDP growth slowed to +0.3% in Q3 | Eurostat
● In Q3, German growth moderated while the French economy showed signs of recovery | RTT
A recent article in Institutional Investor—“Market Timing Is Back In The Hunt For Investors”—explores the case for market timing as presented by AQR Capital Management. The firm finds an encouraging trend in the historical data. Their analysis, referencing records dating back to 1900, suggests that tactical asset allocation (TAA) can prove beneficial by allowing adjustments in asset allocation based on value and momentum factors over time. While this concept isn’t entirely novel, it offers a long-term perspective on how these factors can effectively aid in managing investment strategies.
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