In the world of finance, the quest for objective analysis to support informed investment decisions resembles the search for the Holy Grail. However, narrative risk consistently threatens to lead investors astray, undermining our journey toward clarity. Engaging stories captivate audiences, particularly within finance and economics. The challenge arises when we encounter a plethora of intriguing narratives that ultimately offer little in the way of actionable information. True insights derived from a meticulous examination of data are rare in an environment dominated by emotionally charged storylines that distract from rational thought.
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● The Fed grapples with soft inflation affecting its monetary policy | WSJ
● Possible Fed actions following an interest rate increase | WaPo
● Will market fluctuations postpone a rate hike? Likely not. | Bloomberg
● Prospects for prolonged low interest rates | NY Times
● UK inflation sees a positive shift in November–the first in four months. | Reuters
● Will falling oil prices lead to an emergency OPEC meeting? | Telegraph
Last week, investors gravitated toward safe-haven assets, which significantly influenced market trends. For the trading days ending December 11, investment-grade bonds in both domestic and international markets were the sole gainers among major asset classes, as represented by various ETFs. Notably, foreign corporate bonds stood out, recording a 1.2% increase through the PowerShares International Corp Bond ETF (PICB).
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● US retail sales show a 0.2% increase in November | WSJ
● Consumer sentiment in the US climbs to a four-month high in December | Bloomberg
● US retail inventories, excluding autos, rose in October | Reuters
● Eurozone industrial output experiences a sharp rebound in October | RTT
● Economic indicators from China suggest a recovery | RTT
● Japan’s industrial output rises for the second consecutive month in October | RTT
● India’s industrial output reaches a five-year high in October | Eco Times
● Inflationary trends in India show signs of easing in November | Times of India
● Swiped: How to Protect Yourself in a World Full of Scammers, Phishers, and Identity Thieves
By Adam Levin
Summary via publisher (Public Affairs)
As identity theft becomes more prevalent, safeguarding oneself is crucial. While strong passwords and vigilant spam filters have their place, they are insufficient on their own. Many individuals view identity theft as a lucrative career, with some hackers hoarding vast collections of stolen internet passwords. Others stream video feeds from compromised webcams, capturing various locations and even private moments. Retailers like Target have also shown vulnerability, with in-store purchases being tracked and exploited. Adam Levin, a recognized advocate for consumer protection and identity fraud expert, offers guidance in navigating this precarious landscape.
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According to a report from the Census Bureau, US retail sales increased by 0.2% in November. This rise slightly surpasses the prior month’s growth of 0.1%. However, this month-over-month increase conceals a concerning trend of year-over-year slowing growth. Notably, annual spending has dropped to a lackluster 1.4%, which is the weakest growth rate since mid-2009, highlighting a significant downturn in consumer activity. Importantly, this decline is not solely attributed to diminished gasoline sales resulting from the ongoing bear market in energy.
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Buffett’s Asset Allocation Advice: Take it … With a Twist
Javier Estrada
October 26, 2015
One of the most crucial considerations for retirees is determining their portfolio’s asset allocation. Investors can choose between a static or dynamic allocation, with simplicity often favoring the former. Recently, Warren Buffett reinforced the value of static allocations by advising a trustee to allocate 90% of a bequest into stocks and 10% into short-term bonds. Evidence presented suggests that compared to other static allocations, a 90/10 split has an impressively low failure rate while offering substantial upside potential coupled with downside protection. Additionally, minor adjustments to this allocation can create effective dynamic strategies with improved returns and risk mitigation.
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● Jobless claims in the US reach a five-month high | Reuters
● Consumer Comfort Index in the US rises after several weeks of decline | Bloomberg
● US import prices fall for the fifth consecutive month in November | WSJ
● UN reports global economic growth slowed to 2.4% in 2015, the slowest pace since 2008 | WaPo
● IEA anticipates that the oil surplus will persist until late 2016 | Bloomberg
● Bank of England maintains record-low interest rates | RTT
Forecasts suggest that US retail sales will see a 0.3% increase in the forthcoming report for November, reflecting a slight improvement compared to the previous month’s lackluster performance, according to The Capital Spectator’s average point forecast derived from various econometric estimates.
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The rationale for increasing interest rates appears tenuous. Nonetheless, the Federal Reserve is likely to commence this process during its upcoming monetary policy meeting. A key argument for adopting a hawkish stance is the positive trend in nonfarm payrolls observed in recent months. However, a wealth of additional data suggests a more subdued economic landscape, as evidenced by the Atlanta Fed’s GDPNow model, currently forecasting modest 1.5% growth in US GDP for the fourth quarter.
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