The ISM Manufacturing Index for the United States is projected to increase slightly to 50.2 in the upcoming November update, compared to the previous month. This forecast is based on comprehensive econometric estimates compiled by The Capital Spectator. Notably, this figure remains marginally above the neutral benchmark of 50.0, suggesting a minimal growth outlook for the US manufacturing sector.
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During the abbreviated trading week last week, real estate investment trusts (REITs) emerged as the strongest performers among major asset classes, according to proxy ETFs. The Vanguard REIT (VNQ) saw an increase of nearly 1.0%, outperforming the second-place Vanguard Total Stock Market (VTI), which tracks US equities, during the four trading days ending November 27.
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● The PMI indicates that US service sector growth rebounded in November | Markit
● The GDPNow Q4 growth estimate from the US has been adjusted down to 1.8% | Atlanta Fed
● Eurozone economic sentiment remains stable, although inflation expectations have risen | Reuters
● German retail spending showed a decrease in October | RTE
● Forecasts indicate a continued decline in German consumer confidence for December | RTT
● Japan’s industrial output has increased for the second consecutive month in October | MNI
Indeed, it’s true—the world headquarters of The Capital Spectator will observe a long holiday weekend.
After several days of celebrations and feasting, regular activities will resume on Monday, November 30.
Happy Thanksgiving!
The latest data indicates that consumer spending in the US rose at a modest rate, increasing by 0.1% in October, as reported this morning by the Bureau of Economic Analysis. This marks the second consecutive month of 0.1% growth, resulting in the weakest two-month performance for consumer spending in eight months.
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Momentum has garnered significant attention in asset pricing literature over recent decades. Trending behavior is a key characteristic of markets. Unlike other pricing “anomalies,” short-term return persistence—both positive and negative—has shown consistency across various asset classes. The widespread use of momentum strategies in the money management industry, without being arbitraged away, supports the idea of momentum’s ongoing effectiveness. Recent research suggests that this conventional notion of momentum can be improved by examining price trends through an “acceleration” lens.
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● The US Q3 GDP growth has been revised upwards to 2.1% | Reuters
● Consumer confidence has dropped to a 14-month low in November | MarketWatch
● According to the Richmond Fed, manufacturing activity has slowed in November | Richmond Fed
● Q3 corporate profits in the US declined at the steepest rate observed since the recession | WSJ
● Home prices in the US increased by 5.5% year-over-year in September | CNBC
Fed Chair Janet Yellen recently defended the rationale for maintaining interest rates near zero, advocating a gradual approach to future rate increases. The Treasury market, however, displayed mixed signals in response. The 2-year yield, which is closely watched as an indicator for rate expectations, rose to a five-and-a-half-year high of 0.94% yesterday (November 23) based on constant maturity data from Treasury.gov. Conversely, the benchmark 10-year yield fell to 2.25%, comfortably below its recent peak of 2.50% observed in mid-June.
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● According to the Chicago Fed, the US growth rate rose slightly in October | Chicago Fed
● The PMI shows that US manufacturing growth has slowed to a two-year low in November | Markit
● Fed Chair Yellen advocates for a cautious approach in raising rates | Reuters
● Existing home sales in the US fell in October after a sharp increase in September | HousingWire
● In Germany, business sentiment has shown a slight improvement in November | Ifo
● Confirmed Q3 GDP growth for Germany remains at 0.3% | Reuters
In summary, the latest economic updates highlight various trends in consumer spending, manufacturing, and market performance, pointing towards a mixed economic landscape. With the ongoing analysis of factors such as momentum and interest rates, market participants are urged to stay informed for any shifts that could arise in the coming months.