● Job Openings Indicate Continued Payroll Growth in the US | Bloomberg
● Small-business Owners Express Highest Optimism Since 2007, Survey Reveals | LA Times
● The Long End of the US Yield Curve Flattens to Its Lowest Since January 2009 | GaveKal
● French Industrial Output Unexpectedly Declines in October | RTT
● BoE Chief Carney Announces UK Rates Will Increase Despite Dip in Inflation | Reuters
● Declining Inflation in China Signals Potential for Faster Easing | Reuters
If there’s any illness for which people offer many remedies, you can be assured that particular ailment is incurable…
— Anton Chekhov, The Cherry Orchard
New financial products typically aren’t centered on investing strategies; rather, they focus on facilitating buying and selling. Few companies truly commit to the long-term investment approach. The wisest course is to choose a long-term strategy, keep it straightforward, and adhere to it. With the influx of new offerings, the buyer should exercise caution.
— Jack Bogle, Q&A with Bloomberg
Last week’s unexpectedly robust increase in November payrolls may indicate improvement within the US economy, although the Treasury market tells a different story. But does it? The perception varies based on the part of the yield curve you examine. Following the positive payroll data from Friday, the 2-year yield has risen, as is typical for that segment, which is most responsive to shifts in rate expectations. However, this trend is complicated by plummeting inflation forecasts.
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● Congress Races to Conclude Spending Agreement Before Shutdown Deadline | MSNBC
● UK Industrial Production Unexpectantly Declines in October | MarketWatch
● German Exports Drop Slightly; Imports Fall the Most Since 2012 | RTT
● Brent Crude Oil Reaches Five-Year Low Below $66 Due to Oversupply | Reuters
● Lower Oil Prices Also Lead to Cheaper Commodities Amid Surplus | Bloomberg
● China’s Stock Surge Detaches from Economic Reality | Telegraph
A pronounced disparity persists between health care and energy sectors in the US stock market. Health care stocks have been leading the recent market surge, while energy companies continue to lag, as evidenced by one-year performance comparisons. Energy remains the only sector posting a loss over the last 252 trading days, according to relevant ETFs through Friday (Dec. 5). Positive momentum currently favors the health sector, and it wouldn’t be surprising if this trend continues in the short term. However, it is also valid to question if recent developments are setting the stage for a potentially profitable turnaround in the energy sector.
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The US economic outlook remains stable and positive, rebounding from October’s brief setback, as gauged by a market-based macroeconomic assessment. The Macro-Markets Risk Index (MMRI) concluded at +8.5% on Friday (Dec. 5), close to levels seen prior to mid-October’s decline. The consistent readings above zero suggest low business cycle risks. A decline below 0% in the MMRI would indicate increased recession risks, while values above 0% imply economic expansion in the near future.
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● German Industrial Output Grows in October as Economy Rebounds | Bloomberg
● Eurozone Investor Confidence Rebounds in December | RTT
● Japan’s Q3 GDP Downgraded More Than Previously Announced | MarketWatch
● US Gasoline Prices Hit Four-Year Low | Time
● Emerging Market Currencies Drop to Decade-Low as Chinese Stocks Rally | BusinessWeek
● China’s November Imports Decline Unexpectedly as Export Growth Slows | Reuters
● French GDP Growth Forecast Held Steady by Bank of France at 0.1% for Q4 | MNI
● Basic Economics (5th ed.)
By Thomas Sowell
Summary via publisher (Basic Books)
In this fifth edition of Basic Economics, Thomas Sowell updates his influential book on fundamental economic principles, providing readers with a clearer understanding of how these principles impact daily life. Using engaging examples from global history and contemporary society, Sowell articulates core economic concepts for the everyday reader in accessible language. Basic Economics, now available in six languages and featuring additional online material, remains committed to the principle that the essentials of economics can be grasped without complex jargon, graphs, or equations, and can be learned in a straightforward and enjoyable manner.
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Today’s labor market data from Washington regarding November payrolls stands out as some of the most encouraging news in recent memory. Private-sector employment rose by an impressive 314,000 last month, far exceeding the consensus forecast of +225,000. “Job increases were widespread, with notable growth in professional and business services, retail trade, health care, and manufacturing,” according to the Labor Department in today’s report.
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The recent growth in US retail spending has moderated, with the year-over-year increase cooling to 4.1% through October— the slowest rate since July. Does this suggest a disappointing end to the year for consumer spending? Not necessarily, according to the latest insights from the retail sector. The government’s report on November retail sales will be released on Dec. 11, but preliminary signs are lightly promising based on recent private data. Here’s a summary of what current figures indicate ahead of next week’s update from the US Census Bureau:
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