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<p>Heightened geopolitical tensions surrounding the ongoing <a href="http://www.economist.com/news/leaders/21598999-best-way-get-crimea-back-ukraine-become-prosperous-democracywith-wests">crisis in Ukraine</a> have dampened investor optimism recently. As this weekend's <a href="http://www.cnn.com/2014/03/13/politics/crimea-referendum-explainer/">secession referendum in Crimea</a> approaches, there is a flight toward safer investments, putting downward pressure on stock prices. Currently, U.S. equities still lead among the <a href="https://www.capitalspectator.com/major-asset-classes-feb-2014-performance-review/">major asset classes</a>, according to our standard ETF proxies, reflecting a 250-trading-day performance period (equivalent to roughly one year of returns). However, this performance advantage has noticeably diminished since our <a href="https://www.capitalspectator.com/asset-allocation-rebalancing-review-27-feb-2014/">previous analysis</a> in late February. Emerging market assets continue to trail in returns, showing little change from our last review.</p>
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By James Picerno | <a href="https://www.capitalspectator.com/asset-allocation-rebalancing-review-14-mar-2014/" title="11:57 am" rel="bookmark"><time class="entry-date" datetime="2014-03-14T11:57:59-04:00">March 14, 2014</time></a>
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<p>Recent reports indicate a rebound in <a href="http://www.census.gov/retail/">retail spending</a> last month, along with a decline in <a href="http://www.dol.gov/opa/media/press/eta/ui/eta20140388.htm">new unemployment benefit claims</a> this week. Both reports have exceeded expectations with unexpectedly positive results. However, two significant concerns linger. Firstly, the year-over-year growth rate for retail sales continues to decline. Secondly, the annual drop in jobless claims remains relatively modest compared to recent trends. Though the latest news is optimistic, there is still uncertainty regarding the economic outlook for the coming months.</p>
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By James Picerno | <a href="https://www.capitalspectator.com/a-round-of-upbeat-news-for-jobless-claims-retail-sales/" title="1:38 pm" rel="bookmark"><time class="entry-date" datetime="2014-03-13T13:38:33-04:00">March 13, 2014</time></a>
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<p>The recent decline in copper prices has raised alarm regarding its implications for global deflation risks. The underlying cause of this price drop appears to be economic slowdown concerns in China.</p>
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By James Picerno | <a href="https://www.capitalspectator.com/does-coppers-slide-signal-a-new-phase-of-deflation-risk/" title="10:35 am" rel="bookmark"><time class="entry-date" datetime="2014-03-13T10:35:23-04:00">March 13, 2014</time></a>
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<p>According to The Capital Spectator's median econometric forecast, U.S. retail sales are expected to increase by 0.1% in the February report compared to January. This forecast marks an improvement from the previously reported decrease of 0.4% for January. However, the projection for February is slightly lower than three consensus estimates derived from recent economist surveys.</p>
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By James Picerno | <a href="https://www.capitalspectator.com/us-retail-sales-feb-2014-preview/" title="9:40 am" rel="bookmark"><time class="entry-date" datetime="2014-03-12T09:40:21-04:00">March 12, 2014</time></a>
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<p>The U.S. economic landscape has shown steady improvement in recent weeks, as indicated by a market-based assessment of macroeconomic conditions. The Macro-Markets Risk Index (MMRI) closed at 11.2% on Monday, March 10, suggesting that business cycle risk remains low. Should the MMRI drop below 0% in the future, it would signal a heightened risk of recession. In contrast, values above 0% imply that economic growth is expected to continue in the near term.</p>
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By James Picerno | <a href="https://www.capitalspectator.com/macro-markets-risk-index-11-2-3-11-2014/" title="11:46 am" rel="bookmark"><time class="entry-date" datetime="2014-03-11T11:46:10-04:00">March 11, 2014</time></a>
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<p>Inflation hawks continue to express concern regarding potential challenges as banks begin lending out the liquid assets currently held on their balance sheets. This shift might spark a resurgence in inflation, potentially undermining the Federal Reserve's monetary stimulus efforts. Nevertheless, inflation remains low, with consumer prices rising by less than 2% recently—close to the lowest levels in contemporary history. Analysts suggest that if economic growth accelerates this year, inflation risks may finally materialize. One indicator of this potential shift would be rising commercial loan levels. However, while bank lending to businesses has improved notably, the trend appears to have peaked, casting doubts on the expectation of a sharp rise in inflation. A slowing rate of commercial lending also raises questions about the overall economic health.</p>
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By James Picerno | <a href="https://www.capitalspectator.com/has-commercial-bank-lending-peaked/" title="11:19 am" rel="bookmark"><time class="entry-date" datetime="2014-03-10T11:19:31-04:00">March 10, 2014</time></a>
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<p>● <a href="http://www.amazon.com/gp/product/0307962431/ref=as_li_tf_tl?ie=UTF8&camp=1789&creative=9325&creativeASIN=0307962431&linkCode=as2&tag=thecapitalspe-20">Money: The Unauthorized Biography</a> <img decoding="async" style="border: none !important; margin: 0px !important;" alt="" src="http://ir-na.amazon-adsystem.com/e/ir?t=thecapitalspe-20&l=as2&o=1&a=0307962431" width="1" height="1" border="0"/><br/>By Felix Martin<br/><strong><a href="http://www.theguardian.com/books/2013/jun/05/money-unauthorised-biography-martin-review">Review</a> via The Guardian</strong><br/>In Oscar Wilde's *The Importance of Being Earnest*, the governess Miss Prism advises young Cecily to skip the chapter on the fall of the rupee in her political economy textbook, deeming it “somewhat too sensational.” In Felix Martin's thought-provoking book, it becomes evident that money—whether metallic or paper—plays a pivotal role in today's most pressing political and economic disputes. Furthermore, the narrow focus of economists on money as a “technical” aspect has contributed to the crises leading to the disaster of 2008, and it explains the ongoing failure to effectively address these challenges.</p>
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By James Picerno | <a href="https://www.capitalspectator.com/book-bits-3-8-14/" title="4:18 am" rel="bookmark"><time class="entry-date" datetime="2014-03-08T04:18:14-05:00">March 8, 2014</time></a>
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<p>For economic extremists seeking data to support their viewpoints, today's nonfarm payrolls <a href="http://stats.bls.gov/news.release/empsit.nr0.htm">update</a> for February may not provide the anticipated support. While the addition of 162,000 private-sector jobs last month (seasonally adjusted) surpasses January's revised figure of 145,000, the overall gain offers little reassurance that the labor market is on the verge of a significant rebound from recent sluggishness.</p>
<a href="https://www.capitalspectator.com/february-payrolls-better-but-still-sluggish/#more-3323" class="more-link">Continue reading <span class="meta-nav">→</span></a>
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By James Picerno | <a href="https://www.capitalspectator.com/february-payrolls-better-but-still-sluggish/" title="2:27 pm" rel="bookmark"><time class="entry-date" datetime="2014-03-07T14:27:09-05:00">March 7, 2014</time></a>
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<p>Greg Carlson from Morningstar <a href="http://news.morningstar.com/articlenet/article.aspx?id=638270">notes</a> that "allocation funds are fundamentally different from most funds we analyze." In my view, their primary challenge lies in identifying an effective benchmark for evaluating portfolios that frequently include various asset classes. For single-asset-class strategies, such as large-cap U.S. stocks, there are typically multiple reference indexes available for risk and return analysis. In contrast, asset allocation portfolios—whether they are self-managed or offered as mutual funds or ETFs—pose complexities due to the lack of a clear benchmark.</p>
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By James Picerno | <a href="https://www.capitalspectator.com/some-thoughts-on-sizing-up-asset-allocation-funds/" title="12:20 pm" rel="bookmark"><time class="entry-date" datetime="2014-03-07T12:20:08-05:00">March 7, 2014</time></a>
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<p>Today's weekly report on jobless claims reinforces the idea that this harsh winter is the primary factor influencing the recent lackluster economic data we've observed. If this assumption holds true, it suggests a more promising outlook for a spring recovery. However, we must exercise caution when interpreting a solitary jobless claims figure. Still, if we set aside our skepticism for a moment, today's report could provide some hope that the economy may not be as unstable as it seems.</p>
<a href="https://www.capitalspectator.com/jobless-claims-slide-to-3-month-low/#more-3319" class="more-link">Continue reading <span class="meta-nav">→</span></a>
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By James Picerno | <a href="https://www.capitalspectator.com/jobless-claims-slide-to-3-month-low/" title="2:31 pm" rel="bookmark"><time class="entry-date" datetime="2014-03-06T14:31:35-05:00">March 6, 2014</time></a>
</footer><!-- .entry-meta -->In summary, while the current economic indicators suggest mixed signals, there are aspects that may foster optimism for the future. Observing trends such as improved retail spending and a decrease in unemployment claims indicates potential resilience in the economy. However, challenges such as geopolitical tensions and deflation risks cannot be overlooked. As the situation unfolds, close attention to these dynamics will be crucial.