The Capital Spectator: Investing, Asset Allocation, and Economic Insights

            <div class="entry-content">
        <p><a href="https://www.capitalspectator.com/wp-content/uploads/2024/05/port.03may2024.png"><img decoding="async" class="wp-image-22130 alignleft" src="https://www.capitalspectator.com/wp-content/uploads/2024/05/port.03may2024.png" alt="" width="139" height="182"  /></a>● <a href="https://amzn.to/3UtefPj">The Complete Guide to Portfolio Performance: Appraise, Analyze, Act</a><br/>Pascal François and Georges Hubner<br/><strong><a href="https://www.wiley.com/en-us/The+Complete+Guide+to+Portfolio+Performance%3A+Appraise,+Analyze,+Act-p-9781119930174">Summary</a> via publisher (Wiley)</strong><br/>This book serves as a practical and easily navigable reference for performance measurement in asset and wealth management. In "The Complete Guide to Portfolio Performance: Appraise, Analyze, Act," a team of finance professors with substantial real-world experience present a valuable resource for asset and wealth managers, ideal for daily use. The book is thoughtfully organized, enriched with real-life examples of the concepts discussed. It provides extensive coverage on essential portfolio performance topics across 18 chapters filled with actionable and clearly articulated content. Each chapter concludes with relevant cross-references, “Key Takeaways and Equations” sections, and recommendations for further research for those who wish to delve deeper into the subject.</p>

Continue reading →

            <div class="entry-content">
        <p>Preliminary assessments of the US GDP for the second quarter indicate that economic output may stabilize following two consecutive quarters of slow growth. This outlook stems from the median of a series of nowcasts gathered by CapitalSpectator.com. While it’s essential to approach this estimate with caution at this early stage of the quarter, the current data hint at a potential normalization of economic activity after the fluctuations experienced in the post-pandemic period.</p>

Continue reading →

            <div class="entry-content">
        <p>* The global economy is projected to grow by 3.1% in 2024, matching the increase seen in 2023, according to <a href="https://www.oecd.org/newsroom/economic-outlook-steady-global-growth-expected-for-2024-and-2025.htm">OECD forecasts</a><br/>* Global manufacturing activity showed slight expansion in April, as noted in a <a href="https://www.pmi.spglobal.com/Public/Home/PressRelease/40276f0bd3a74edf878244eeebfb7c86">PMI survey</a><br/>* US factory orders <a href="https://www.rttnews.com/3444454/u-s-factory-orders-surge-in-line-with-estimates-in-march.aspx">increased</a> for the second consecutive month in March<br/>* US labor costs <a href="https://finance.yahoo.com/news/us-productivity-slows-sharply-first-130713581.html">rose sharply</a> in the first quarter, coinciding with a slowdown in worker productivity growth<br/>* US jobless claims <a href="https://realeconomy.rsmus.com/jobless-claims-data-shows-strong-growth-as-inflation-concerns-linger/">remained</a> at historically low levels:</p>

Continue reading →

            <div class="entry-content">
        <p>The long-term return forecast for the Global Market Index (GMI) has seen a slight increase for the third consecutive month in April. The latest revised estimate (derived from three distinct models) suggests a 7.0% annualized return for the unmanaged benchmark that encompasses all <a href="https://www.capitalspectator.com/major-asset-classes-april-2024-performance-review/">major asset classes</a> (excluding cash), based on market weights from ETF proxies. This projection reflects a minor uptick from the <a href="https://www.capitalspectator.com/total-return-forecasts-major-asset-classes-2-april-2024/">outlook from the previous month.</a></p>

Continue reading →

            <div class="entry-content">
        <p>* The Federal Reserve has opted to keep the target rate <a href="https://apnews.com/article/federal-reserve-inflation-prices-interest-rates-cuts-348e4db8a6c91f108268713d181d6a17">steady</a> at 5.25%-5.50%<br/>* Solutions to the reckless US spending dilemma lie in either painful adjustments or sheer luck, as noted in <a href="https://www.economist.com/leaders/2024/05/02/americas-reckless-borrowing-is-a-danger-to-its-economy-and-the-worlds">recent analyses</a><br/>* The ISM Manufacturing Index <a href="https://www.advisorperspectives.com/dshort/updates/2024/05/01/ism-manufacturing-index-moves-back-into-contraction-territory-in-april">dipped</a> back into contraction territory in April<br/>* US job openings have experienced a decline <a href="https://finance.yahoo.com/news/us-job-openings-fall-8-141732496.html">in March</a>, but remain relatively high<br/>* US private hiring <a href="https://www.haver.com/articles/adp-employment-and-pay-growth-remain-firm-in-april">surged</a> beyond expectations in April:</p>

Continue reading →

            <div class="entry-content">
        <p>April saw most major asset classes retreat, marking the toughest month for global markets yet in 2024, as evidenced by a variety of ETFs.</p>

Continue reading →

            <div class="entry-content">
        <p>* US home prices <a href="https://thehill.com/business/housing/4633931-record-highs-home-prices-february/">continued to climb</a> in March, reaching an all-time high<br/>* Worker compensation <a href="https://www.cnbc.com/2024/04/30/worker-pay-rose-more-than-expected-in-q1-in-another-sign-of-persistent-inflation.html">outpaced expectations</a> in the first quarter, reflecting ongoing inflation concerns<br/>* South Korea's export growth—a key global trade indicator—<a href="https://www.wsj.com/economy/trade/south-koreas-export-growth-accelerated-in-april-8ad5f57c?mod=economy_lead_story">picked up</a> in April<br/>* Major US newspapers <a href="https://www.axios.com/2024/04/30/microsoft-openai-lawsuit-copyright-newspapers-alden-global">filed lawsuits</a> against OpenAI and Microsoft over copyright violations<br/>* The election year is <a href="https://www.nytimes.com/2024/05/01/business/economy/federal-reserve-presidential-election.html">complicating</a> policy decisions for the Federal Reserve<br/>* US consumer confidence has <a href="https://www.conference-board.org/topics/consumer-confidence">dipped</a> in April to its lowest point in nearly two years:</p>

Continue reading →

            <div class="entry-content">
        <p>Assessing recession risk through multiple indicators remains a vital exercise. Recent analyses have aggregated trends from the economies of all 50 states to estimate the likelihood of a <a href="https://www.nber.org/research/business-cycle-dating">NBER-defined</a> downturn being underway or approaching. <a href="https://www.capitalspectator.com/estimating-us-recession-risk-using-economic-data-for-states/">As of February</a>, this indicator showed ominous signs. However, more recent updates indicate that the warnings were premature.</p>

Continue reading →

            <div class="entry-content">
        <p>* The Fed is <a href="https://www.wsj.com/economy/central-banking/federal-reserve-meeting-interest-rates-inflation-6dcb05e8">expected</a> to maintain a disciplined approach by keeping rates elevated for an extended period<br/>* Rate cuts in the US are not anticipated until 2025, according to predictions by <a href="https://finance.yahoo.com/news/why-economists-originally-expected-multiple-004921469.html">Macquarie economists</a><br/>* Wall Street's <a href="https://www.wsj.com/real-estate/wall-street-has-spent-billions-buying-homes-a-crackdown-is-looming-f85ae5f6">aggressive home purchases</a> are now under scrutiny by lawmakers<br/>* There's ongoing debate about whether US federal borrowing is a primary factor driving <a href="https://www.nytimes.com/2024/04/29/us/politics/fed-inflation-deficit.html">high inflation rates</a><br/>* Discussion is underway regarding whether China's stockpiling of commodities signifies an impending <a href="https://www.newsweek.com/china-may-preparing-deploy-economic-nuclear-option-1894985">economic ‘nuclear option’</a><br/>* Demand for green energy transition has propelled copper prices to a <a href="https://www.marketplace.org/2024/04/29/copper-prices-demand-green-energy-transition/">two-year high</a>:</p>

Continue reading →

            <div class="entry-content">
        <p>The momentum factor is set to conclude April as it began—the top performer among US equity factors for the year, based on a series of ETFs through Friday’s close (April 26).</p>

Continue reading →