In recent developments, global economic outlook has turned more cautious as tensions escalate in the Israel-Gaza conflict.
Key highlights include:
- * Concerns about the global economy intensifying due to ongoing hostilities.
- * Janet Yellen has stated that the economic impact of the Israeli-Palestinian conflict remains uncertain.
- * The House is scheduled to vote on electing a new speaker on Tuesday.
- * US oil production hit an all-time high last week.
- * Home sales in the US are on track for the slowest year in over a decade.
- * Rite Aid, a prominent pharmacy chain, has filed for bankruptcy.
- * Consumer sentiment in the US dropped in October, following two months of stability:
Rajiv Shah
Review via The Wall Street Journal
The path to achieving significant goals often involves a series of smaller, impactful actions. In his report on combating Ebola, Mr. Shah highlights the innovative burial practices developed by community organizations as highly effective. Similarly, during the Covid pandemic, the Rockefeller Foundation, under Shah’s leadership, prioritized enhancing diagnostic testing amidst the shortcomings of the CDC’s initial tests.
An ETF-Based Measure of Stock Price Fragility
Renato Lazo-Paz (University of Ottawa)
July 2023
A growing body of research is utilizing equity mutual fund flows to gauge a stock’s exposure to non-fundamental demand risk, or stock price fragility. However, this approach may be biased by confounding fundamental information, potentially resulting in an underestimation of risk exposure. We propose an alternative method that incorporates readily available primary market data from exchange-traded funds (ETFs). This approach significantly improves the predictive capacity of fragility in forecasting stock return volatility. Additionally, we observe that our measure reflects the impact of heightened ETF activity while also capturing the effects of institutional investors’ demand on price return volatility. Furthermore, our findings indicate a decline in the explanatory power of mutual fund-based fragility. These insights underscore the advantages of adopting an ETF-based fragility measure in light of emerging trends in asset management, particularly the growth of passive investing.
* Steve Scalise withdraws from the Speaker race, leaving the House in a state of uncertainty.
* Questions arise regarding whether a broader conflict in the Middle East could push the world economy into a recession.
* Oil prices have increased following the US’s reinforcement of sanctions on Russian crude oil sales.
* US jobless claims have remained steady, hovering near multi-decade lows.
* Consumer price inflation in the US has held unchanged at a 3.7% annual rate for September:
Recently, I analyzed data indicating that the S&P 500 Index is maintaining a solid performance this year, promising one of the stronger returns compared to historical averages. While this is encouraging, it’s still too early to conclude that the market is merely in a bear-market rally.
* The Israel-Hamas conflict may impact natural gas production and critical shipping routes.
* Despite the conflict, Yellen has indicated that it is not expected to have a significant effect on the global economy.
* Scalise, designated Speaker, is struggling to secure votes for the House speakership.
* The UAW strike is expanding at Ford’s Kentucky plant.
* According to the Fed minutes, officials plan to keep a ‘restrictive’ policy until inflation is addressed.
* Business inflation expectations remain relatively steady at 2.4% for October.
* Wholesale inflation in the US rose more than anticipated in September:
Even though the spring and summer rally in the S&P 500 Index has subsided, the market remains positioned to achieve one of the strongest annual gains seen in decades. There is, of course, the caveat that many factors can influence this trend before the end of the year. Nonetheless, American stocks continue to reflect a robust performance year-to-date.
* Republican members continue to be divided over the choice for House Speaker.
* The rise in bond yields is expected to facilitate a pause in Fed rate hikes.
* The housing sector is pressuring the Fed to halt further rate increases to prevent a harsh economic downturn.
* Economist Paul Krugman has reversed his stance, asserting that the US budget deficit is excessively high.
* Exxon has agreed to acquire shale oil company Pioneer for nearly $60 billion in stock.
* Small business optimism declined in September, with inflation identified as the “top problem.”
* The oil market is currently downplaying the significance of the Israel-Gaza conflict thus far.
Not too long ago, several courageous analysts predicted that 2023 would mark the resurgence of value stocks, revisiting their historically favorable trends. However, as it stands, growth stocks continue to lead the performance charts in 2023, according to a range of factor ETFs up to October 9.
* The IMF has reported that the global economy has lost momentum due to rising interest rates, yet…
* The IMF has increased its US growth forecast for 2023.
* Following a Hamas attack, Israel has temporarily shut down the Tamar offshore natural gas field.
* China is reportedly considering new stimulus measures to rejuvenate its faltering economy.
* The Country Garden property developer in China has voiced concerns over its ability to meet debt repayments.
* Fed officials have indicated that the recent spike in bond yields may lead the Fed to forgo additional rate hikes:
In this revised article, the content has been organized for better readability and clarity while maintaining the original structure, including images and links. Each section provides an informative summary on recent economic developments and analyses relevant to various sectors, ensuring a coherent flow throughout the piece.
