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<p>This year's first quarter economic activity in the U.S. presents varying snapshots—encouraging, mediocre, or even bearish—according to preliminary estimates from CapitalSpectator.com. Given that we are still in the early stages of the quarter, it's wise to approach these figures with caution.</p>
<p> <a href="https://www.capitalspectator.com/early-us-gdp-nowcasts-for-q1-are-wide-ranging/#more-19632" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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By James Picerno | <a href="https://www.capitalspectator.com/early-us-gdp-nowcasts-for-q1-are-wide-ranging/" title="7:00 am" rel="bookmark"><time class="entry-date" datetime="2023-02-08T07:00:43-05:00">February 8, 2023</time></a>
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<p>* President Biden <a href="https://www.cnbc.com/2023/02/08/five-key-economic-points-in-bidens-2023-state-of-the-union-address-to-congress.html">unveils</a> his economic agenda during the State of the Union address<br/>* The death toll from the Syria-Turkey earthquake <a href="https://www.reuters.com/world/middle-east/death-toll-syria-turkey-quake-rises-more-than-8700-2023-02-08/">increases,</a> nearing 10,000<br/>* Fed Chairman Powell <a href="https://www.cnbc.com/2023/02/08/stock-market-powells-speech-was-hawkish-investors-mood-was-bullish.html">delivers a hawkish speech</a>, but investors remain optimistic<br/>* Shipping giant Maersk <a href="https://www.bloomberg.com/news/articles/2023-02-08/maersk-sees-global-trade-contracting-as-much-as-2-5-in-2023#xj4y7vzkg">forecasts</a> a potential contraction of global trade by 2.5% in 2023<br/>* Inflation’s “toughest days are behind us,” according to <a href="https://www.morningstar.com/articles/1135954/kathy-jones-on-inflation-the-worst-is-behind-us">Charles Schwab’s</a> key fixed-income strategist<br/>* Zoom becomes the latest tech company to <a href="https://www.cnn.com/2023/02/07/tech/zoom-layoffs">announce</a> significant layoffs<br/>* The U.S. trade deficit <a href="https://www.reuters.com/markets/us/us-trade-deficit-widens-goods-exports-10-month-low-2023-02-07/">wides in December,</a> marking a record high for 2022<br/>* Despite increased lending restrictions, the U.S. junk bond yield spread remains low:</p>
<p><a href="https://www.capitalspectator.com/wp-content/uploads/2023/02/spread.08feb2023.png"><img fetchpriority="high" decoding="async" class="alignnone size-full wp-image-19630" src="https://www.capitalspectator.com/wp-content/uploads/2023/02/spread.08feb2023.png" alt="" width="650" height="450" /></a></p>
<p> <a href="https://www.capitalspectator.com/macro-briefing-8-february-2023/#more-19629" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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By James Picerno | <a href="https://www.capitalspectator.com/macro-briefing-8-february-2023/" title="6:07 am" rel="bookmark"><time class="entry-date" datetime="2023-02-08T06:07:34-05:00">February 8, 2023</time></a>
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<p>This year's U.S. stock market rally is characterized by the dominance of high-beta stocks, which are significantly outperforming the wider market as observed through a range of proxy ETFs up to Monday’s close (February 6).</p>
<p> <a href="https://www.capitalspectator.com/high-beta-small-cap-value-still-lead-equity-factors-in-2023/#more-19624" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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By James Picerno | <a href="https://www.capitalspectator.com/high-beta-small-cap-value-still-lead-equity-factors-in-2023/" title="7:17 am" rel="bookmark"><time class="entry-date" datetime="2023-02-07T07:17:17-05:00">February 7, 2023</time></a>
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<p>* The death toll <a href="https://apnews.com/article/science-politics-disaster-planning-and-response-middle-east-syria-c727c62abe97d9f6171462351dc4584c?utm_source=apnews&utm_medium=featuredcard&utm_campaign=leadstory">exceeds</a> 5,000 in the Turkey-Syria earthquake<br/>* The state of the U.S. economy is a <a href="https://www.axios.com/2023/02/07/biden-state-of-the-union-economy">primary concern</a> for President Biden in his State of the Union speech tonight<br/>* GOP House Speaker McCarthy <a href="https://www.ibtimes.com/top-us-house-republican-mccarthy-wants-compromise-debt-ceiling-cuts-biden-3665024">demands</a> spending cuts from Biden<br/>* Baidu, the Chinese search engine giant, sees its shares <a href="https://www.cnn.com/2023/02/06/tech/china-baidu-ai-bot-chatgpt-rival-intl-hnk/index.html">surge</a> following the announcement of an AI bot<br/>* Google is set to launch Bard, an artificial intelligence bot intended to compete with ChatGPT <a href="https://www.bbc.com/news/technology-64546299">shortly</a><br/>* CVS <a href="https://www.wsj.com/articles/cvs-nearing-10-5-billion-deal-for-primary-care-provider-oak-street-health-11675727217">plans to acquire</a> primary-care provider Oak Street Health for $10.5 billion<br/>* Market breadth <a href="https://www.wsj.com/articles/the-markets-breadth-is-improving-as-more-stocks-join-rally-11675738995?mod=hp_lead_pos1">improves</a> as this year's stock market rally takes hold<br/>* The policy-sensitive 2-year U.S. Treasury yield rises to a one-month high:</p>
<p><a href="https://www.capitalspectator.com/wp-content/uploads/2023/02/two.yr_.07feb2023.png"><img decoding="async" class="alignnone size-full wp-image-19622" src="https://www.capitalspectator.com/wp-content/uploads/2023/02/two.yr_.07feb2023.png" alt="" width="700" height="312" /></a></p>
<p> <a href="https://www.capitalspectator.com/macro-briefing-7-february-2023/#more-19621" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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By James Picerno | <a href="https://www.capitalspectator.com/macro-briefing-7-february-2023/" title="6:24 am" rel="bookmark"><time class="entry-date" datetime="2023-02-07T06:24:26-05:00">February 7, 2023</time></a>
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<p>U.S. shares extended their rally for a second consecutive week, driving a mixed trading performance across major asset classes as of Friday’s close (February 3), based on a variety of ETFs.</p>
<p> <a href="https://www.capitalspectator.com/us-stocks-led-mixed-trading-for-global-markets-last-week/#more-19615" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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By James Picerno | <a href="https://www.capitalspectator.com/us-stocks-led-mixed-trading-for-global-markets-last-week/" title="7:32 am" rel="bookmark"><time class="entry-date" datetime="2023-02-06T07:32:58-05:00">February 6, 2023</time></a>
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<p>* China <a href="https://www.cnbc.com/2023/02/06/china-urges-calm-after-us-shoots-down-suspected-spy-balloon.html">calls</a> for calm following the U.S. downing of a suspected spy balloon<br/>* A severe earthquake <a href="https://apnews.com/article/earthquake-shakes-turkey-b927808f6a5c54bdb669120faa40b7bc?utm_source=homepage&utm_medium=TopNews&utm_campaign=position_01">claims</a> 1,300 lives in Turkey and Syria<br/>* Is a new growth cycle <a href="https://www.ibtimes.com/us-economy-could-past-soft-landing-new-virtuous-cycle-growth-3664595">emerging</a> for the U.S. economy?<br/>* A global green trade and subsidy war is <a href="https://www.wsj.com/articles/green-deal-industrial-plan-european-union-inflation-reduction-act-biden-administration-trade-war-subsidies-11675372289">intensifying</a><br/>* China's economic reopening is expected to <a href="https://www.economist.com/finance-and-economics/2023/02/05/chinas-ultra-fast-economic-recovery">boost</a> global growth this year<br/>* Dell announces <a href="https://www.bbc.com/news/technology-64536590">job cuts</a> as part of ongoing reductions in the tech sector<br/>* Speculative stocks are <a href="https://www.wsj.com/articles/speculative-stocks-soar-as-investors-dust-off-low-rate-playbook-11675633644?mod=hp_lead_pos2">driving</a> this year's stock market rally<br/>* The U.S. payrolls <a href="https://www.cnbc.com/2023/02/03/jobs-report-january-2023-.html">increased significantly</a> in January, exceeding expectations<br/>* The January payroll surge <a href=">surprised</a> economists, partially due to seasonal adjustments<br/>* Fed funds futures <a href="https://www.wsj.com/articles/upbeat-economic-data-keep-investors-on-edge-about-fed-11675528570?mod=hp_lead_pos1">are indicating higher chances</a> of two additional 1/4-point rate hikes:</p>
<p><a href="https://www.capitalspectator.com/wp-content/uploads/2023/02/fedfunds.06feb2023.png"><img decoding="async" class="alignnone size-full wp-image-19612" src="https://www.capitalspectator.com/wp-content/uploads/2023/02/fedfunds.06feb2023.png" alt="" width="937" height="582" /></a></p>
<p> <a href="https://www.capitalspectator.com/macro-briefing-6-february-2023/#more-19611" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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By James Picerno | <a href="https://www.capitalspectator.com/macro-briefing-6-february-2023/" title="6:30 am" rel="bookmark"><time class="entry-date" datetime="2023-02-06T06:30:18-05:00">February 6, 2023</time></a>
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<p><a href="https://www.amazon.com/Crisis-Democratic-Capitalism-Martin-Wolf/dp/0735224218?crid=16M6IJMK0SDTF&keywords=the+crisis+of+democratic+capitalism&qid=1675437722&sprefix=The+Crisis+of+Democratic+Capitalism%2Caps%2C138&sr=8-1&linkCode=li2&tag=thecapitalspe-20&linkId=ac72e1529186a59acd9ca285deb0b119&language=en_US&ref_=as_li_ss_il" target="_blank" rel="noopener"><img decoding="async" class="alignleft" src="https://ws-na.amazon-adsystem.com/widgets/q?_encoding=UTF8&ASIN=0735224218&Format=_SL160_&ID=AsinImage&MarketPlace=US&ServiceVersion=20070822&WS=1&tag=thecapitalspe-20&language=en_US" border="0"/></a><img loading="lazy" decoding="async" style="border: none !important; margin: 0px !important;" src="https://ir-na.amazon-adsystem.com/e/ir?t=thecapitalspe-20&language=en_US&l=li2&o=1&a=0735224218" alt="" width="1" height="1" border="0"/>● <a href="https://amzn.to/3l6bkOp">The Crisis of Democratic Capitalism</a><br/>Martin Wolf<br/><strong><a href="https://www.economist.com/culture/2023/02/02/martin-wolfs-new-book-analyses-the-wests-malaise">Review</a> via The Economist</strong><br/>For those who remember the fall of communism, recent history has been startling. The victory of liberal political and economic systems has been marred by mistakes in wealthier nations, the rise of authoritarianism in China, and a concerning decline in faith in democracy in areas once referred to as the free world. Although this crisis in democracy appears less severe than it did a year or two ago, thanks to political shifts in the U.S. and missteps from China and Russia, the risk is still present and the necessity to comprehend the retreat of democracy remains critical.</p>
<p> <a href="https://www.capitalspectator.com/book-bits-4-february-2023/#more-19597" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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By James Picerno | <a href="https://www.capitalspectator.com/book-bits-4-february-2023/" title="1:35 am" rel="bookmark"><time class="entry-date" datetime="2023-02-04T01:35:00-05:00">February 4, 2023</time></a>
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<p>The Federal Reserve raised interest rates once more this week, with Chairman Jerome Powell signaling additional hikes to come. However, the bond market seems to disagree.</p>
<p> <a href="https://www.capitalspectator.com/treasury-market-predicts-fed-rate-hikes-are-done/#more-19608" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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By James Picerno | <a href="https://www.capitalspectator.com/treasury-market-predicts-fed-rate-hikes-are-done/" title="7:47 am" rel="bookmark"><time class="entry-date" datetime="2023-02-03T07:47:15-05:00">February 3, 2023</time></a>
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<p>* The Pentagon <a href="https://www.cbsnews.com/news/chinese-spy-balloon-china-montana-pentagon-today-2023-02-02/">reports</a> a Chinese spy balloon over Montana<br/>* Business activity in China <a href="https://www.pmi.spglobal.com/Public/Home/PressRelease/81ada91707f74fdbadaf3fd6e3c22231">shows growth</a> in January, marking the first increase in five months<br/>* The Eurozone economy <a href="https://www.pmi.spglobal.com/Public/Home/PressRelease/df1eb8e3228b44c2aaf645b14f9e36c5">expands</a> in January for the first time since June<br/>* U.S. mortgage rates <a href="https://www.cnn.com/2023/02/02/homes/mortgage-rates-february-2/index.html">decline</a> for the fourth consecutive week<br/>* Worker productivity in the U.S. <a href="https://www.kitco.com/news/2023-02-02/U-S-productivity-accelerates-in-fourth-quarter.html">rose</a> faster than anticipated in Q4<br/>* Austerity measures are becoming the <a href="https://www.nytimes.com/2023/02/02/technology/big-tech-earnings-austerity.html">new standard</a> in the tech industry<br/>* New orders for U.S.-manufactured goods <a href="https://finance.yahoo.com/news/u-factory-orders-rebound-december-152132995.html">sharply rebound</a> in December<br/>* U.S. jobless claims <a href="https://www.reuters.com/markets/us/us-weekly-jobless-claims-fall-layoffs-surge-january-2023-02-02/">slightly decrease</a> last week, remaining near record lows, but…<br/>* Announced job cuts <a href="https://www.challengergray.com/blog/jan-23-recession-or-correction-highest-january-since-2009-highest-monthly-total-since-september-2020/">exceed 100,000</a> in January— the highest in over two years:</p>
<p><a href="https://www.capitalspectator.com/wp-content/uploads/2023/02/job.cuts_.03feb2023.png"><img loading="lazy" decoding="async" class="alignnone size-full wp-image-19605" src="https://www.capitalspectator.com/wp-content/uploads/2023/02/job.cuts_.03feb2023.png" alt="" width="698" height="377" /></a></p>
<p> <a href="https://www.capitalspectator.com/macro-briefing-3-february-2023/#more-19604" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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By James Picerno | <a href="https://www.capitalspectator.com/macro-briefing-3-february-2023/" title="6:36 am" rel="bookmark"><time class="entry-date" datetime="2023-02-03T06:36:35-05:00">February 3, 2023</time></a>
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<p>The long-term performance outlook for the Global Market Index (GMI) improved slightly in January, reaching a 6% annualized forecast based on the average estimates from three models (detailed below). This estimate aligns with the historical ten-year return for GMI, which consists of an unmanaged, market-value-weighted portfolio including all <a href="https://www.capitalspectator.com/major-asset-classes-january-2023-performance-review/">major asset classes</a> (excluding cash).</p>
<p> <a href="https://www.capitalspectator.com/total-return-forecasts-major-asset-classes-2-february-2023/#more-19600" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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By James Picerno | <a href="https://www.capitalspectator.com/total-return-forecasts-major-asset-classes-2-february-2023/" title="6:45 am" rel="bookmark"><time class="entry-date" datetime="2023-02-02T06:45:24-05:00">February 2, 2023</time></a>
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