Capital Spectator: Investing, Asset Allocation, and Economics Insights

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    <p>As the Federal Reserve prepares for its upcoming FOMC meeting on February 1, many analysts anticipate a potential increase in interest rates. The consensus in the <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html">futures market</a> indicates a likelihood that this hike may be capped at a modest 25 basis points. This tempered expectation follows positive developments in inflation reported just yesterday.</p>

    <p> <a href="https://www.capitalspectator.com/10-year-treasury-yield-fair-value-estimate-13-january-2023/#more-19478" 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/10-year-treasury-yield-fair-value-estimate-13-january-2023/" title="7:26 am" rel="bookmark"><time class="entry-date" datetime="2023-01-13T07:26:27-05:00">January 13, 2023</time></a>
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    <p>* The IMF forecasts a <a href="https://www.nytimes.com/2023/01/12/business/imf-global-economy-recession.html">rebound in the global economy</a> later this year. <br/> * Fed officials <a href="https://www.ibtimes.com/fed-policymakers-signal-rate-hike-slowdown-coming-no-easing-3656418">hint at a milder rate hike</a> but have ruled out any cuts. <br/> * The Attorney General <a href="https://apnews.com/article/classified-documents-biden-home-wilmington-33479d12c7cf0a822adb2f44c32b88fd">has appointed</a> a special prosecutor to examine Biden’s documents. <br/> * Europe’s mild winter <a href="https://www.wsj.com/articles/europes-mild-winter-cushions-economic-blow-of-ukraine-war-11673604102?mod=hp_lead_pos1">lessens</a> the economic impact of the Ukraine conflict. <br/> * China experienced a <a href="https://www.cnbc.com/2023/01/13/chinas-exports-slump-less-than-expected-in-december.html">decline in exports</a> in December, but it was less severe than anticipated. <br/> * Germany’s economy <a href="https://www.rttnews.com/3336945/german-economy-grows-1-90-in-2022-to-beat-expectations-can-it-avoid-recession.aspx">slowed</a> less than projected in 2022. <br/> * The UK economy <a href="https://www.bbc.com/news/business-64238309">unexpectedly expanded</a> in November. <br/> * Major stock and bond index funds have <a href="https://www.morningstar.com/articles/1132030/why-are-these-big-index-funds-underperforming">struggled recently</a>. <br/> * US jobless claims <a href="https://www.wsj.com/articles/u-s-jobless-claims-edge-down-in-first-week-of-year-11673530895">decreased</a> in the first week of the new year. <br/> * US consumer inflation <a href="https://www.cnbc.com/2023/01/12/consumer-prices-fell-0point1percent-in-december-in-line-with-economists-expectations.html">continues to ease</a> in December:</p>
    <p><a href="https://www.capitalspectator.com/wp-content/uploads/2023/01/cpi.un_.2023-01-12.png"><img fetchpriority="high" decoding="async" class="alignnone size-full wp-image-19476" src="https://www.capitalspectator.com/wp-content/uploads/2023/01/cpi.un_.2023-01-12.png" alt="" width="650" height="450"  /></a></p>
    <p> <a href="https://www.capitalspectator.com/macro-briefing-13-january-2023/#more-19475" 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-13-january-2023/" title="6:32 am" rel="bookmark"><time class="entry-date" datetime="2023-01-13T06:32:45-05:00">January 13, 2023</time></a>
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    <p>While predictions of a recession have been rampant lately, the labor market remains a strong counterpoint. Although the growth rate for nonfarm payrolls is gradually decreasing, December’s figures still indicate solid gains. Nevertheless, concerns about a potential recession linger, fueled by signals from various <a href="https://www.pmi.spglobal.com/Public/Home/PressRelease/700c7112c4b14ee199e8adf4c1827d31">economic</a> and <a href="https://markets.businessinsider.com/news/stocks/recession-warning-economic-outlook-inverted-yield-curve-fed-rate-hike-2023-1">financial</a> indicators. Will the resilience of the labor market start to fade, confirming these grim forecasts? The declining number of temporary workers, often viewed as a leading indicator, suggests it might.</p>
    <p> <a href="https://www.capitalspectator.com/is-the-labor-markets-resilience-poised-to-fade/#more-19467" 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/is-the-labor-markets-resilience-poised-to-fade/" title="7:44 am" rel="bookmark"><time class="entry-date" datetime="2023-01-12T07:44:14-05:00">January 12, 2023</time></a>
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    <p>* Will Biden’s document issues escalate into a <a href="https://www.cnn.com/2023/01/12/politics/joe-biden-documents-gop-house-george-santos/index.html">political crisis?</a><br/>* A US debt-ceiling conflict is <a href="https://www.ibtimes.com/analysis-investors-brace-us-debt-ceiling-fight-after-house-speaker-saga-3655864">on the horizon</a> for later in the year.<br/>* The US is bolstering its military alliance with Japan to <a href="https://www.cnn.com/2023/01/11/politics/us-japan-marine-unit-china/index.html">deter Chinese aggression</a>.<br/>* Analysts predict corporate profits will <a href="https://www.nytimes.com/2023/01/12/business/corporate-earnings-fourth-quarter.html">decline</a> for the first time since the pandemic began.<br/>* Consumer inflation in China <a href="https://www.reuters.com/markets/asia/china-consumer-inflation-accelerates-dec-ppi-falls-with-soft-demand-2023-01-12/">increased to an annual rate of 1.8%</a>, still under the 2% target.<br/>* Some analysts believe recent economic pessimism has been overly extreme, as per <a href="https://www.barrons.com/articles/what-to-know-today-51673427144">JP Morgan’s Dimon</a>.<br/>* European stocks may eclipse US shares this year, according to <a href="https://www.cnbc.com/2023/01/12/europe-could-outperform-the-us-in-equities-and-growth-this-year.html">analysts</a>.<br/>* The inflation outlook for businesses <a href="https://www.atlantafed.org/research/inflation-projector/">continues to improve</a> this January based on findings from the Atlanta Fed:</p>
    <p><a href="https://www.capitalspectator.com/wp-content/uploads/2023/01/biz.infl_.exp_.12jan2023.png"><img decoding="async" class="alignnone size-full wp-image-19470" src="https://www.capitalspectator.com/wp-content/uploads/2023/01/biz.infl_.exp_.12jan2023.png" alt="" width="900" height="350"  /></a></p>
    <p> <a href="https://www.capitalspectator.com/macro-briefing-12-january-2023/#more-19469" 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-12-january-2023/" title="6:42 am" rel="bookmark"><time class="entry-date" datetime="2023-01-12T06:42:59-05:00">January 12, 2023</time></a>
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    <p>The market often communicates its preferences without explanation, dropping hints that can guide interpretation. Understanding these hints can be an art, especially when trends appear to be shifting. One effective method for monitoring these changes is through the comparative analysis of ETF pairs.</p>

    <p> <a href="https://www.capitalspectator.com/looking-for-risk-on-signals/#more-19459" 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/looking-for-risk-on-signals/" title="7:03 am" rel="bookmark"><time class="entry-date" datetime="2023-01-11T07:03:30-05:00">January 11, 2023</time></a>
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    <p>* The World Bank has <a href="https://www.wsj.com/articles/world-bank-cuts-2023-global-growth-projection-as-inflation-persists-11673356337">significantly revised</a> its growth projections for the global economy in 2023. <br/> * Powell <a href="https://www.cnbc.com/2023/01/10/powell-stresses-need-for-feds-political-independence-while-tackling-inflation.html">emphasized</a> that the Fed may have to make unpopular decisions to stabilize prices. <br/> * The West's efforts to curb Russia’s oil revenues are <a href="https://www.cnbc.com/2023/01/11/ukraine-war-russias-fossil-fuel-earnings-fall-in-december.html">starting to strain</a> the country’s finances. <br/> * The US and its allies are <a href="https://www.wsj.com/articles/u-s-allies-prepare-fresh-sanctions-on-russian-oil-industry-11673432088?mod=hp_lead_pos1">preparing</a> new sanctions targeting the Russian oil sector. <br/> * Cryptocurrency platform Coinbase is <a href="https://www.npr.org/2023/01/10/1148163220/coinbase-layoffs-crypto-winter-bitcoin">laying off</a> 950 employees. <br/> * More focused measures of core inflation are <a href="https://www.wsj.com/articles/forget-core-cpi-market-pros-are-searching-for-supercore-inflation-11673413222?mod=hp_lead_pos4">drawing attention</a> ahead of tomorrow’s CPI report. <br/> * The first AI-driven robot lawyer will <a href="https://www.cbsnews.com/news/ai-powered-robot-lawyer-takes-its-first-court-case/">make its debut</a> in a US court. <br/> * The policy-sensitive 2-year US Treasury yield remains steady at around 4.2%:</p>
    <p><a href="https://www.capitalspectator.com/wp-content/uploads/2023/01/two.yr_.11jan2023.png"><img decoding="async" class="alignnone size-full wp-image-19458" src="https://www.capitalspectator.com/wp-content/uploads/2023/01/two.yr_.11jan2023.png" alt="" width="700" height="312"  /></a></p>
    <p> <a href="https://www.capitalspectator.com/macro-briefing-11-january-2023/#more-19456" 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-11-january-2023/" title="6:28 am" rel="bookmark"><time class="entry-date" datetime="2023-01-11T06:28:27-05:00">January 11, 2023</time></a>
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    <p>What factors influence the performance of the equity market over time? The list is extensive and ever-changing, and no one can accurately pinpoint every variable in real-time; only Mr. Market seems to know for sure. However, through analysis, we can hypothesize which elements are crucial, such as the fluctuations of the US dollar.</p>

    <p> <a href="https://www.capitalspectator.com/the-us-dollars-influence-on-the-stock-market-isnt-trivial/#more-19453" 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/the-us-dollars-influence-on-the-stock-market-isnt-trivial/" title="8:02 am" rel="bookmark"><time class="entry-date" datetime="2023-01-10T08:02:34-05:00">January 10, 2023</time></a>
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    <p>* President Biden convened a meeting with the Mexican president to <a href="https://apnews.com/article/biden-north-america-summit-mexico-updates-871328ff21fc6a87b698742f6e9ed3d4">discuss</a> the migration crisis at the border.<br/> * A significant portion of national security experts perceive a <a href="https://www.ibtimes.com/russian-collapse-due-civil-war-political-disintegration-expected-2033-expert-poll-3655096">risk of Russia collapsing</a> within the next decade.<br/> * US consumers are <a href="https://www.cnn.com/2023/01/09/economy/consumer-credit-november/index.html">prolonging</a> a historic rise in credit as of November.<br/> * The small business sentiment index <a href="https://www.nfib.com/surveys/small-business-economic-trends/">dropped</a> in December, nearing a 10-year low.<br/> * McCarthy’s concessions <a href="https://thehill.com/homenews/senate/3806110-mccarthys-concessions-spur-fears-of-potential-default-government-shutdown/">heighten fears</a> of a potential default and government shutdown.<br/> * Major US banks are <a href="https://www.reuters.com/business/finance/us-banks-get-ready-shrinking-profits-recession-2023-01-10/">projected to report</a> lower profits.<br/> * Consumer inflation expectations decreased once more in December according to a <a href="https://www.newyorkfed.org/newsevents/news/research/2023/20230109">NY Fed survey:</a></p>
    <p><a href="https://www.capitalspectator.com/wp-content/uploads/2023/01/inf.exp_.10jan2023.png"><img loading="lazy" decoding="async" class="alignnone size-full wp-image-19450" src="https://www.capitalspectator.com/wp-content/uploads/2023/01/inf.exp_.10jan2023.png" alt="" width="733" height="414"  /></a></p>
    <p> <a href="https://www.capitalspectator.com/macro-briefing-10-january-2023/#more-19449" 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-10-january-2023/" title="6:40 am" rel="bookmark"><time class="entry-date" datetime="2023-01-10T06:40:41-05:00">January 10, 2023</time></a>
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    <p>Most of the <a href="https://www.capitalspectator.com/major-asset-classes-december-2022-performance-review/">major asset classes</a> showed strong gains as the new year kicked off, according to various proxy ETFs. The only notable exception was the commodity sector.</p>

    <p> <a href="https://www.capitalspectator.com/global-markets-rally-in-first-trading-week-of-2023/#more-19443" 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/global-markets-rally-in-first-trading-week-of-2023/" title="7:06 am" rel="bookmark"><time class="entry-date" datetime="2023-01-09T07:06:32-05:00">January 9, 2023</time></a>
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<div class="entry-content">
    <p>* Thousands of protesters <a href="https://www.bbc.com/news/live/world-latin-america-64206148">stormed</a> government buildings in Brazil.<br/>* President Biden <a href="https://www.wsj.com/articles/biden-summit-with-lopez-obrador-trudeau-to-focus-on-migration-supply-chains-11673241684?mod=hp_lead_pos6">met</a> with Mexico's president today, focusing on migration and supply chains.<br/>* The fragile GOP majority <a href="https://www.nytimes.com/2023/01/07/us/politics/speaker-election-debt-limit-republicans.html">raises concerns</a> over the potential for a debt-ceiling battle.<br/>* China has <a href="https://www.cnn.com/2023/01/09/asia/china-taiwan-combat-drills-intl-hnk-ml/index.html">commenced</a> large-scale military exercises near Taiwan.<br/>* This week’s consumer inflation report will <a href="https://finance.yahoo.com/news/us-cpi-help-determine-size-210000798.html">impact</a> the upcoming Fed rate hike decision.<br/>* Layoffs within the tech sector are <a href="https://www.bloomberg.com/news/articles/2022-12-07/tech-layoffs-2022-tracker-these-companies-are-making-big-job-cuts?srnd=premium&amp;leadSource=uverify%20wall">on the rise</a>.<br/>* Goldman Sachs plans to <a href="https://www.reuters.com/business/finance/goldman-sachs-start-cutting-thousands-jobs-midweek-sources-2023-01-09/">cut thousands of jobs</a> this week.<br/>* The Eurozone's unemployment rate remains at a <a href="https://www.sharecast.com/news/news-and-announcements--/eurozone-unemployment-unchanged-at-65--11906508.html">record low</a> of 6.5% as of November.<br/>* Gold prices reached an <a href="https://www.cnbc.com/2023/01/09/gold-prices-gain-on-hopes-of-smaller-us-rate-hikes.html">eight-month high</a> in early Monday trading:</p>
    <p><a href="https://www.capitalspectator.com/wp-content/uploads/2023/01/gold.09jan2023.png"><img loading="lazy" decoding="async" class="alignnone size-full wp-image-19442" src="https://www.capitalspectator.com/wp-content/uploads/2023/01/gold.09jan2023.png" alt="" width="1187" height="346"  /></a></p>
    <p> <a href="https://www.capitalspectator.com/macro-briefing-9-january-2023/#more-19440" 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-9-january-2023/" title="6:25 am" rel="bookmark"><time class="entry-date" datetime="2023-01-09T06:25:22-05:00">January 9, 2023</time></a>
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