After experiencing two consecutive quarters of contraction, the U.S. gross domestic product (GDP) is projected to bounce back in the third quarter. This forecast is supported by the median estimates from a collection of nowcasts compiled by CapitalSpectator.com. However, a significant concern looms: recent PMI survey data suggests an imminent decline in output, raising fears of a potentially severe recession.
* As the Ukraine war reaches the six-month mark, there’s no end in sight
* Putin reportedly believes that winter will benefit Russia in its military efforts
* The U.S. plans to provide $3 billion in new aid for Ukraine
* U.S. military actions target Iran-related sites in Syria
* Rising inflation is pushing more Americans into poverty compared to the pandemic or Great Recession
* A decline in U.S. gasoline prices provides relief for consumers
* New home sales in the U.S. continued to decrease in July
* U.S. PMI survey data indicates further contraction in business activities in August:
Markets continue to grapple with various risk factors, such as: How long and how high will interest rates climb? When will inflation reach its peak? How will the situation in Ukraine develop further? Is a global recession inevitable, and if so, how severe will it be? Given the uncertainty of the future, market trends can provide valuable insights, particularly amidst ongoing discussions about potential outcomes.
* U.S. natural gas futures hit a 14-year high
* Economic activity in the Eurozone dropped for the second consecutive month in August according to survey data
* The euro is trading at a two-decade low against the U.S. dollar
* Economic activity in the UK is almost at a standstill in August, as highlighted by PMI data
* A Pimco analyst predicts that the era of low inflation has ended
* A strong dollar affects gold and silver prices negatively
* U.S. economic activity showed signs of recovery in July according to the Chicago Fed National Activity Index:
All major asset classes experienced significant declines during the week ending Friday, August 19, as evidenced by a series of ETFs.
* A U.S. delegation, including Indiana’s governor, is visiting Taiwan for trade discussions
* Russia claims there is no possibility for a diplomatic resolution to the Ukraine crisis
* The daughter of a close ally of Putin was killed in a car explosion near Moscow
* The U.S. and South Korea are conducting major military exercises amid threats from North Korea
* China’s lending rates have been cut again, following a previous reduction
* Germany is predicted to be heading for a recession, according to Bundesbank
* The U.S. is at a state of ‘effectively peak employment,’ says ZipRecruiter CEO Ian Siegal according to recent insights
* Severe droughts are creating challenges for supply chains and driving food prices up,
* The Fed is expected to reduce the pace of rate hikes to 50 basis points in September
* A significant portion of the business community anticipates a recession within the next 18 months
* The U.S. Dollar Index is nearing a 20-year high:
● Danger Zone: The Coming Conflict with ChinaMichael Beckley and Hal Brands
Excerpt via Foreign Policy
The most significant geopolitical disasters arise at the junction of ambition and desperation. Xi Jinping’s China is poised to be fueled by both elements. In our new book, “Danger Zone: The Coming Conflict with China,” we delve into the root of this urgency: a stagnating economy and an increasing sense of encirclement. Yet, we must first outline the grand aspirations of the Chinese Communist Party (CCP)—which seeks to reshape the global order in Asia and beyond. China doesn’t aim to merely be a superpower; it desires to become the singular superpower—the central force around which the global system revolves.
Effective portfolio design and management often thrive in an environment of straightforward rules and structures. Nevertheless, there are boundaries, and determining the right level of simplicity can be nuanced and subject to interpretation based on personal definitions of “simple” and “complex,” along with individual investment targets. The conversation about achieving a beneficial degree of simplicity encourages a fresh examination of what I refer to as the hierarchy of decisions involved in the continuous process of building and managing investment portfolios.
* The U.S. Leading Economic Index dipped for the fifth consecutive month
* Jobless claims in the U.S. decreased slightly last week, continuing to reflect low levels of layoffs
* The Philly Fed Manufacturing Index rose unexpectedly in August
* Central banks in Norway and New Zealand announced hikes in interest rates
* Turkey’s central bank cut interest rates despite soaring inflation
* Extreme heat is impacting the three largest economies globally
* U.S. existing home sales declined for the sixth month in a row in July:
The recent release of the Federal Reserve’s minutes from the July FOMC meeting emphasizes the central bank’s commitment to continuing interest rate hikes until inflation is controlled. This is a critical stance, considering that current inflation data suggest persistent challenges ahead before policy objectives and market pressures stabilize. Additionally, the Treasury market seems to be hinting that the intense monetary policy may be approaching its peak, as indicated by comparisons between the 2-year yield and the effective Fed funds rate (EFF).
