* The Biden administration will extend the ban on home foreclosures.
* Massive protests in Myanmar persist in response to the military coup.
* US retail sales are projected to show recovery in today’s January update.
* Electricity prices skyrocket in Texas amid severe winter conditions.
* China surpassed the US in 2020, becoming Europe’s largest trading partner.
* Bitcoin hits a record $51,000.
* Widespread business disruptions occur across the US in the aftermath of the winter storm.
* Does extreme weather present an opportunity for upgrading infrastructure?
* Manufacturing activity in New York state grows at a faster rate in February.
* The 10-year Treasury yield rises to 1.30%, approaching a one-year high:
Early estimates for US economic growth in the first quarter suggest a continuation of the recovery that began in Q3 of last year. Current forecasts indicate that GDP growth is set to pick up slightly from the rate observed in the last quarter of 2020.
* Pelosi announces a proposal for a commission to investigate the Capitol riot.
* The unresolved issue of the US debt ceiling looms over Biden’s $1.9 trillion relief bill.
* China is considering restrictions on rare earth exports to the US defense sector.
* Severe winter weather triggers emergency declarations in several states.
* The winter weather situation pushes US crude oil prices above $60 per barrel.
* The daily count of new Covid-19 deaths drops to a three-month low.
* Both Biden and the Fed are not viewing inflation as a potential concern.
* Bitcoin’s rally sends its price to a record $50,000.
* The 30-year Treasury yield climbs above 2%, reaching a yearly peak:
Emerging market stocks once again emerged as the top performers for the week among major asset classes, based on a range of exchange-traded funds. Commodities and foreign equity from developed markets trailed closely behind in second and third place during the trading week that ended on February 12.
* An Arctic freeze in Texas results in widespread power outages.
* The rate of Covid-19 infection in the US drops to its lowest since October.
* There is increasing support for an inquiry into the Capitol riot following Trump’s acquittal.
* Protests in Myanmar continue after the military coup on February 1.
* Increased demand for corporate debt is fueling a lending boom in Wall Street.
* Afghanistan teeters on the brink as the Taliban extends its control.
* Japan’s economy shows growth in Q4, demonstrating resilience.
* Japan’s Nikkei 225 stock index reaches a new high for the first time in three decades.
* Eurozone industrial production declines more than expected in December.
* US consumer sentiment drops to a six-month low in February as inflation expectations rise:
In this issue:
- Stocks increase as Treasury yields climb.
- Is the trend shifting in favor of global asset allocation?
Programming note: From this issue forward, ETF-PS will distinguish between reporting on our portfolio strategy benchmarks and proprietary strategies, with updates in an upcoming issue.
Equities rise as the reflation trend begins to affect bonds: US equities advanced for a second consecutive week, as evidenced by Vanguard Total US Stock Market (VTI). The fund increased by 1.7% at Friday’s close (February 12), marking its first week of back-to-back gains this year, and reached a record high.
Why Are High Exposures to Factor Betas Unlikely to Deliver Anticipated Returns?
Chris Brightman (Research Affiliates) et al.
January 11, 2021
Investors who select strategies creating exposure to factor betas may be taking on uncompensated risks. Our analysis across a wide array of factors and global markets indicates that strategies based on fundamental traits yield significant returns, while those rooted in statistical betas yield nearly zero returns. In developing factor-based strategies, investors should prioritize exposure to the fundamental characteristics defining a factor and utilize statistical measures to manage associated risks. Conversely, approaching factor betas as a way to capture returns is misguided.
* A House committee approves Biden’s $1.9 trillion relief proposal.
* Biden announces the US has secured 200 million additional vaccine doses.
* Vaccine distribution increasingly improves across the nation.
* Today marks the beginning of Trump’s legal team’s defense in the Senate impeachment trial as the trial resumes.
* Fed President Daly expects the central bank’s bond purchasing to continue throughout 2021.
* The Eurozone is on the brink of a political struggle over rising debt levels.
* Considering how technological advancements could unleash significant productivity gains.
* UK GDP contracted 9.9% in 2020 but showed recovery in December.
* Jobless claims in the US indicate continued challenges related to the pandemic:
Small-cap stocks are enjoying a prosperous year. Despite it being only mid-February, year-to-date data indicate a notable performance advantage for smaller companies within the US equity market, based on a selection of exchange-traded funds up to yesterday’s close (February 10).
In recent weeks, key developments across various sectors have influenced market dynamics and global events. From economic forecasts indicating continued recovery in the U.S. to significant political movements and protests in countries like Myanmar, the landscape remains fluid. Below is an overview of important news and emerging trends.
As various factors unfold, they continue to reshape both the financial markets and geopolitical environments. Tracking these indicators is essential for understanding the broader implications for economies and communities around the globe.
