Categories Finance

The Capital Spectator: Insights on Investing, Asset Allocation, and Economics

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        <p><span style="color: #0000ff;">An anonymous op-ed from a New York Times writer stirs controversy in the White House: <a style="color: #0000ff;" href="https://www.politico.com/story/2018/09/05/trump-official-comes-out-against-the-president-in-anonymous-times-op-ed-808714">Politico</a></span><br/><span style="color: #0000ff;">Trump condemns the NY Times for publishing a “gutless” piece: <a style="color: #0000ff;" href="http://thehill.com/homenews/administration/405252-trump-blasts-nyt-after-newspaper-prints-anonymous-op-ed">The Hill</a></span><br/><span style="color: #0000ff;">Supreme Court nominee refuses to step back from Trump-related cases: <a style="color: #0000ff;" href="https://www.washingtontimes.com/news/2018/sep/5/brett-kavanaugh-declines-recuse-himself-trump-case/">Wash. Times</a></span><br/><span style="color: #0000ff;">China promises retaliation if the US introduces new trade tariffs: <a style="color: #0000ff;" href="https://www.reuters.com/article/us-usa-trade-china/china-warns-of-retaliation-if-u-s-slaps-new-tariffs-idUSKCN1LM0TK">Reuters</a></span><br/><span style="color: #0000ff;">Kim Jong-un of North Korea reaffirms his “unwavering trust” in Trump: <a style="color: #0000ff;" href="https://www.cnn.com/2018/09/06/asia/north-south-korea-trump-kim-moon-intl/index.html">CNN</a></span><br/><span style="color: #0000ff;">Emerging markets flirt with a bear market: <a style="color: #0000ff;" href="https://www.bloomberg.com/news/articles/2018-09-06/asian-emerging-markets-get-breather-as-u-s-weighs-more-tariffs?srnd=premium">Bloomberg </a></span><br/><span style="color: #0000ff;">White House reports an increase in US wages via alternative measures: <a style="color: #0000ff;" href="https://www.nytimes.com/2018/09/05/business/wage-growth-white-house.html">NY Times</a></span><br/><span style="color: #0000ff;">The US trade deficit reached a five-month high in July: <a style="color: #0000ff;" href="https://www.reuters.com/article/us-usa-economy-tradefigures/u-s-trade-deficit-surges-to-five-month-high-as-exports-fall-idUSKCN1LL1ME">Reuters</a></span><br/><span style="color: #0000ff;">Tech stocks may face significant weight reductions in the S&amp;P 500 due to an upcoming sector revamp: <a style="color: #0000ff;" href="https://lpl-research.com/hoc/Charts/Markets/090418WMC1.jpg">LPL</a></span></p>

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        <p>The anticipated risk premium for the Global Market Index (GMI) continued its upward trend in August, hitting an annualized rate of 5.0%—slightly higher than the <a href="https://www.capitalspectator.com/risk-premia-forecasts-major-asset-classes-2-august-2018/">previous month's estimate</a>. This figure suggests the expected annualized return over the long-term compared to a theoretical “risk-free” rate for GMI, which is a market-value-weighted portfolio encompassing all <a href="https://www.capitalspectator.com/major-asset-classes-august-2018-performance-review/">major asset classes</a>.<br/><a href="https://www.capitalspectator.com/risk-premia-forecasts-major-asset-classes-5-september-2018/#more-10950" 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/risk-premia-forecasts-major-asset-classes-5-september-2018/" title="6:51 am" rel="bookmark"><time class="entry-date" datetime="2018-09-05T06:51:25-04:00">September 5, 2018</time></a>
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        <p><span style="color: #0000ff;">New military operations commence in Syria: <a style="color: #0000ff;" href="https://www.nytimes.com/2018/09/04/world/middleeast/syria-idlib-airstrikes.html">NY Times</a></span><br/><span style="color: #0000ff;">Trump contemplates a government shutdown as elections approach: <a style="color: #0000ff;" href="https://www.bloomberg.com/news/articles/2018-09-05/trump-flirts-with-government-shutdown-gop-is-racing-to-avoid?srnd=premium">Bloomberg</a></span><br/><span style="color: #0000ff;">Senate confirmation hearings for Kavanaugh begin amidst chaos: <a style="color: #0000ff;" href="https://www.reuters.com/article/us-usa-court-kavanaugh/democrats-vow-sparks-will-fly-over-trumps-supreme-court-pick-idUSKCN1LK0YB">Reuters</a></span><br/><span style="color: #0000ff;">US ISM Manufacturing Index surged to a 14-year high last month: <a style="color: #0000ff;" href="https://www.marketwatch.com/story/american-manufacturers-growing-at-fastest-pace-in-14-years-ism-finds-2018-09-04">MarketWatch</a></span><br/><span style="color: #0000ff;">Global Manufacturing PMI dropped to a 21-month low in August: <a style="color: #0000ff;" href="https://www.markiteconomics.com/Survey/PressRelease.mvc/0d7e12b11e814f4f83eb418ec8220354">IHS Markit</a></span><br/><span style="color: #0000ff;">US Manufacturing PMI fell to a nine-month low in August: <a style="color: #0000ff;" href="https://www.markiteconomics.com/Survey/PressRelease.mvc/3d84a405bfc7428ea289ffc4ce392e16">IHS Markit</a></span><br/><span style="color: #0000ff;">Construction spending in the US increased by 0.1% in July: <a style="color: #0000ff;" href="http://www.foxnews.com/us/2018/09/04/us-construction-spending-rose-0-1-percent-in-july.html">AP</a></span><br/><span style="color: #0000ff;">SUV sales in the US experienced another significant increase in August: <a style="color: #0000ff;" href="https://www.cnbc.com/2018/09/04/august-auto-sales.html">CNBC</a></span><br/><span style="color: #0000ff;">Continued selling pressures affect emerging market assets: <a style="color: #0000ff;" href="https://www.bloomberg.com/news/articles/2018-09-05/emerging-market-contagion-fears-deepen-rupiah-in-cross-hairs">Bloomberg</a></span></p>

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        <p>For the second consecutive month, US equities led the performance among major asset classes in August. This marked the fifth straight month of gains and represented the strongest performance for the US stock market since January.<br/><a href="https://www.capitalspectator.com/major-asset-classes-august-2018-performance-review/#more-10941" 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/major-asset-classes-august-2018-performance-review/" title="6:59 am" rel="bookmark"><time class="entry-date" datetime="2018-09-04T06:59:26-04:00">September 4, 2018</time></a>
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        <p><span style="color: #0000ff;">Trump cautions Syria, Iran, and Russia regarding new military actions in Syria: <a style="color: #0000ff;" href="https://www.reuters.com/article/us-mideast-crisis-syria-trump/trump-warns-syria-not-to-recklessly-attack-idlib-province-idUSKCN1LJ252">Reuters</a></span><br/><span style="color: #0000ff;">Italy's financial plans are once again unsettling the markets: <a style="color: #0000ff;" href="https://www.marketwatch.com/story/italys-politics-send-tremors-through-markets-agai-2018-09-04">MarketWatch</a></span><br/><span style="color: #0000ff;">The GOP strategizes to prevent a government shutdown as the elections approach: <a style="color: #0000ff;" href="https://www.politico.com/story/2018/09/03/government-shutdown-congress-election-day-gop-leaders-trump-805787">Politico</a></span><br/><span style="color: #0000ff;">Kavanaugh's Supreme Court confirmation hearings are set to begin this week: <a style="color: #0000ff;" href="https://www.cnbc.com/2018/08/30/what-to-expect-from-brett-kavanaughs-supreme-court-confirmation-hearings-next-week.html">CNBC</a></span><br/><span style="color: #0000ff;">South Africa enters recession for the first time since 2009: <a style="color: #0000ff;" href="https://www.bloomberg.com/news/articles/2018-09-04/south-africa-s-economy-slips-into-first-recession-since-2009?srnd=premium">Bloomberg</a></span><br/><span style="color: #0000ff;">UK Manufacturing PMI falls to its lowest level in 25 months: <a style="color: #0000ff;" href="https://www.markiteconomics.com/Survey/PressRelease.mvc/e830abd7df454f68b40915494d40fb2e">IHS Markit</a></span><br/><span style="color: #0000ff;">Amazon ventures into the digital advertising sector: <a style="color: #0000ff;" href="https://www.nytimes.com/2018/09/03/business/media/amazon-digital-ads.html?rref=collection%2Fsectioncollection%2Fbusiness&amp;action=click&amp;contentCollection=business&amp;region=rank&amp;module=package&amp;version=highlights&amp;contentPlacement=1&amp;pgtype=sectionfront">NY Times</a></span><br/><span style="color: #0000ff;">The Chicago PMI declined in August, marking its first drop in five months: <a style="color: #0000ff;" href="https://www.ism-chicago.org/insidepages/reportsonbusiness/">Chicago ISM</a></span><br/><span style="color: #0000ff;">The US Consumer Index fell to a seven-month low in August: <a style="color: #0000ff;" href="https://www.cnbc.com/2018/08/31/consumer-sentiment-final-august-reading.html">CNBC</a></span></p>

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        <p>This Labor Day brings some positive news: the job market is thriving. While there may be discussions over the quality of jobs created in recent years, the sheer volume is certainly encouraging. <a href="https://fred.stlouisfed.org/series/CE16OV">US civilian employment</a> reached 155.965 million in July 2018—an all-time high.</p>