Recently, a significant question has gained traction due to the surge in interest rates. For instance, the benchmark 10-year Treasury yield increased to 2.73% yesterday, marking the highest level in almost four years. The rise of the 2-year rate has been even more pronounced, reaching a decade high on Tuesday.
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Trump connects his presidency to national prosperity during the State of the Union address: Bloomberg
Top points from Trump’s State of the Union address: The Hill
The Fed is poised to maintain interest rates during Yellen’s final meeting as chair: Reuters
North Korea is expected to display missiles ahead of the Winter Olympics in South Korea: CNN
Could Amazon’s entry into healthcare signify a major shift in the industry? Bloomberg
US Consumer Confidence Index climbs in December, nearing an 18-year peak: CNBC
According to Case-Shiller index: US home prices rose 6.2% in November compared to the previous year: USA Today
Should international investors be more cautious about foreign exchange risks? The Economist
Trump’s approval ratings by state — West Virginia leads while Vermont trails: Gallup
On January 30th, the benchmark 10-year rate rose to 2.70% for the first time since 2014, based on daily statistics from Treasury.gov. Contributing factors include stronger expectations for inflation and a weaker dollar. Whatever the reason, the technical outlook for the 10-year rate has recently adopted an upward trend, suggesting that this momentum will likely persist.
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A Washington think tank projects the US budget deficit will exceed $1 trillion in 2019: Reuters
CIA Director indicates Russia may interfere in this fall’s US mid-term elections: BBC
Eurozone GDP showed a solid 0.6% growth in the fourth quarter of 2017: Bloomberg
What’s on the agenda for Trump’s State of the Union address tonight? USA Today
US consumer spending increased by 0.4% in December as the savings rate dropped to a 12-year low: Reuters
Japan’s retail spending grew by 0.9% in December, exceeding expectations: RTT
Dallas Fed manufacturing production index eased in January after reaching an 11-year high: Dallas Fed
Obamacare has lessened financial strain for young adults: Philly Fed
Rising Treasury yields could pose a risk to stocks: Bloomberg
The 10-year Treasury yield reached 2.7% for the first time since 2014: MarketWatch
Every major asset class reported gains last week, as per data from various exchange-traded products. This surge in performance reflects increased optimism, representing the first comprehensive weekly advances since last November.
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Trump is facing a deadline to implement sanctions against Russia: Politico
Israel’s Netanyahu is in Moscow for discussions with Putin on Syria: Reuters
The Trump administration is exploring the nationalization of part of the US mobile network: Axios
The shale oil boom enhances US leverage in economics and diplomacy: NY Times
GDP increased by 2.6% in Q4, marking the slowest rise since Q1: MarketWatch
US durable goods orders surged by 2.9% in December, marking the most significant gain in six months: Bloomberg
How much longer will rising consumer confidence sustain the US economy? NY Times
The US merchandise trade deficit widened to the largest gap since 2008: Bloomberg
UK GDP growth exceeded expectations in Q4, with a 0.5% increase: RTT
For the first time in nearly a decade, all major economies are expanding: NY Times
By Ilene Grabel
Author quote via Bloomberg
Ilene Grabel, a professor at the University of Denver’s Josef Korbel School of International Studies and author of the new book When Things Don’t Fall Apart: Global Financial Governance and Developmental Finance in an Age of Productive Incoherence, argues that excessive coordination of economic policies can lead to synchronized business cycles, causing global booms and busts. A single global financial structure may allow errors to propagate more rapidly and destructively than a system with diverse components. She likens this to a forest comprised solely of one tree species; a single insect or fungus could decimate it. Grabel contends that diversity in governance enhances the safety of the financial system.
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In today’s fourth-quarter report, economists had anticipated a 2.9% increase in GDP, according to the consensus forecast from Econoday.com. However, the Bureau of Economic Analysis reported a more modest growth of 2.6%, the slowest since the weak gain of 1.2% in Q1 of 2017. Although the latest figure is respectable, it hasn’t elicited celebrations. Moreover, a review of the quarterly data suggests that the economy’s recent performance still retains positive momentum.
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While technology stocks continue to lead the market, recent improvements in healthcare suggest that a shift may be imminent. Based on one-year returns ranked by sector ETFs, telecom is the only sector reporting a year-over-year loss, with real estate stocks nearing the brink of negative performance.
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Trump denies attempting to dismiss special counsel investigating the Russia probe: LA Times
Surge in demand for risk assets triggers “tactical pullback” warnings: Bloomberg
The US economy is forecasted to report brisk growth in today’s Q4 GDP update: Reuters
US Leading Index rises in December, indicating strong economic growth for the first half of 2018: CB
Weekly jobless claims in the US rose to 233,000, but remain low overall: WSJ
New home sales in the US dropped more than anticipated in December: Bloomberg
Manufacturing growth has accelerated in the Kansas City Fed region: Bond Buyer
Atlanta Fed’s updated Q4 GDP nowcast remains steady at 3.4%: Atlanta Fed
