The month of October saw significant declines in global markets across most asset classes. The sole exception was emerging market stocks, which experienced a slight rise of 0.2% according to the MSCI EM Index. Overall, losses were prevalent as the fourth quarter commenced.
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Throughout the past week, major asset classes faced downturns, with the exception of foreign high-yield bonds. The majority of global market categories saw declines during the five trading days leading up to October 28, based on a selection of proxy ETFs.
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● No More Work: Why Full Employment Is a Bad Idea
By James Livingston
Summary via publisher (University of North Carolina Press)
For centuries, work has been viewed as a source of moral development and financial sustenance, teaching discipline, initiative, and integrity. The belief was that hard work could lead to personal success. However, recent experiences challenge this notion. In his book, James Livingston explores why many Americans still view work as a solution rather than a problem, and why the goal of “full employment” persists among both liberals and conservatives, even when job creation is increasingly seen as unfeasible for solving moral or economic challenges.
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Relying exclusively on a single indicator to gauge the likelihood of a recession can be problematic, yet it remains a popular method. Recently, I critiqued an approach that used the ISM Manufacturing Index in isolation. Today, I will examine a similar attempt that employs the Labor Market Conditions Index (LMCI) as a basis for evaluating whether the US economy has entered a downturn.
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The Federal Reserve has been striving to boost inflation for the past eight years, achieving limited success. However, some analysts believe we may be at a critical juncture where pricing pressures are set to increase. The Treasury market’s implied inflation forecasts appear to support this view, particularly in light of slightly stronger official inflation data.
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While no interest rate hike is anticipated during next week’s Federal Reserve policy meeting, the gathering scheduled for November 1-2 is expected to be examined closely for hints of potential moves in December.
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Projections indicate that the US economy is set to grow at its fastest pace in over a year during the third quarter, according to estimates for the upcoming “advance” GDP report from the Bureau of Economic Analysis. Many forecasts suggest that quarterly growth will surpass 2% (seasonally adjusted annual rate), which, if achieved, would mark a departure from the sluggish rate of roughly 1.0% seen in the previous three quarters.
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The overall trend of the US economy slowed in September for the second consecutive month, as indicated by the latest update of the three-month average of the Chicago Fed National Activity Index (CFNAI-MA3). The index dropped to -0.21 last month, the lowest point since May. This below-zero reading suggests that economic activity is moderately lagging behind the historical trend, even as there was a rebound in the macro trend that stalled in the last two months of Q3.
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Last week, markets witnessed a strong revival after a period of widespread losses in the prior week. Emerging market stocks emerged as the top performers during the five trading days through October 21, leading the rebound among proxy ETFs that represent major asset classes. Meanwhile, the only losers were foreign corporate bonds and commodities, which faced minor losses.
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● Quantitative Momentum: A Practitioner’s Guide to Building a Momentum-Based Stock Selection System
By Wesley R. Gray and Jack R. Vogel
Summary via publisher (Wiley)
This book demystifies momentum investing, bringing it from the realm of Wall Street to individual investors. Following the insights from Wesley Gray’s previous work on systematic value strategies, this guide elaborates on momentum investing, showcasing its proven capacity to outperform the market. Momentum investing is clarified as a distinct strategy apart from growth investing, and the book explores its psychological foundations and key methods, making it accessible for both institutional and private investors alike.
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