<div class="entry-content">
<p>In August, the US economy exhibited persistent sluggishness. While the risk of a recession seemed minimal during this month, a series of underwhelming updates on economic indicators in recent weeks indicates that the broader macro trend continues to face challenges.<br/><a href="https://www.capitalspectator.com/us-business-cycle-risk-report-21-september-2016/#more-8021" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
</div><!-- .entry-content -->
<footer class="entry-meta">
By James Picerno | <a href="https://www.capitalspectator.com/us-business-cycle-risk-report-21-september-2016/" title="6:38 am" rel="bookmark"><time class="entry-date" datetime="2016-09-21T06:38:19-04:00">September 21, 2016</time></a>
</footer><!-- .entry-meta --><div class="entry-content">
<p>Is the US economy caught in its own version of Dante’s Nine Circles of Hell? The answer is uncertain, but it appears increasingly likely that the economy may continue to limp along with lackluster growth without entering a formal <a href="http://www.nber.org/cycles/cyclesmain.html">NBER-defined recession.</a> In such a situation, the Federal Reserve would be unable to raise interest rates or “normalize” policy, leaving the economy in a perpetual state of dysfunction.<br/><a href="https://www.capitalspectator.com/is-the-business-cycle-dead-or-just-in-remission/#more-8018" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
</div><!-- .entry-content -->
<footer class="entry-meta">
By James Picerno | <a href="https://www.capitalspectator.com/is-the-business-cycle-dead-or-just-in-remission/" title="7:33 am" rel="bookmark"><time class="entry-date" datetime="2016-09-20T07:33:48-04:00">September 20, 2016</time></a>
</footer><!-- .entry-meta --><div class="entry-content">
<p>Last week, US stocks and bonds managed to record modest gains, even as other <a href="https://www.capitalspectator.com/major-asset-classes-august-2016-performance-review/">major asset classes</a> faced declines, as evidenced by a selection of representative ETFs.<br/><a href="https://www.capitalspectator.com/last-weeks-gains-limited-to-us-stocks-bonds/#more-8015" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
</div><!-- .entry-content -->
<footer class="entry-meta">
By James Picerno | <a href="https://www.capitalspectator.com/last-weeks-gains-limited-to-us-stocks-bonds/" title="6:16 am" rel="bookmark"><time class="entry-date" datetime="2016-09-19T06:16:50-04:00">September 19, 2016</time></a>
</footer><!-- .entry-meta --><div class="entry-content">
<p>● <a href="https://www.amazon.com/gp/product/1595231234/ref=as_li_tl?ie=UTF8&camp=1789&creative=9325&creativeASIN=1595231234&linkCode=as2&tag=thecapitalspe-20&linkId=64213c7892cde7c415b54f5b7aae14e4">The Upside of Inequality: How Good Intentions Undermine the Middle Class</a><img decoding="async" style="border: none !important; margin: 0px !important;" src="https://ir-na.amazon-adsystem.com/e/ir?t=thecapitalspe-20&l=am2&o=1&a=1595231234" alt="" width="1" height="1" border="0"/><br/>By Edward Conrad<br/><strong><a href="https://penguin.com.au/books/the-upside-of-inequality-9781595231239">Summary</a> via publisher (Portfolio)</strong><br/>Four years ago, Edward Conard published a controversial bestseller, *Unintended Consequences*, which clarified the financial crisis of 2008 and explored why U.S. growth was accelerating compared to other high-wage economies. He warned that loose monetary policy would not yield either growth or inflation and that expansionary fiscal policy would have no lasting positive impact post-crisis. Furthermore, he indicated that misguided attempts to regulate banking would hinder an already vulnerable recovery. Unfortunately, he proved to be correct. In this new book, he presents a provocative argument that the current fixation on income inequality is misguided and counterproductive to growth. Conard uses fact-based reasoning to trace how the economy is now constrained, not by labor or capital as in the past, but by a limited capacity for risk-taking and a lack of well-trained talent. He employs this fresh viewpoint to challenge the perspectives of liberal economists such as Larry Summers and Joseph Stiglitz and to debunk the myths surrounding “crony capitalism.”<br/><a href="https://www.capitalspectator.com/book-bits-17-september-2016/#more-8013" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
</div><!-- .entry-content -->
<footer class="entry-meta">
By James Picerno | <a href="https://www.capitalspectator.com/book-bits-17-september-2016/" title="7:25 am" rel="bookmark"><time class="entry-date" datetime="2016-09-17T07:25:00-04:00">September 17, 2016</time></a>
</footer><!-- .entry-meta --><div class="entry-content">
<p>Weaker-than-expected data continues to cloud the economic picture for the US in August. Retail sales and industrial output both declined last month; when examined year-over-year, these figures reveal a downside trend. Initial jobless claims, however, remain one positive aspect, though a recent report on August payrolls showed a significant slowdown in growth. While the broader trend for the US economy is still on track to remain positive, recent data indicate that growth may continue to be sluggish. Consequently, it is unlikely that the Federal Reserve will raise interest rates in the upcoming monetary policy meeting.<br/><a href="https://www.capitalspectator.com/rate-hike-odds-continue-to-dip-after-weak-us-economic-news/#more-8005" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
</div><!-- .entry-content -->
<footer class="entry-meta">
By James Picerno | <a href="https://www.capitalspectator.com/rate-hike-odds-continue-to-dip-after-weak-us-economic-news/" title="7:31 am" rel="bookmark"><time class="entry-date" datetime="2016-09-16T07:31:23-04:00">September 16, 2016</time></a>
</footer><!-- .entry-meta --><div class="entry-content">
<p>Mid-cap stocks are often regarded as the “sweet spot” within the market-capitalization spectrum for equity investors. Historical data supports this notion, as mid-cap stocks have consistently outperformed both large-caps and small-caps over the past two decades. This presents a contradiction to conventional financial theory, which suggests that small caps should outperform. However, the performance data from the last 20 years has defied this expectation, bestowing the title to mid-caps.<br/><a href="https://www.capitalspectator.com/the-mid-cap-equity-premium-is-still-king/#more-7999" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
</div><!-- .entry-content -->
<footer class="entry-meta">
By James Picerno | <a href="https://www.capitalspectator.com/the-mid-cap-equity-premium-is-still-king/" title="7:40 am" rel="bookmark"><time class="entry-date" datetime="2016-09-15T07:40:06-04:00">September 15, 2016</time></a>
</footer><!-- .entry-meta --><div class="entry-content">
<p>US equities experienced another challenging day yesterday; however, the sector momentum profile has recently strengthened with year-over-year changes. In contrast to recent trends, annual returns for sector funds have uniformly turned positive within a group of proxy ETFs. Notably, even the once-struggling energy sector is showing a respectable year-over-year increase.<br/><a href="https://www.capitalspectator.com/year-over-year-gains-prevail-for-us-sector-etfs/#more-7995" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
</div><!-- .entry-content -->
<footer class="entry-meta">
By James Picerno | <a href="https://www.capitalspectator.com/year-over-year-gains-prevail-for-us-sector-etfs/" title="6:19 am" rel="bookmark"><time class="entry-date" datetime="2016-09-14T06:19:17-04:00">September 14, 2016</time></a>
</footer><!-- .entry-meta --><div class="entry-content">
<p>Understanding why an investment strategy has faltered is as critical as recognizing the reasons behind its successes. This often-overlooked wisdom resonates after reading a recent <a href="http://www.bloomberg.com/news/articles/2016-09-12/seven-college-endowments-report-annual-losses-in-choppy-markets">Bloomberg article</a> reporting that seven large public university endowments posted disappointing results for the fiscal year ending June 2016. “It was a bit of a bloodbath,” remarked Jagdeep Bachher, chief investment officer for the University of California system. The lackluster performance stands out, especially considering a modest positive trend for the Global Market Index (GMI) — an unmanaged benchmark reflecting all <a href="https://www.capitalspectator.com/major-asset-classes-august-2016-performance-review/">major asset classes</a> by market-value weight — during the same period.<br/><a href="https://www.capitalspectator.com/a-teachable-moment-as-endowment-strategies-stumble/#more-7992" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
</div><!-- .entry-content -->
<footer class="entry-meta">
By James Picerno | <a href="https://www.capitalspectator.com/a-teachable-moment-as-endowment-strategies-stumble/" title="7:03 am" rel="bookmark"><time class="entry-date" datetime="2016-09-13T07:03:38-04:00">September 13, 2016</time></a>
</footer><!-- .entry-meta --><div class="entry-content">
<p>The sharp sell-off last Friday left most markets in the red for the week. However, commodities and foreign bonds (in unhedged US dollar terms) bucked the trend and registered gains, according to various proxy ETFs representative of the <a href="https://www.capitalspectator.com/major-asset-classes-august-2016-performance-review/">major asset classes.</a> A contributing factor to the improved pricing for offshore fixed income via ETFs was the slightly weaker dollar observed in last week’s trading.<br/><a href="https://www.capitalspectator.com/commodities-foreign-bonds-posted-gains-last-week/#more-7989" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
</div><!-- .entry-content -->
<footer class="entry-meta">
By James Picerno | <a href="https://www.capitalspectator.com/commodities-foreign-bonds-posted-gains-last-week/" title="6:22 am" rel="bookmark"><time class="entry-date" datetime="2016-09-12T06:22:17-04:00">September 12, 2016</time></a>
</footer><!-- .entry-meta --><div class="entry-content">
<p>● <a href="https://www.amazon.com/gp/product/0231175426/ref=as_li_tl?ie=UTF8&camp=1789&creative=9325&creativeASIN=0231175426&linkCode=as2&tag=thecapitalspe-20&linkId=dab9f148d231357b1f8bb6a3bc2860e2">Book of Value: The Fine Art of Investing Wisely</a><img decoding="async" style="border: none !important; margin: 0px !important;" src="https://ir-na.amazon-adsystem.com/e/ir?t=thecapitalspe-20&l=am2&o=1&a=0231175426" alt="" width="1" height="1" border="0"/><br/>By Anurag Sharma<br/><strong><a href="https://cup.columbia.edu/book/book-of-value/9780231175425">Summary</a> via publisher (Columbia University Press)</strong><br/>Financial markets can be chaotic, filled with unsubstantiated opinions, gossip, and misleading information. In *Book of Value*, Anurag Sharma delves into investor psychology and instructs readers on how to use business analysis techniques to navigate and decipher the complexities of financial markets. Blending philosophy with practical knowledge, Sharma outlines a holistic approach to creating high-performing stock portfolios.<br/><a href="https://www.capitalspectator.com/book-bits-10-september-2016/#more-7987" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
</div><!-- .entry-content -->
<footer class="entry-meta">
By James Picerno | <a href="https://www.capitalspectator.com/book-bits-10-september-2016/" title="6:45 am" rel="bookmark"><time class="entry-date" datetime="2016-09-10T06:45:57-04:00">September 10, 2016</time></a>
</footer><!-- .entry-meta -->