Recent data from the ISM Manufacturing Index has sparked new concerns regarding the resilience of the U.S. economy. In December, this important indicator fell to 48.2 from 48.6 in November. This decline signifies the second consecutive month of readings below 50, which is typically indicative of economic contraction. In essence, U.S. manufacturing is currently at its weakest level in six years.
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● U.S. ISM Manufacturing Index in December dropped to its lowest level since 2009 | Bloomberg
● U.S. Manufacturing PMI reveals the weakest growth in December since 2012 | Markit
● Global Manufacturing PMI shows a minor decline in December, remains nearly unchanged | Markit
● U.S. construction spending fell in November, though still up year-over-year | MarketWatch
● U.S. consumer spending rose in December, reaching a multi-year peak | Gallup
● German unemployment decreased more than anticipated in December | Reuters
● The new Saudi-Iran crisis poses potential for wider escalation | Reuters
As we step into the new year, it’s time once again to share predictions for the future. There’s no real reason to assume that January brings better foresight than, say, April. Yet, the arrival of a new year often ignites a passion for forecasting. Whether right or wrong, we find ourselves inundated with fresh predictions. Perhaps some of them will prove accurate. Meanwhile, here’s a collection of recent forecasts to satisfy your curiosity…
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It’s official: 2015 was a challenging year for most major asset classes. Apart from a modest 2.5% total return in U.S. real estate investment trusts (REITs) and slight gains in U.S. stocks and investment-grade bonds, the past year delivered disappointing results across various global asset categories. For those who appreciate a bit of statistical analysis, let’s delve into the numbers.
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● U.S. jobless claims have reached a six-month high during the week ending December 26 | RTT
● The U.S. Consumer Comfort Index has improved as 2015 comes to a close | Bloomberg
● The Caixin China General Manufacturing PMI has dipped further into negative territory in December | Markit
● Eurozone manufacturing also concluded 2015 positively | Markit
● Germany’s manufacturing sector continues its upward trend as the year ends | Markit
● Saudi Arabia has severed ties with Iran, raising concerns in an unstable region | CNN
Presenting the third and final part of The Capital Spectator’s year-end review, highlighting some noteworthy titles featured in the weekly Book Bits column throughout 2015. For a more comprehensive overview, visit Part I and Part II. Cheers!
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The future remains uncertain,
but so far in this moment, the year has been promising.
Wishing everyone the best for 2016!
The final significant economic announcement for the U.S. in 2015 delivered a sobering message. Initial jobless claims surged more than anticipated, reaching a seasonally adjusted 287,000 for the week ending December 26—the highest figure since July, as reported by the Labor Department here. While jobless claims remain low by historical standards and are decreasing compared to the previous year, this latest update may indicate that this key leading indicator—having declined consistently over the past several years—might be nearing its limit. While this doesn’t necessarily mean a negative shift in the labor market outlook, it does suggest that the economic growth cycle, having persisted for over six years, might be showing signs of fatigue.
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● U.S. pending home sales in November have declined for the third time in four months | Reuters
● Puerto Rico announces it will default on certain bonds | NY Times
● Key Events to Watch in 2016: The Year Ahead | Bloomberg
● Outlook for global wealth in 2016 | The Economist
● Expected challenges in the oil market as we enter 2016 | CNBC
● States with the Hottest Housing Markets This Year | Fiscal Times
The two-year Treasury yield saw a significant spike yesterday (December 29), jumping to 1.09%—the highest level since April 2010, according to data from Treasury.gov. This rise in this critical rate, which is particularly sensitive to expectations around interest rate movements, suggests that market confidence is growing regarding the Fed’s likely continuation of tightening monetary policy throughout 2016.
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