● In December, the Eurozone consumer inflation rate saw a decline | Bloomberg
● Brent crude oil prices fell below $50 due to an oversupply and weak demand | Reuters
● Rising bond prices may indicate potential economic concerns | NY Times
● December marked a steady but slower expansion pace for US services firms | AP/WaPo
● The unemployment rate in Germany hit a record low in December | RTT
● Conversely, Italy’s jobless rate rose to a record high in November | RTT
Analysts predict that private nonfarm payrolls in the US will see an increase of 213,000 (seasonally adjusted) in the upcoming December ADP Employment Report. This forecast, derived from The Capital Spectator’s median point estimate, slightly exceeds November’s growth.
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The anticipated risk premium for the Global Market Index (GMI) has been on a downward trend throughout December. The GMI, which is an unmanaged, market-value weighted index of the major asset classes, is projected to yield an annualized return of 3.6% above the “risk-free” rate in the long run. This new estimate, reflecting data up to the end of last month, marks a decrease of 30 basis points from November’s projection of 3.9%. However, if the recent sharp declines in financial and commodity markets continue, we may see a rebound in GMI’s risk premium in the near future. Additionally, data indicates that GMI’s expected return over the risk-free rate diminished further last month.
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● The Dow dropped 331 points as oil prices fell below $50 | USA Today
● Eurozone PMI signals the slowest growth in over a year for Q4 | Markit
● Greece and Europe: which side will concede first? | Telegraph
● 2014 marks the best car sales figures in the U.S. since ’06 | Detroit News
● German inflation has fallen to its lowest level in five years | BBC
● Gold prices surged as investors sought safety, marking the longest rally since October | Bloomberg
In December, US real estate investment trusts (REITs) outperformed all major asset classes, with a rise of 1.9% according to the MSCI REIT Index. They also emerged as the top performer for the entire calendar year among major asset categories. Most other asset types recorded returns that were either flat or negative. Commodities, as measured by the Bloomberg-UBS Commodity Index, were the largest underperformer for both December and 2014. The US stock market ended December unchanged but saw a commendable annual gain of 12.6% (Russell 3000). Although this mark is softer compared to the robust returns in previous years, it remains above average in the long-term context.
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● Eurozone Sentix investor confidence rises to a five-month high | Investing.com
● The UK construction PMI has fallen to its lowest point since July 2013 | Reuters
● The euro has reached a nine-year low against the US dollar | BBC
● Jobless claims in Spain saw their most significant drop since 1998 | RTT News
● Samaras cautions about euro exit risks as the Greek campaign begins | Bloomberg
● Oil prices are at their lowest in five and a half years due to supply overload | Reuters
● Balanced Asset Allocation: How to Profit in Any Economic Climate
By Alex Shahidi
Summary from publisher (Wiley)
Traditional portfolios are often vulnerable to significant losses due to their lack of balance across various economic scenarios. A well-balanced portfolio, however, can help investors mitigate risks and achieve their goals more consistently. This essential truth may surprise many investors, both novice and experienced. Investment consultant Alex Shahidi draws upon his 15 years of experience with elite investors and managing multi-billion dollar portfolios to offer invaluable insights in this important resource.
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The Capital Spectator is taking a brief pause for the year and swapping its usual routine for a week in Italy. After the holiday season, filled with exploring the majesty of ancient Rome, enjoying local cuisine, and soaking in the rich cultural atmosphere of one of the world’s finest cities, The Capital Spectator will resume on January 5, 2015. Wishing everyone a joyous New Year ahead!
● Former Federal Reserve Governor Kohn: US economy appears strong for 2015, but… | Newsmax
● Japan’s 10-Year JGB yield reaches a new record low of 0.300% | MNI
● Japan’s inflation rate slows more than anticipated; industrial output unexpectedly declines | RTT
● November retail sales in Japan rise for the fifth consecutive month, though at a slower rate due to weather conditions | MNI
● Oil prices rise as conflict escalates around Libya’s largest port | Bloomberg
● The ruble has rebounded sharply from its lows as exporters sell dollars | Reuters
● Oil contracts indicate that traders are anticipating higher prices | Houston Chronicle
Merry Christmas
Happy Holidays
Frohe Weihnachten
Feliz Navidad
Kala Christouyenna
Buone Feste Natalizie
The news and updates provided capture the current economic landscape, focusing on key developments within the Eurozone and the United States. With insights into inflation rates, employment forecasts, and asset performance, these reports offer a comprehensive view of the prevailing financial conditions.
As 2015 begins, stakeholders should remain vigilant and adaptable to the ongoing changes in both economic indicators and market trends, facilitating informed decision-making in their investment strategies.
