The initial major economic report for March reveals that the economy continued its expansion last month, primarily driven by a noticeable uptick in manufacturing activity. The ISM factory index increased to 53.4, rising from 52.4 in February. A figure above 50 indicates that the manufacturing sector is growing.
March presented a mixed performance across major asset classes. REITs (MSCI REIT) emerged as the standout performer, achieving an impressive gain of 5.2%. This contrasts sharply with a 4.1% decline observed in a broad range of commodities (DJ-UBS Commodity). The global equity landscape also displayed considerable variation: U.S. stocks (Russell 3000) saw an increase of 3.1%, while developed foreign markets (MSCI EAFE) experienced a slight decrease of 0.5%, and emerging markets (MSCI EM) fell by 3.3% in March (in USD terms).
● Abundance: The Future Is Better Than You Think
By Peter H. Diamandis and Steven Kotler
Review via The New York Times
Diamandis presents a thesis supported by four key ideas. Firstly, advancements in technologies across computing, energy, and medicine are accelerating at an exponential rate, paving the way for breakthroughs previously thought unattainable. Secondly, these innovations empower grassroots innovators to make remarkable progress—most notably in vehicle design, healthcare, and synthetic biology—without substantial resources or manpower, reducing reliance on large corporations and governmental labs. Thirdly, a new wave of techno-philanthropists (like Bill Gates) is channeling their wealth into tackling pressing issues such as hunger and disease. Finally, the segment he refers to as “the rising billion”—the world’s impoverished—now possess the ability, thanks to technological advancements, to significantly alleviate their challenges. Diamandis asserts, “For the first time in history, this rising billion has the incredible potential to recognize, address, and implement their own solutions for abundance.”
Are you searching for fresh insights on risk metrics? Look no further. In my recent piece for Financial Advisor, I explore various alternatives to enhance or even replace the Sharpe ratio, the long-standing measure of investment risk. This article features in the March issue, but you can also find the online edition here.
According to the Bureau of Economic Analysis, consumer spending experienced a notable increase in February. However, the report also highlights a weakness in income growth during the same month, prompting concerns about the economic outlook.
It’s human nature to focus on facts that support one’s claims while downplaying those that contradict them. While everyone engages in this practice to some degree—often for reasons of brevity—there are limits to how much one can selectively present information. Overemphasizing this strategy can eventually erode your credibility. This is particularly evident among proponents seeking to revive the gold standard, who often overlook crucial counterarguments.
Initial jobless claims fell to a four-year low last week, as reported by the Labor Department. This trend indicates a strengthening labor market, potentially growing at a quicker pace than recent months. New claims decreased by 5,000 to a seasonally adjusted 359,000 for the week ending on March 24. Notably, today’s report reflects an annual data revision dating back to 2007, meaning current figures may not align with previous reports.
A Rational Reason for High Oil Prices
James Hamilton (Econobrowser) | Mar 28
“There is no rational reason for high oil prices,” states Ali Naimi, the Saudi Arabian Minister of Petroleum and Mineral Resources, in today’s Financial Times. However, a potential explanation could be that lower oil prices would likely lead to increased consumption, outpacing current production levels.
New Orders for Durable Goods rose by 2.2% last month, offsetting some of the damage from January’s sharp 3.6% decline. Although February’s rebound does not match the 4.2% surge from November or the 3.3% increase from December, it was sufficient to maintain a strong year-over-year growth pace of over 10%. This key indicator—identified by economist Bernard Baumohl
Recent reports indicate that personal disposable income growth is slowing down, a trend that could potentially jeopardize the ongoing economic recovery. Whether this shift has reached a critical tipping point remains a topic of debate. Consequently, Friday’s forthcoming report on income and spending for February will be scrutinized for insights regarding the future trajectory of the business cycle.
