* High commodity prices are another factor that could delay rate cuts: World Bank * Pending US home sales rose much more than forecast in March * Jobless claims in US fall to lowest level in 9 weeks * US inflation picked up in the first quarter * US GDP growth slows more than forecast in the first quarter: The US 10-year Treasury yield rose to 4.71% on Thursday (Apr. 25), the highest since Nov. 1. The rise coincided with yesterday’s news that US economic growth was slower than expected while inflation remained firm, hinting at a higher risk of stagflation ..read more

Animal spirits have come off the boil lately, but these are still early days for deciding if risk-on sentiment for equities has hit a wall or is in a holding pattern that allows markets to consolidate the gains of late. The analysis arises from a set of ETFs to gauge the risk appetite, based on prices through yesterday’s close (Apr. 24). A key factor that could create trouble for stocks is the return of reflation pressures. So far, equities have been comparatively resilient. But further deterioration in bond prices will likely create stronger headwinds. Today’s review updates a profile from ea ..read more

* Forecasts are mixed for Friday’s PCE inflation data for March * Mining giant BHP offered to buy rival Anglo American in $39bn mega deal * Demand for mortgages drops as mortgage rates rise to highest since November * Solar manufacturers petition US to impose tariffs on Asian imports * US durable goods orders rose more than expected in March: US fertility rate falls to record low as fewer babies were born in America in 2023 than any year since 1979. The long-term effects of the trend could influence economic activity and government programs, such as Social Security, says Phillip Levine, an ec ..read more

The average 12-month trailing yield for the major asset classes has ticked up so far this year, based on a set of proxy ETFs through yesterday’s close (Apr. 23) vs. early January. Relative to Treasury yields, however, government bonds continue to offer higher payouts. The average trailing yield for risk assets is currently 3.89%, according to data from Morningstar.com. That’s slightly above the 3.81% mark when CapitalSpectator.com ran the numbers on Jan. 8. Once again, investors can find substantially higher yields in US government securities. For example, a 10-year Treasury currently yields 4 ..read more

* Fed likely to err on hawkish side of fewer rate cuts: Former Fed Vice Chair Clarida * China may face new wave of bond defaults, predicts S&P Global Ratings * Ether ETFs unlikely to receive US approval in May: Standard Charter * New US home sales surged in March despite high mortgage rates * US economic activity slows to 4-month low in April: PMI survey data: Correlation between US stocks and bonds has risen sharply recently, based on a rolling 3-year window, Morningstar reports. Reviewing the historical record, “The most acute spikes in correlation happened during concentrated periods o ..read more

The US economy appears on track to post softer growth in the first-quarter GDP report scheduled for release on Thursday (Apr. 25), based on the median for a set of nowcasts compiled by CapitalSpectator.com. Output for the January-through-March period is currently estimated at a 2.0% increase  (seasonally adjusted real annual rate), unchanged from the previous estimate published on Apr. 5. If correct, the moderate increase will mark another quarter of decelerating growth. The economy rose 3.4% in last year’s fourth-quarter, a downshift from the previous quarter. Despite another round of s ..read more

* US considers sanctions targeting some Chinese banks supporting Russia * US stock market decline has “further to go,” predicts JPMorgan analyst * Tech sector looks frothy, says head of world’s largest sovereign wealth fund * Eurozone economy growing again for first time since May 2023: PMI survey * Risk-parity strategy takes a beating, persuading investors to bail * US economic growth strengthened in March via Chicago Fed Nat’l Activity Index: Investors building up bets on rate hikes by the Federal Reserve. Although the estimated odds are still low for tighter policy decisions, “Options mark ..read more

In December I wondered if commodities were poised to be the contrarian trade of 2024. Four months later, there’s no competition across the major asset classes: commodities are the upside outlier by a wide margin, based on a set of ETFs through Friday’s close (Apr. 19). WisdomTree Enhanced Commodity Strategy Fund (GCC) is up nearly 15% year to date. The second-best performer in 2024 is the fast-deflating US stock market (VTI), which ended last week with a 3.7% rise. The other main takeaway in the chart above: most of the major asset classes are in the red so far this year. The deepest loss is ..read more

* Sticky inflation looks set for more confirmation in Friday’s PCE inflation data * Oil prices fall on Monday as as Iran-Israel tensions ease * China gold buying is a key reason for the metal’s recent rise * The cost of owning a home in the US is the highest on record: Redfin * US 10-year Treasury yield starts trading week near five-month high: The US Dollar Index rose on Friday (Apr. 19) to its highest level since November. “The dollar is strengthening for a combination of reasons,” says Claudio Irigoyen, head of global economics at Bank of America. “It’s not only the Fed saying that it is n ..read more

● Growth: A History And A Reckoning Daniel Susskind Review via Financial Times The book starts with a canter through centuries of muddled thinking. Thomas Malthus and his contemporaries thought that growth was inherently unsustainable, as a growing population would eventually run out of resources. Later, development economists at the World Bank sustained a “‘fetish’ for investment”, relying on models that saw physical capital — stuff that people could touch — as key for generating development. Most recently, there are “degrowthers”, who include the likes of activist Greta Thunberg and anthropo ..read more