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

Israel’s widely anticipated retaliatory military strike on Iran arrived earlier today, putting markets on edge as investors weigh the implications. The potential for wider conflict hangs in the balance. Early reports, however, hint at the possibility that Israel’s attack is limited in an effort to avoid a wider war with Iran. There are also reports that indicate that Iran is minimizing the attack in official responses so far, which raise the possibility that an escalatory cycle of military strikes can be avoided. Nonetheless, these are early days and the situation remains precarious. For some ..read more

The only aspect of consistency in the market’s outlook for rate cuts lately has been pushing the expected date forward. Recent history falls in line with this trend and September is now seen as the earliest date for policy easing. Fed funds futures this morning (Apr. 18) are estimating a roughly 71% probability that the Federal Reserve will reduce its current 5.25%-5.50% target rate at the Sep. 18 meeting, based on CME data. Take it with a grain of salt, given the rise and fall of earlier tipping points. A month ago, for example, the odds-on favorite was a rate cut at the June 12 FOMC meeting ..read more

* Some economists now see rate cuts delayed until March 2025, * Fed’s Beige Book reports steady economic growth but slim progress on inflation * ‘Insatiable’ AI demand expected to lift Q2 sales for world’s biggest chipmaker * Climate change bill may reach $38 trillion a year by 2049, study finds * US dollar’s dominant reserve currency status likely to endure: Morgan Stanley US debt is a threat to the global economy, the International Monetary Fund warns. “Loose fiscal policy in the United States exerts upward pressure on global interest rates and the dollar,” says Vitor Gaspar, director of th ..read more

Bowing to recent data, Federal Reserve Chairman Jerome Powell on Tuesday conceded that inflation progress has stalled and the case for rate cuts has weakened. The Treasury market has been effectively making the same case for weeks, but when the top central banker says it out loud the crowd notices. “More recent data shows solid growth and continued strength in the labor market, but also a lack of further progress so far this year on returning to our 2% inflation goal,” Powell said at a conference yesterday (Apr. 16). “The recent data have clearly not given us greater confidence, and instead in ..read more

* Fed Chair Powell says there’s been a ‘lack of further progress’ on inflation * US expected to grow at double the rate of G7 peers in 2024, predicts IMF * Free-market policies are fading around the world, and that worries economists * US industrial output increased for second month in March * US housing starts in March fall to slowest pace in seven months: US 10-year Treasury yield rises to highest level since Nov. 6 after Fed Chairman Powell says inflation progress has stalled and so the outlook for rate cuts has faded. “Given the strength of the labor market and progress on inflation so fa ..read more