Saturday , August 17 2019
Home / The Capital Spectator
The author James Picerno
James Picerno
James Picerno is a financial journalist who has been writing about finance and investment theory for more than twenty years. He writes for trade magazines read by financial professionals and financial advisers. Over the years, he’s written for the Wall Street Journal, Barron’s, Bloomberg Markets, Mutual Funds, Modern Maturity, Investment Advisor, Reuters, and his popular finance blog, The CapitalSpectator.

The Capital Spectator

Book Bits | 17 August 2019

● Kochland: The Secret History of Koch Industries and Corporate Power in America By Christopher LeonardReview via The New Yorker If there is any lingering uncertainty that the Koch brothers are the primary sponsors of climate-change doubt in the United States, it ought to be put to rest by the publication of “Kochland: The Secret History of Koch Industries and Corporate Power in America,” by the business reporter Christopher Leonard. This seven-hundred-and-four-page tome doesn’t...

Read More »

The Bond Market’s All-In On Its Recession Forecast

Mounting recession worries of late have taken a bite out of stocks, but heightened fears that an economic contraction may be near has lit a fire of buying for US bonds. Long bonds in particular have soared recently, delivering stellar results, as shown by a set of exchange-traded funds representing the major slices of the US fixed income market. Two funds on our list stand out for year to performance: iShares 20+ Year Treasury Bond (TLT) and Vanguard Long-Term Corporate Bond...

Read More »

Macro Briefing | 16 August 2019

Trump defends his economic policy as recession worries mount: ReutersN. Korea launches missiles and rejects talks with S. Korea: BBCEconomists raise US Q2 GDP growth outlook to median +2.1%: CNBCSt Louis Fed President: inverted yield curve bearish only if it persists: CNBCUS jobless claims rose to 6-week high last week: MWUS homebuilder optimism strengthens in August: HousingWireUS manufacturing output fell in July following two months of growth: ReutersFed bank mfg surveys strenghen...

Read More »

And Then There Were Two (Inverted Yield-Curve Recession Signals)

One of the crowd’s favorite yield curve pairings (the spread on 10-year less 3-month Treasuries) has been signaling elevated US recession risk since May. As of yesterday (Aug. 14), the 10-year/2-year spread has gone over to the dark side too. That alone doesn’t insure that economic output will slump in the near term, but it’s a clear message that the crowd has increased its collective bet that a US downturn is approaching. It’s all about the market’s probability estimates...

Read More »

Macro Briefing | 15 August 2019

China set to retaliate against new US tariffs: BloombergTrump suggests ‘personal meeting’ with China’s Xi over Hong Kong crisis: CNBCWarning signs suggest global economic slowdown is accelerating: WSJChinese paramilitary exercise near Hong Kong — a ‘clear warning’: ReutersUS moves to block release of Iranian oil tanker in Gibraltar: CNNBusiness inflation expectations steady at 2.0% in August: Atlanta FedUS import prices rose in July but trend remains weak: Reuters10yr-2yr Treasury...

Read More »

It’s An Expansion, If You Can Keep It

President Trump’s decisions on the US-China trade war reflect a method to the madness, his supporters insist. To everyone else, it just appears to be madness. Regardless, Trump’s abrupt announcement on Tuesday that new tariffs on Chinese goods would be delayed inadvertently provided some clarity on the US economy. Soon after the news was released, US stocks surged. The implication: a fair amount of the recent weakness in US economic growth is bound up with the US-China trade...

Read More »

Macro Briefing | 14 August 2019

Trump delays Chinese tariffs, igniting stock market rally: WSJChina refuses port visits in Hong Kong for US warships: BloombergCalm returns to Hong Kong airport after protests: CNN Five of world’s major economies at risk of recession: CNN German economy contracted in second quarter: BBCChina’s industrial production in July posts slowest growth since 2002: ReutersUS small business optimism ticked up in July, close to post-recession high: NFIBUS core consumer inflation edged higher in...

Read More »

Bond Market Smells Recession. Will The Real Economy Follow?

Asset pricing is often mysterious as a source of figuring out exactly what Mr. Market is discounting, but in the case of bonds these days there’s no ambiguity about the crowd’s outlook. Recession is effectively a forgone conclusion, the yield curve is predicting. But while the real economy has slowed, growth remains strong enough to dispute the market’s forecast, at least for now. The question is when or if the hard data will align with market’s dark expectations? Let’s start...

Read More »

Macro Briefing | 13 August 2019

Hong Kong leader: protests have unleashed ‘chaos and panic’: ReutersFears of Argentina’s default trigger widespread selling: BloombergWill Trump’s crackdown on immigration damage California’s economy? LA TimesChina’s central bank weakens yuan/$ midpoint reference rate for 4th day: CNBCGerman economic survey indicates ‘significant deterioration’ in outlook: ZEW60% of S&P 500 stocks offer dividend yield above 10-year Treasury yield: WSJBond market’s recession signal set to strength...

Read More »

US Real Estate Investment Trusts Led Markets For Second Week

Real estate shares are on a roll. For a second week, real estate investment trusts (REITs) posted the strongest weekly gain for the major asset classes, based on performances via a set of exchange-traded funds. The leading gain is no mean feat when you consider that risk-off sentiment has returned lately and bond prices have surged. Vanguard Real Estate (VNQ) popped 1.7% for the week of trading ended Friday, Aug. 9. The gain marks the third straight weekly advance and the...

Read More »