06-01-2017, 02:06 PM
First-quarter U.S. economic growth was abysmal, but don’t worry. The economy will soon bounce back. That’s the view of most economists. As a group, they think second-quarter gross domestic product growth will come in at 2.5%, compared with 0.7% in the first quarter. But what if they’re all wrong? This is a lot more likely than you may think. After all, economists in the “bounce back” camp build much of their case on the strong labor market. This does make sense, on the surface. Consumer spending accounts for about two-thirds of the economy, and we are at full employment. The problem is, there are several early-warning signs that the consumer is in trouble, even if most people refuse to believe it. What’s more, China’s credit tightening, the impending blowup of a housing bubble in Canada and ongoing delayed economic reform in Washington will also weigh on U.S. growth.
The contrarian investor’s best bet is coming down the pike - MarketWatch
No area of the stock market has been hotter than tech since the election, and it seems investors still haven't gotten their fill. They poured $1.8 billion into the largest exchange-traded fund tracking the sector on Tuesday, the biggest single-day inflow since September 2010. That jibes with data compiled by Bank of America Merrill Lynch last week, showing that the group is on pace to absorb the most capital since the dot-com bubble 15 years ago.
Investors pouring billions into the hottest part of the stock market - Business Insider
Yet something related to the Brexit referendum—the tumble in the value of sterling—is now causing the economy to slow. The British economy is highly dependent on consumer spending. With inflation now nearing 3%, Britons’ “real” wages (ie, adjusted for inflation) are falling. That means that the average person can now buy less in the shops. And whereas in recent months Britons have papered over weak wage growth by borrowing, the latest figures from the Bank of England, published this morning, suggest that Britons are now taking a more cautious approach to their personal finances.
Postponed, not avoided: The Brexit slowdown is under way | The Economist
Proposed legislation currently being scrutinized by Congress poses a greater threat to the U.S. dollar's global reserve currency status than does any competing legal tender, according to ratings agency Fitch. The two pieces of draft legislation in question – the Federal Reserve Transparency Act (FRTA) and the Financial Choice Act (FCA) – are both aimed at restricting the independence of the Federal Reserve (Fed) and permitting greater political oversight of monetary policy.
Domestic politics is greatest threat to dollar’s global reign, says Fitch
Amazon.com Inc. has transformed businesses including retailing, filmmaking and data storage. But no one anticipated the bananas. It started with a brainstorm from founder and CEO Jeff Bezos that Amazon should offer everyone near its headquarters—not just employees—healthy, eco-friendly snacks as a public service. After considering oranges, Amazon picked bananas, and opened its first Community Banana Stand in late 2015.
Amazon’s Latest Market Disruption: 1.7 Million Free Bananas - WSJ