Diversified Digest: June 26

June 26th, 2017 | posted in: Uncategorized

by: R. Samuel Fraundorf

Diversified Trust’s investment team brings you headlines of note for the week.  Click on the links to access the articles. 

We have talked about the fact that productivity has been lagging in this long-toothed recovery, impacting inflation and making the Federal Reserve’s job much harder.  Perhaps part of the reason is we are creating the wrong types of incentive for entrepreneurship, encouraging the wrong types of innovation.

While there could be a number of reasons for the phenomena, including the impact of big mergers driving inflation expectations lower, is seems that the Fed’s short term interest hikes are causing the long-term yield curve to believe they are actually stimulative!

A small change from a firm not everyone is familiar with could well have very large impacts on how capital is allocated and invested globally.  MSCI made a change this week and added Chinese equities traded in Shanghai and Shenzhen to its emerging market and global equity indices.

It has been thought that increasing household wealth was one of the objectives of the Federal Reserve as it employed its extraordinary measures to address the Great Financial Crisis.  However, research shows that wealth may be too narrowly considered to truly impact spending.  For the vast majority of U.S. households, income is more important in determining spending and confidence than their balance sheet.

Finally, what happens when you continue to improve online “bots” ability to communicate through negotiations?  Apparently, they learn how to lie.