From 1960 to November 2007 (the 2007-2009 recession started December 2007 according to NBER), real personal consumption expenditures grew at just about 3.5% trend growth. In this recovery, consumption as only mustered a growth rate just above 2%. Is this another permanent downshift in consumption growth or will consumption ratchet back up? Something we will be keeping an eye on.
Monday, December 23, 2013
Last week, the two factors with the highest R-squared to the market were correlation with the Yen and beta. Interestingly, there has been a very clear relationship when looking at stocks with high or low correlation with the Yen over the past year. The stocks with the highest correlation have performed much worse than the stocks with the lowest correlation. This, however, has not been the case when you are dissecting returns based on beta. There hasn't been much of a pattern that you can clearly identify over the past year.