February 08, 2017
Houston – The new administration has kindled expectations of increased government spending, declining tax rates and stimulus-powered growth, according to latest edition of “the BRIEFING,” a Transwestern report that covers the global economy and commercial real estate.
“Rising employment and wages and relatively low interest rates should overcome some of the drags on the economy and produce solid but slow growth at least through 2017,” said Tom McNearney, chief investment officer. “Technological advances in robotics, artificial intelligence and healthcare will likely reverse the declining trend in productivity and lay the foundation for real growth over the intermediate term.”
FAST FACTS FOR THE BIG PICTURE
1. Italian voters rejected Prime Minister Matteo Renzi’s reform referendum, suggesting Brexit-like implications.
2. China’s exports and imports grew in November after months of decline, providing signs of stability.
3. The U.S. population grew 0.7% to 323.1 million in the 12 months ending July 1 – the slowest rate since the Great Depression.
4. Factory output nears prerecession levels, but factory employment lags the prerecession count by 1.5 million jobs, or about 20%.
5. To disrupt counterfeiting and tax-dodging cash transactions, the Philippines and Denmark are promoting electronic payments, the European Central Bank (ECB) plans to eliminate the 500-Euro note, and India declared 90% of its paper money no longer legal tender.
6. ECB extended bond buying until the end of 2017 but surprised markets with intent to slow the pace of purchases.
7. In third quarter 2016, bank earnings increased 12.9% from the prior year to $45.6 billion, while returns on assets rose to 1.10% from 1.03% a year earlier.
8. Global fund managers had a record $237 billion in dry powder at year-end 2016, more than double from 2012. The risk/return profile of debt funds has gained popularity through the recovery cycle.
9. Wal-Mart reported a 21% increase in e-commerce sales in the third quarter, along with 0.7% increase in foot traffic and 1.2% increase in same-store sales.
10. The Limited is closing all 250 brick-and-mortar stores; Macy’s is cutting 10,000 jobs and closing dozens of stores; Kohl’s reported lackluster sales; and Edward Lampert pumped $1 billion into Sears as life support.
11. Household wealth climbed to a record $90.2 trillion in the third quarter 2016.
12. The high-yield bond market is trading at a spread of approximately 4.2% over Treasuries, less than half the 8.64% spread during last February’s market slide.
13. CalPERS earned only 0.6% on investments in fiscal year 2016, missing its 7.5% target a second year in a row.
14. The Federal Reserve’s October 2016 opinion survey noted significant tightening of multifamily and moderate tightening of nonresidential lending standards.
15. Walker & Dunlop is exiting the CMBS market, citing low demand from core clients and higher capital costs associated with new risk retention rules.
Read the full report at http://twurls.com/briefing01-17.
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