Asset Allocation Bi-Weekly
Confluence Investment Management offers various asset allocation products which are managed using “top down,” or macro, analysis. We publish asset allocation thoughts on a bi-weekly basis, updating the piece every other Monday.
Asset Allocation Weekly – Don’t Call It a Comeback! (September 17, 2021)
by the Asset Allocation Committee | PDF Last week, the federal government’s enhanced unemployment benefits of up to $300 per week expired nationwide. It has been speculated that the end of these benefits could lead to a surge of new entrants into the labor market. However, data from the Bureau of Labor Statistics (BLS) suggests… Read More »
Asset Allocation Weekly – Powell and Fed Independence (September 10, 2021)
by the Asset Allocation Committee | PDF Chair Powell’s term as leader of the FOMC comes to an end in early February 2022. It appears likely, at this time, that he will be reappointed for another four-year term. Decision markets currently put the odds of another term at 85%. Given all the policy actions that… Read More »
Asset Allocation Weekly – Are Strong Profits Sustainable? (September 3, 2021)
by the Asset Allocation Committee | PDF (Note: due to the upcoming Labor Day holiday, there will not be an accompanying podcast episode this week.) With the first update of Q2 GDP, the Commerce Department released its corporate profits for the economy. Using after-tax profits, which exclude inventory adjustment and depreciation, profits relative to GDP… Read More »
Asset Allocation Weekly – This Recovery is Different (August 27, 2021)
by the Asset Allocation Committee | PDF Since the Federal Reserve was granted independence in 1951 there have been 11 recessions. Although each recession and recovery are somewhat unique, analysts tend to compare them for clues about future economic activity and policy actions. In terms of monetary policy, Chair Powell has staked out a dovish… Read More »
Asset Allocation Weekly – The Impact of Older Americans on the Labor Market (August 20, 2021)
by the Asset Allocation Committee | PDF In analyzing the path for the economy, an important factor is separating the temporary effects of the pandemic from those that are longer lasting. The debate over whether inflation will be transitory is tied to this determination. The impact on the labor markets is another element. One change… Read More »
Asset Allocation Weekly – Intellectual Property Takes Over Fixed Investment (August 13, 2021)
by the Asset Allocation Committee | PDF It’s probably no surprise to anyone that information processing has become a bigger and bigger part of the economy over the last several decades. By now, we’ve all gotten used to seeing new kinds of computers and telephones every year, and we’ve struggled with learning new software programs… Read More »
Asset Allocation Weekly (August 6, 2021)
by the Asset Allocation Committee | PDF In last week’s report, we updated our views on long-duration Treasuries, using our standard 10-year T-note model. This week we are going to examine the impact of policy on long-duration Treasuries. First, let’s start with the model. The two most important variables in the model are fed funds… Read More »
Asset Allocation Weekly (July 30, 2021)
by the Asset Allocation Committee | PDF One of the key developments in financial markets recently has been the quick rebound in bond prices and the associated drop in yields. As investors started to sense faster economic growth and the prospect of rising inflation in the first quarter, they eagerly sold down their bond holdings,… Read More »
Asset Allocation Weekly (July 23, 2021)
by the Asset Allocation Committee | PDF The availability of ample investment capital is vital for economic growth in both rich, well-developed countries and poorer developing nations. However, if the available capital is poorly utilized and/or debt levels get too high, the results can be quite negative. In such a situation, economic growth can slow… Read More »