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 Bi-Weekly – The Fed’s Other Policy Tool (March 18, 2024)
by the Asset Allocation Committee | PDF While the Federal Reserve’s dual mandate focuses on achieving maximum employment and stable prices, managing long-term interest rates has also played a significant role since the enactment of the Federal Reserve Act in 1977.[1] Recent actions have raised questions about the Fed potentially anchoring the 10-year Treasury yield… Read More »
Asset Allocation Bi-Weekly – Uranium Demand, Supply, and Investment Prospects (March 4, 2024)
by the Asset Allocation Committee | PDF In an important adjustment to our Asset Allocation strategies last October, we introduced an exchange-traded fund focused on uranium producers into our mid-cap equity exposure. At the time, we noted in our Asset Allocation Quarterly that the move aimed to take advantage of government policies around the world… Read More »
Asset Allocation Bi-Weekly – Who Wants US Treasurys? (February 20, 2024)
by the Asset Allocation Committee | PDF Before August 2023, the Treasury’s quarterly refunding rarely raised eyebrows. Investors readily snapped up US debt, and announcements were largely ignored by markets. However, Fitch Ratings’ surprise downgrade of the US credit rating from AAA to AA that month, just days after a $6 billion increase in the… Read More »
Asset Allocation Bi-Weekly – U.S. Oil Production at a Record High (February 5, 2024)
by the Asset Allocation Committee | PDF These days, because investors have so many different assets to buy in so many different financial markets, it can be easy to miss an important trend or change in trend. Indeed, that seems to be the case with crude oil, where the long stagnation in U.S. output after… Read More »
Asset Allocation Bi-Weekly – How Does Powell Define Restrictive Monetary Policy? (January 22, 2024)
by the Asset Allocation Committee | PDF Traditionally, the term “restrictive monetary policy” has been associated with a fed funds interest rate that is high enough to slow economic activity, but recent remarks from Federal Reserve Chair Powell suggest there may be a broader interpretation. Despite casting doubts on rate cuts just two weeks prior,… Read More »
Asset Allocation Bi-Weekly – A Pause That Refreshes? (December 4, 2023)
by the Asset Allocation Committee | PDF (Note: This is the final AABW of 2023; the next report will be published in January 2024.) In 1929, Coca-Cola® introduced the tagline “a pause that refreshes.” Although other advertising campaigns have come and gone, this line still sticks around in the public consciousness. And, it has moved… Read More »
Asset Allocation Bi-Weekly – Reflections on Earnings (November 20, 2023)
by the Asset Allocation Committee | PDF The third quarter’s earnings season is coming to a close and, once again, earnings beat expectations. In this report, we will take a more in-depth look at S&P 500 earnings and overall corporate earnings. This chart examines S&P 500 earnings on a four-quarter trailing basis. We have regressed… Read More »
Asset Allocation Bi-Weekly – The Inflation Adjustment for Social Security Benefits in 2024 (November 6, 2023)
by the Asset Allocation Committee | PDF Social Security was the second-largest contributor to the increase in the fiscal deficit in 2023 (behind only net interest on debt), accounting for $134 billion. Much of the increase in entitlement spending was due to the 8.7% surge in cost-of-living adjustments (COLAs), which was the largest jump since… Read More »
Asset Allocation Bi-Weekly – A Regime Change in Bonds? (October 23, 2023)
by the Asset Allocation Committee | PDF Jim Bullard, former president of the St. Louis Federal Reserve Bank, based his policy votes and economic analysis, in part, on a concept known as regimes. Our take on his concept is that an edifice of factors underly clearly observable correlations in markets, and when this edifice changes,… Read More »