Asset Allocation Reports
Asset Allocation Quarterly (Fourth Quarter 2018)
The U.S. economy is stable and growing, with sentiment indicators remaining high. A recession is not included in our cyclical forecast. The Fed’s tightening policy has thus far had modest effects. We expect a continuation of increases in the fed funds rate in tandem with a reduction of the Fed’s balance sheet. Though unemployment is… Read More »
Asset Allocation Weekly (October 12, 2018)
by Asset Allocation Committee Politics is usually an uncomfortable topic for financial market analysts. The subject is fraught with high emotion, and being overly concerned about a specific political outcome can sometimes cloud judgement. At the same time, political trends offer insight into future policy changes that can affect financial market performance. For example, we have… Read More »
Asset Allocation Weekly (October 5, 2018)
by Asset Allocation Committee As the unemployment rate declines, there is a worry that wage growth may accelerate and lead to a wage-price spiral, forcing the FOMC to raise rates rapidly. Although possible, the key issue is slack in the labor market. Based on the unemployment rate, there would appear to be little; based on the… Read More »
Asset Allocation Weekly (September 28, 2018)
by Asset Allocation Committee Since late August, interest rates have been steadily rising. The 10-year T-note yield made its recent low at 2.82%[1] on August 4th. Since then, yields have moved above 3.00%. Our 10-year T-note model suggests rates are a bit elevated. This model includes fed funds and the 15-year moving average of inflation (a… Read More »
Asset Allocation Weekly (September 21, 2018)
by Asset Allocation Committee In this week’s report, we will focus on the U.S. economy. Since the 1987 crash every major equity market decline has coincided with a recession. Thus, we pay close attention to the economy with the goal of projecting the next recession. This expansion, which began in June 2009, is now the second… Read More »
Asset Allocation Weekly (September 14, 2018)
by Asset Allocation Committee Emerging markets have fallen in recent weeks. The decline is being driven by a couple of factors. First, the dollar has appreciated due to concerns that tariffs will restrict foreign country access to the U.S. consumer and the dollars they spend. In other words, if the U.S. restricts trade, countries will struggle… Read More »
Asset Allocation Weekly (September 7, 2018)
by Asset Allocation Committee Traditionally, the election season kicks off with Labor Day so, with last Monday’s holiday, the election cycle is upon us. The midterm election year tends to be lackluster for equities until Q4, when a strong rally usually develops. The data for this chart is developed by taking the weekly closes for the… Read More »
Asset Allocation Weekly (August 31, 2018)
by Asset Allocation Committee In light of the recent conviction of Paul Manafort and the guilty pleas by Michael Cohen, along with the upcoming midterm elections, we have been receiving questions about the political landscape going into winter. In this report, we will discuss our baseline expectations for political trends and their potential effect on financial… Read More »
Asset Allocation Weekly (August 24, 2018)
by Asset Allocation Committee What is price stability? The working definition for the Federal Reserve was crafted by Alan Greenspan in 1994, when he suggested that price stability has been achieved when “…households and businesses need not factor expectations of changes in the average level of prices into their decisions.”[1] In other words, a central bank… Read More »