Research & News
2020 Outlook Update #2: Storm Warning (March 27, 2020)
by Bill O’Grady & Mark Keller | PDF We have been updating our 2020 Outlook to keep you informed of our thoughts as conditions evolve. We have refreshed some of the charts from our update last week and added new comments, included below in bold. Update #2: March 27, 2020 | Update #1: March 16,… Read More »
Asset Allocation Weekly (March 27, 2020)
by Asset Allocation Committee We continue to monitor the path of the economy and markets as our expectations for a recession loom. This week we will update our S&P 500 earnings forecast for 2020. We use two components to build our forecast for S&P per share earnings. First, we need to estimate GDP. Normally, we use… Read More »
Weekly Energy Update (March 26, 2020)
by Bill O’Grady, Thomas Wash, and Patrick Fearon-Hernandez, CFA Crude oil inventories rose 1.6 mb compared to the forecast rise of 3.0 mb. In the details, U.S. crude oil production fell 0.1 mbpd to 13.0 mbpd. Exports fell 0.5 mbpd, while imports declined 0.4 mbpd. The inventory build was less than forecast due to a… Read More »
Weekly Geopolitical Report – On Optimization (March 23, 2020)
by Bill O’Grady In our discussions of COVID-19, we have noted that part of the reason the virus has been so disruptive is because the world has adopted a stance that optimization is an unalloyed positive. When I was in graduate school, I participated in a seminar with several professional private sector economists. A question… Read More »
Asset Allocation Weekly (March 20, 2020)
by Asset Allocation Committee During the recent market tumult, gold has performed rather well, until lately. This chart shows the nearest gold futures contract over the past year. From mid-January, when reports of COVID-19 began to circulate, gold prices marched steadily higher, making an intraday high of $1,704.30. Since then, this has declined by over $250… Read More »
Weekly Energy Update (March 19, 2020)
by Bill O’Grady, Thomas Wash, and Patrick Fearon-Hernandez, CFA Crude oil inventories rose 2.0 mb compared to the forecast rise of 3.5 mb. In the details, U.S. crude oil production rose 0.1 mbpd to 13.1 mbpd. Exports rose 1.0 mbpd, while imports rose 0.1 mbpd. The inventory build was less than forecast due to the… Read More »
Weekly Geopolitical Report – Renewed Fighting in Idlib (March 16, 2020)
by Patrick Fearon-Hernandez, CFA When financial markets get caught up in a crisis like the ongoing coronavirus panic, one underappreciated risk for investors is that they can get too distracted to notice other, longer-term problems that might be brewing. That’s why we take such a disciplined approach to monitoring geopolitical, economic, social and market events… Read More »
Keller Quarterly (March 16, 2020)
Letter to Investors The last three weeks of financial market turbulence have been among the most harrowing I’ve ever seen. To my memory it’s been a combination of October 1987 and October 2008, two months I’d prefer to forget. While the stock market was dropping sharply and quickly, U.S. Treasury bonds were soaring almost as… Read More »
2020 Outlook Update: Storm Warning (March 16, 2020)
by Bill O’Grady & Mark Keller | PDF Summary—High Probability of Recession: The economy is facing three simultaneous problems: A public health crisis—COVID-19 and the economic impact of containing it; An oil price war and a regional economic slump; Rapidly rising financial stress caused by (a) and (b) along with underlying unresolved issues. We estimate… Read More »