Research & News
Asset Allocation Weekly (September 20, 2019)
by Asset Allocation Committee Interest rates have increased since early September. The 10-year T-note yield dipped to 1.45% in early September but has risen strongly since then. What has prompted this rise? Some of the rise appears to be caused by a revaluation of the path of monetary policy. The chart on the left shows the… Read More »
Weekly Geopolitical Report – Weaponizing the Dollar: The Nuclear Option, Part I (September 16, 2019)
by Bill O’Grady Last month, we wrote a two-part report on weaponizing the dollar.[1] The continued strength of the dollar has become newsworthy recently, prompting us to provide an update to those earlier reports and include an analysis of groundbreaking new legislation that was introduced in the Senate. In Part I of this report, we… Read More »
Asset Allocation Weekly (September 13, 2019)
by Asset Allocation Committee In recent reports, we have discussed the yield curve and its value in signaling the business cycle. One of the problems for investors with using the various permutations of the yield curve as a signaling device is that it gives such early warnings that it may not be all that useful. This… Read More »
Weekly Geopolitical Report – A Kashmir Sweater (September 9, 2019)
by Patrick Fearon-Hernandez, CFA Since coming to power in 2014, Indian Prime Minister Narendra Modi has shown a penchant for using surprise to launch new policies. In 2016, for example, his government announced a sudden replacement of large-denomination bank notes to fight crime and curtail the shadow economy. Modi’s latest shocker came early last month,… Read More »
Asset Allocation Weekly (September 6, 2019)
by Asset Allocation Committee In 2017, we introduced an indicator of the basic health of the economy and added it to the many charts we monitor to gauge market conditions. The indicator is constructed using commodity prices, initial claims and consumer confidence. The thesis behind this indicator is that these three components should offer a simple… Read More »
Asset Allocation Weekly (August 30, 2019)
by Asset Allocation Committee As various permutations of the yield curve invert, projections of recession are increasing. One of our favorites, the 10-year T-note/fed funds yield curve, has been inverted for three months. This chart shows the history of this yield curve; since 1960, every recession was preceded by an inversion of this indicator. However, that… Read More »
Quarterly Energy Comment (August 27, 2019)
by Bill O’Grady The Oil Market Since June, oil prices have held within a range of $50 to $60 per barrel. After a sharp decline in prices from late May into early June, due in part to a contra-seasonal build in inventories, inventories fell and oil prices rebounded. Rising tensions with Iran added to the… Read More »
Weekly Geopolitical Report – Meet Boris Johnson (August 26, 2019)
by Patrick Fearon-Hernandez, CFA (Due to the Labor Day holiday, our next report will be published on September 9.) The great forest fires that consumed swaths of the West in recent years have finally revealed the danger from a century of excessive fire suppression. Humanity’s natural drive to control the environment has left forests overgrown… Read More »
Asset Allocation Weekly (August 23, 2019)
by Asset Allocation Committee Recession worries have increased due to falling long-duration interest rates and the short-lived inversion of the two-year/10-year T-note spread. Although this spread is important, it is merely one in a whole series of permutations of the yield curve. Our preferred measure is the 10-year/fed funds spread because it measures the long end… Read More »