Research & News
Asset Allocation Weekly (November 16, 2018)
by Asset Allocation Committee (NB: Due to the Thanksgiving holiday, the next report will be published on November 30.) Last year, 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 with commodity prices, initial claims and consumer… Read More »
Weekly Geopolitical Report – Reflections on the Khashoggi Incident: Part II (November 12, 2018)
by Bill O’Grady (NB: Due to the Thanksgiving holiday, the next report will be published on November 26.) Last week, we discussed the issue of succession in the Kingdom of Saudi Arabia (KSA). In Part II, we will begin with a discussion of the regional power rivalry between Turkey and the KSA, then outline Turkish President… Read More »
Asset Allocation Weekly (November 9, 2018)
by Asset Allocation Committee In light of rising interest rates, this week we will take a look at credit spreads. But, before doing that, it makes sense to examine overall Treasury valuation. This chart is our 10-year T-note model. It incorporates fed funds, the Japanese yen exchange rate, German sovereign 10-year yields, oil prices, the fiscal… Read More »
Weekly Geopolitical Report – Reflections on the Khashoggi Incident: Part I (November 5, 2018)
by Bill O’Grady Jamal Khashoggi, a well-connected Saudi journalist, entered the Saudi consulate in Istanbul on October 2nd and has not been seen since. His apparent death (at the time of this writing, no body has been produced) has caused an international incident. The assumed death of Khashoggi highlights a number of issues for the Middle… Read More »
Asset Allocation Weekly (November 2, 2018)
by Asset Allocation Committee In light of the recent pullback in equities, there has been rising speculation that the FOMC might not increase rates as much as projected. Although possible, we are not seeing much evidence to support this position. This chart shows the fed funds target along with the implied three-month LIBOR rate, two years… Read More »
Weekly Geopolitical Report – Return of the Strongman: Part II (October 29, 2018)
by Thomas Wash The populist wave has officially made its way to Brazil. In a blow to the establishment, Brazilian voters have elected former military officer Jair Bolsonaro as president. As Brazil continues to struggle with its recovery from the country’s worst recession in its history, the public has turned its back on the mainstream political… Read More »
Asset Allocation Weekly (October 26, 2018)
by Asset Allocation Committee One of the earliest lessons taught in statistics is that “correlation does not equal causality.” Any relationship that exists between two variables usually rests on a myriad of conditions; if any of these conditions change, correlations can break down rapidly. This doesn’t mean that correlation isn’t a useful tool but it show… Read More »
Weekly Geopolitical Report – Return of the Strongman: Part I (October 22, 2018)
by Thomas Wash On October 7th, Jair Bolsonaro, a far-right populist, made it out of the first round of presidential elections in Brazil in decisive fashion. A controversial figure within his country, Bolsonaro was able to build his popularity on the growing distrust of the government. Rising crime, corruption scandals and a record-breaking recession have led… Read More »
Asset Allocation Weekly (October 19, 2018)
by Asset Allocation Committee The accompanying notes to the release of the FOMC minutes on October 17th indicated expectations from a majority of members to eventually push fed fund rates above the level that they would otherwise view as neutral. In the most recent projections, the average of members’ estimates for the neutral level by 2021… Read More »
Keller Quarterly (October 2018)
Letter to Investors Here we are just a little more than three-quarters of the way through 2018. While many might regard this as a rather unusual year for the stock market, it really hasn’t been all that unusual. This is true even though the market is now experiencing its second downturn of greater than 5%… Read More »