Research & News
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 »
Weekly Geopolitical Report – The Dollar Problem: Part II (October 8, 2018)
by Bill O’Grady Last week, we introduced the characteristics of a reserve currency, including a discussion of the costs and benefits of providing the reserve currency. This week, we will conclude the report with a short explanation of the S.W.I.F.T. network and its importance to international finance. From there, we will discuss the potential competitors to… 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 »
Weekly Geopolitical Report – The Dollar Problem: Part I (October 1, 2018)
by Bill O’Grady In May, the Trump administration exited the Joint Comprehensive Plan of Action (JCPOA), otherwise known as the Iran nuclear deal.[1] In conjunction with its exit, the U.S. implemented new sanctions and the goal of U.S. policy is to reduce Iran’s oil exports to zero barrels by November. The other parties in the agreement,… 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 »
Weekly Geopolitical Report – The Venezuelan Migration Crisis: Part II (September 24, 2018)
by Bill O’Grady Last week, we discussed Venezuela’s economic and political situations. Part II begins with a discussion on migration with a focus on emigrant flows. We include an analysis of the problems caused by migration followed by an examination of the possible end to this crisis and the broader geopolitical issues. As always, we will… 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 »
Weekly Geopolitical Report – The Venezuelan Migration Crisis: Part I (September 17, 2018)
by Bill O’Grady Venezuela has gone from “bad to worse” in recent years. In 1999, Hugo Chavez was elected president and took the country on a journey into Cuba-style socialism. Persistent government intrusion into the economy reduced private sector involvement. Although the oil sector was able to generate enough revenue to allow Chavez to fund his… 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 »
Weekly Geopolitical Report – The Battle for Idlib (September 10, 2018)
by Bill O’Grady Two years ago, it looked as if Syrian President Bashar Assad was either about to be ousted from power or doomed to control an ever-shrinking area of Syria. Islamic State, Kurds and various rebel groups controlled much of what once constituted Syria. In fact, the frontier between Syria and Iraq was mostly a… Read More »