Research & News
Asset Allocation Weekly (December 22, 2017)
by Asset Allocation Committee (N.B. This will be the last Asset Allocation Weekly for 2017. We thank our readers and wish them a Merry Christmas and Happy New Year. The next report will be published on January 5, 2018.) As equity markets continue to trend higher, there are always worries about how long the bull market… Read More »
Weekly Geopolitical Report – The 2018 Geopolitical Outlook (December 18, 2017)
by Bill O’Grady (N.B. This will be the last WGR of 2017. Our next report will be published January 8, 2018.) As is our custom, we close out the current year with our outlook for the next one. This report is less a series of predictions as it is a list of potential geopolitical issues that… Read More »
Quarterly Energy Comment (December 15, 2017)
by Bill O’Grady The Market Oil prices have recovered strongly from the mid-summer lows. It appears we are establishing a new trading range between $55 and $60 per barrel. This recovery was mostly caused by a steady decline in U.S. domestic crude oil inventories, a weak dollar and OPEC output discipline. We expect OPEC to… Read More »
Asset Allocation Weekly (December 15, 2017)
by Asset Allocation Committee Last week, the Federal Reserve released its Financial Accounts of the United States, formerly called the Flow of Funds report. It is a broad set of data that covers many aspects of the economy. Here we present some key charts from the report. This chart shows key private sector debt as a… Read More »
Weekly Geopolitical Report – Moving Fast and Breaking Things: Mohammad bin Salman, Part III (December 11, 2017)
by Bill O’Grady In Part I of this report, we began with a brief background of Mohammad bin Salman (MbS) and discussed the surprise arrests of many leading figures in Saudi society, including several members of the royal family, that occurred the weekend of November 4. In Part II, we examined the forced resignation of Saad… Read More »
Asset Allocation Weekly (December 8, 2017)
by Asset Allocation Committee We have received a number of requests to update our S&P 500/Fed balance sheet model. This chart shows the results from our S&P 500/Fed balance sheet model. We have projected the model’s forecast using the expected path of balance sheet reduction. It shows that the equity index tended to follow monetary policy… Read More »
Weekly Geopolitical Report – Moving Fast and Breaking Things: Mohammad bin Salman, Part II (December 4, 2017)
by Bill O’Grady Two weeks ago, we introduced this report and covered the mass arrests that took place in Saudi Arabia over the weekend of November 4, when several princes and notable figures were detained. The official reason given for the arrests was corruption, but many have speculated that the move was a cover for Mohammad… Read More »
Asset Allocation Weekly (December 1, 2017)
by Asset Allocation Committee Given the length of the current expansion, there is growing concern about the economy’s ability to avoid recession. So far, none of our indicators suggests the economy is near a downturn. Of all the indicators we monitor, the yield curve is the most reliable; however, there are potentially dozens of iterations of… Read More »
2018 Outlook (November 30, 2017)
by Bill O’Grady & Mark Keller | PDF Summary: Our baseline forecast for 2018 calls for no recession and real GDP growth of 2.25%, with faster growth in H1. Inflation should remain low, with the PCE staying under 2.0%. Labor markets will remain tight and wage growth will be constrained due to low inflation expectations.… Read More »
Weekly Geopolitical Report – Moving Fast and Breaking Things: Mohammad bin Salman, Part I (November 20, 2017)
by Bill O’Grady (N.B.: Due to the Thanksgiving holiday, the next edition of this report will be published December 4.) Last summer, King Salman surprised the Kingdom of Saudi Arabia (KSA) by demoting Crown Prince Muhammad bin Nayef and replacing him with one of the king’s sons, Mohammad bin Salman (MbS).[1] In the months preceding the… Read More »