Research & News
Asset Allocation Weekly (May 5, 2017)
by Asset Allocation Committee In our most recent quarterly asset allocation meetings, our analysis determined that emerging markets would not be added to the portfolios. Since this asset class has been this year’s best performer, some explanation is in order. One of the primary reasons we have refrained from adding emerging markets is the dollar’s strength.… Read More »
Weekly Geopolitical Report – Reflections on Trade: Part I (May 1, 2017)
by Bill O’Grady Donald Trump ran on a platform opposing free trade. Although Congressional support for free trade has been waning for some time, the general consensus among economists is that free trade makes the economy more efficient and supports global stability. However, the steady erosion of manufacturing jobs in the U.S. and the shrinking of… Read More »
Asset Allocation Weekly (April 28, 2017)
by Asset Allocation Committee Last week, we discussed the impact of reducing the size of the Federal Reserve’s balance sheet on stocks and bonds. This week we will discuss the effects of QE on monetary policy. The FOMC dropped rates to near zero by January 2009. Although European central banks (including the ECB) have since taken… Read More »
Keller Quarterly (April 2017)
Letter to Investors Perhaps you’ve heard it or felt it, but fear of financial market decline has become palpable among the public. It’s not just fear as reflected by TV shows or internet social media I’m talking about, but fear reflected by real people in conversation. I travel rather extensively, speaking to both advisors and… Read More »
Weekly Geopolitical Report – Between a Rock and a Hard Place: The Gibraltar Dilemma (April 24, 2017)
by Thomas Wash Days after Theresa May triggered Article 50 of the Lisbon Treaty, Brussels issued a nine-page document outlining its guidelines for Brexit negotiations. One of the guidelines gave Spain the authority to veto any deal between Gibraltar and the European Union (EU). The U.K. is currently recognized as holding sovereignty over Gibraltar and thus… Read More »
Asset Allocation Quarterly (Second Quarter 2017)
The economy continues on a stable path, along with relatively low levels of inflation. In this cycle, tighter Fed policy involves not only raising short-term rates, but also reducing the size of the Fed’s balance sheet. The magnitude of growth of the Fed’s balance sheet in recent years was unprecedented. Its reduction is also unprecedented.… Read More »
Asset Allocation Weekly (April 21, 2017)
by Asset Allocation Committee Last week, we discussed the impact of reducing the size of the Federal Reserve’s balance sheet on the economy. This week we will discuss the effects of QE on financial markets. The relationship between the balance sheet and equities seems rather straightforward; expanding the balance sheet appears to be clearly supportive for… Read More »
Asset Allocation Weekly (April 13, 2017)
by Asset Allocation Committee The most recent Federal Reserve minutes indicated that the U.S. central bank is preparing to reverse its experiment with quantitative easing (QE) by reducing the size of its balance sheet. Although the eventual desire to reduce the size of the balance sheet is no real surprise, the timing was unclear. It now… Read More »
Quarterly Energy Comment (April 11, 2017)
by Bill O’Grady The Market Since December, oil prices have been ranging between $48 and $55 per barrel. Prices and Inventories Inventory levels remain elevated, reaching historic highs. In the above charts, the one on the left shows the long-term inventory situation, while the chart on the right shows a 12-year history. Normal inventories would… Read More »
Weekly Geopolitical Report – The EU at 60: Part II (April 10, 2017)
by Bill O’Grady (Due to the Easter holiday, the next edition will be published April 24th.) Last week, we began our retrospective on the EU. This week we will examine the post-Cold War expansion of the EU, including a discussion of the creation of the euro and the Eurozone. With this background, we will analyze the… Read More »