Research & News
Asset Allocation Weekly (September 16, 2016)
by Asset Allocation Committee Since the beginning of September, 10-year T-note yields have risen from a low of 1.52% to a high of 1.75%. This backup in yields is as issue we are monitoring carefully because we have favored long-duration assets for some time. We analyze long-dated interest rates by starting with a fair value assessment… Read More »
Weekly Geopolitical Report – After Karimov (September 12, 2016)
by Bill O’Grady On August 29, the president of Uzbekistan, Islam Karimov, died from a cerebral hemorrhage. Karimov had been in office since the founding of Uzbekistan following the fall of the Soviet Union. Given his long tenure in office and the uncertainty that always surrounds the transfer of power in an authoritarian regime, there are… Read More »
Asset Allocation Weekly (September 9, 2016)
by Asset Allocation Committee Milton Friedman postulated that inflation expectations are established through a lifetime of experience. To some extent, the issue of inflation expectations is similar to other market gauges in our lives, such as the level of financial markets, interest rates and home prices. What we have experienced is considered as “normal” in our… Read More »
Asset Allocation Weekly (September 2, 2016)
by Asset Allocation Committee At the recent Kansas City FRB’s gathering at Jackson Hole, the tone from policymakers turned surprisingly hawkish. Vice Chair Stanley Fischer was quoted as saying that two rates hikes are possible this year and the upcoming FOMC meeting in September could generate a rate hike if the payroll numbers are on trend. … Read More »
Weekly Geopolitical Report – What’s Putin up to? (August 29, 2016)
by Bill O’Grady Over the past few months, Russian President Vladimir Putin has been unusually active on multiple fronts. He has expanded his military operations in the Middle East in support of Syrian President Assad, boosted troop strength on the Ukrainian border and conducted a major purge and restructuring of the Russian government. He has also… Read More »
Asset Allocation Weekly (August 26, 2016)
by Asset Allocation Committee As we noted last week, equity markets are trading at the upper end of the range defined by the relationship between the Federal Reserve’s balance sheet and equities. To some extent, the level of the relationship is somewhat less important than what the expanded balance sheet signals, which is that monetary policy… Read More »
Weekly Geopolitical Report – Thinking about Thinking: Part II (August 22, 2016)
by Bill O’Grady Last week, we examined the three types of statements deemed true. This week we will discuss the appropriate assignment of these statements and the dangers in their inappropriate use. We will conclude with how investors can use this analysis. As an aside, these last two WGRs have examined a broad topic outside the… Read More »
Asset Allocation Weekly (August 19, 2016)
by Asset Allocation Committee U.S. equity markets are showing impressive strength. This chart shows the S&P 500 Index along with the 200-day moving average. The white horizontal line shows recent highs; note that the S&P 500 has recently moved above these highs. Technically, this is a “breakout” and suggests the market will likely move higher. Still,… Read More »
Weekly Geopolitical Report – Thinking about Thinking: Part I (August 15, 2016)
by Bill O’Grady We are in the “dog days” of summer. The world is in turmoil. The U.S. presidential elections offer us a stark choice between a traditional establishment candidate and a populist alternative. Populism is on the rise in Europe, exhibited by the Brexit vote. Lone wolf terrorist attacks seem to occur with frightening regularity. … Read More »
Asset Allocation Weekly (August 12, 2016)
by Asset Allocation Committee We originally published the comments below in our Daily Comment on July 27. However, we have received a number of questions on the widening of the TED spread and the rise in LIBOR to warrant updating the report for this week’s Asset Allocation Weekly. There has been some curious behavior in the… Read More »