Research & News
Daily Comment (August 12, 2019)
by Bill O’Grady, Thomas Wash, and Patrick Fearon-Hernandez, CFA [Posted: 9:30 AM EDT] It’s an August Monday. Equities are under pressure again this morning and risk assets, in general, are weaker. Here is what we are watching: China and the dollar: For the third consecutive day, the PBOC fixed the CNY/USD exchange rate above 7. … Read More »
Asset Allocation Weekly (August 9, 2019)
by Asset Allocation Committee Since the end of WWII, there have generally been three factors that have caused recessions. The first, and most important, is policy error. Although fiscal tightening can cause recessions, major tax increases have become less common. The usual source of policy error comes from the monetary side, where the central bank either… Read More »
Daily Comment (August 9, 2019)
by Bill O’Grady, Thomas Wash, and Patrick Fearon-Hernandez, CFA [Posted: 9:30 AM EDT] Happy Friday! Equities are giving back some of yesterday’s stronger gains. The Italian government is near a collapse. U.K. economy disappoints. U.S. holds off on tech decisions. And, five decades ago today, the famous album cover photo of Abbey Road was snapped. … Read More »
Daily Comment (August 8, 2019)
by Bill O’Grady, Thomas Wash, and Patrick Fearon-Hernandez, CFA [Posted: 9:30 AM EDT] Good morning! Markets are relatively quiet this morning after an impressive reversal in the equity markets yesterday. We are seeing a backup in bond yields in the past hour on reports Germany may finally be considering fiscal expansion. Here is what we… Read More »
Daily Comment (August 7, 2019)
by Bill O’Grady, Thomas Wash, and Patrick Fearon-Hernandez, CFA [Posted: 9:30 AM EDT] Good morning! Risk assets are rising again this morning. Central banks make a splash; gold continues to march higher. Trade conflict with China remains front and center. Here are the details: Central bank surprise: The Reserve Bank of New Zealand, the Reserve… Read More »
Daily Comment (August 6, 2019)
by Bill O’Grady, Thomas Wash, and Patrick Fearon-Hernandez, CFA [Posted: 9:30 AM EDT] Good morning! Risk assets are getting a bounce this morning. Trade conflict with China remains front and center. Here are the details: Currency manipulator: The Treasury has officially designated China a “currency manipulator.” This designation isn’t as big a deal in reality… Read More »
Weekly Geopolitical Report – Turkey Lashing Out (August 5, 2019)
by Patrick Fearon-Hernandez, CFA Here at Confluence, we write a lot about the rise and fall of hegemonic states – those great nations that develop enough power and influence to dominate the global economy, or at least some region of it. These superpowers use their extraordinary military might and other levers to impose order on… Read More »
Daily Comment (August 5, 2019)
by Bill O’Grady, Thomas Wash, and Patrick Fearon-Hernandez, CFA [Posted: 9:30 AM EDT] It’s Monday, but far from a happy one. Global equity markets are taking a beating while interest rates continue to decline. Geopolitical tensions are rising in several theaters. The U.S. is dealing with two mass shootings. And, the Haj begins today. Here… Read More »
Asset Allocation Weekly (August 2, 2019)
by Asset Allocation Committee As wages and other costs rise and pricing power appears constrained, there are reasonable worries about the path of corporate earnings. We use purely top-down analysis to forecast earnings. Essentially, we forecast the percentage of total S&P company earnings relative to GDP. We use the nominal GDP forecast from the Philadelphia FRB’s… Read More »
Daily Comment (August 2, 2019)
by Bill O’Grady, Thomas Wash, and Patrick Fearon-Hernandez, CFA [Posted: 9:30 AM EDT] Happy Friday employment day! We cover the data in detail below but the snapshot is generally in line with expectations. Payrolls were 164k, nearly bang on forecasts of 165k, although revisions lowered payrolls by a net 32k. The unemployment rate was unchanged… Read More »