Research & News
Weekly Geopolitical Report – When Hegemons Fade (April 8, 2019)
by Bill O’Grady In our Daily Comment report, a section on Brexit has become something of a regular feature. As part of keeping up with developments, we have commented on nearly every twist and turn (or lack thereof) in the Brexit process. In a recent WGR series, we discussed the Irish problem[1] and how it relates… Read More »
Daily Comment (April 8, 2019)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Happy Monday! Although we are in spring, a massive winter storm is moving over the northern plains and will delay planting in the northern Corn Belt. It will also increase flooding in the major river systems in a couple of weeks. Here is what we… Read More »
Asset Allocation Weekly (April 5, 2019)
by Asset Allocation Committee Mortgage-backed securities have rather odd characteristics compared to Treasuries. At their most basic level, mortgages are bonds—prices are inversely related to yields. The pricing on mortgages assumes a certain level of refinancing activity. However, when yields rise, expected mortgage duration tends to extend because mortgage holders are less likely to refinance. When… Read More »
Daily Comment (April 5, 2019)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] It’s employment Friday! We cover the data in detail below, but the quick take is that it is a nearly perfect report. Payrolls recovered, unemployment remained low and wage pressures eased. Here is what we are watching today: Trade progress: President Trump[1] and Chairman Xi[2]… Read More »
Daily Comment (April 4, 2019)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Markets are quiet this morning; initial claims fell to a 49-year low. Here is what we are watching: Trade progress: President Trump and Vice Premier Liu are scheduled to meet at the White House today, a sign that trade talks are heading toward some sort… Read More »
Daily Comment (April 3, 2019)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] It’s a “risk-on” morning. Equities are up around the world. It’s also the 70th anniversary of NATO.[1] Here is what we are watching this morning: A trade deal with China: Reports suggest the U.S. and China are nearing an agreement on trade.[2] The two sides… Read More »
Daily Comment (April 2, 2019)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Markets are quiet after a strong rally yesterday. Here is what we are watching this morning: Turkey fallout: The stunning losses in local elections have put President Erdogan on notice—the economy is suffering and he needs to address the problem. Addressing a weakening economy with… Read More »
Weekly Geopolitical Report – Modern Monetary Theory: Part IV (April 1, 2019)
by Bill O’Grady In Part III, we examined the role of economic paradigms in the equality/ efficiency cycle. This week, we conclude this four-part series with a discussion on the flaws of Modern Monetary Theory (MMT) and market ramifications. The Flaws of MMT All of the major economic paradigms previously discussed lead to eventual problems. Capital-friendly… Read More »
Daily Comment (April 1, 2019)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] It’s the beginning of Q2 and April Fools’ Day. Equities are up around the world. Here is what we are watching this morning: China better, but elsewhere struggles: China’s manufacturing PMI data came in better than forecast;[1] the Caixin number for March was 50.8, exceeding… Read More »
Asset Allocation Weekly (March 29, 2019)
by Asset Allocation Committee Long-dated Treasury bonds have enjoyed a strong rally in recent weeks. Fears about future U.S. economic growth, falling global economic growth and a reversal in monetary policy expectations have all conspired to lower yields. The question now is whether or not yields have fallen more than is justified by the fundamental factors.… Read More »