Research & News
Asset Allocation Weekly (May 11, 2018)
by Asset Allocation Committee Recently, U.S. equities have outperformed emerging market equities. The chart above shows the relative performance of emerging market equities against U.S. equities. A rising line indicates that foreign equities are outperforming. Questions are being raised as to whether this recent decline is the end of what has been a strong relative uptrend… Read More »
Daily Comment (May 10, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] BOE meeting: The BOE results were neutral to hawkish. Rates were left unchanged, as expected, but the vote was 7-2 with the dissenters voting for a hike. The press conference and the statement were rather dovish, belying the vote. Markets took the results as moderately… Read More »
Daily Comment (May 9, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] There is a lot going on this morning. Let’s dig in: Iran: As expected, President Trump withdrew the U.S. from the multilateral nuclear agreement with Iran. Opinions on the move and projections of the decision’s impact vary widely. We will have more to say on this… Read More »
Daily Comment (May 8, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] It’s a quiet morning in a very busy week. Here is what we are monitoring this morning: The Iran deal: The president will announce his Iran decision at 2:00 (EDT). Although we expect him to end U.S. participation in the pact, it is unclear what he… Read More »
Daily Comment (May 7, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Good morning! Today was a relatively slow news morning but here are a few stories we are following: NAFTA negotiations: Today, trade representatives from Mexico, Canada and the United States will meet in Washington to discuss an agreement in principle for NAFTA. Currently, there appears to… Read More »
Asset Allocation Weekly (May 4, 2018)
by Asset Allocation Committee The continued rise in long-term interest rates, with the 10-year T-note breaking above a 3.00% yield, is becoming the focus of financial markets. Here is our updated 10-year T-note model. The model’s core variables are fed funds and the 15-year moving average of inflation, which we use as a proxy for inflation… Read More »
Daily Comment (May 4, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Happy Employment Day! We cover the data in detail below but the quick take is that it was weaker than expected. Although the unemployment rate fell to a new cycle low, it appears to be due to people leaving the workforce. The other major issue is… Read More »
Daily Comment (May 3, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] The FOMC: Yesterday, the FOMC decided to maintain interest rates. We currently expect three hikes this year, with the next rate increase coming in June. Although the recent core PCE report shows that inflation is only 10 basis points shy of the FOMC, we are… Read More »
Daily Comment (May 2, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Fed rate decision: Today, the Federal Reserve is expected to leave interest rates unchanged, but rising inflation and steady economic growth has led many to speculate that the Fed could raise rates as early as next month.[1] Presidential subpoena? In early March, Special Counsel Mueller… Read More »
Daily Comment (May 1, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Tariff extensions: Last night, President Trump announced he would extend the deadline for temporary trade tariff exemptions for U.S. allies by an additional 30 days. Earlier this year, citing national security concerns, President Trump placed trade tariffs on foreign steel and aluminum. The president wants… Read More »