Research & News
Weekly Geopolitical Report – Generational Change in Cuba? (April 30, 2018)
by Bill O’Grady On April 18, the Cuban National Assembly elected Miguel Diáz-Canel as the new president of Cuba. On the following day, he was sworn into office. There has been much media conversation about a generational shift in Cuba. In this report, we will discuss the potential for change on the island nation, which has… Read More »
Daily Comment (April 30, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Happy Monday! It’s the last day of April (which felt more like early March temperature-wise). Here is what we are watching today: Trade week: There is a lot of trade action scheduled this week. First, the trade delegation is in China this week. Treasury Secretary Mnuchin,… Read More »
Asset Allocation Weekly (April 27, 2018)
by Asset Allocation Committee In our recent rebalance, the Asset Allocation Committee added a position in gold. There were two reasons behind the decision. First, we estimate that gold prices are undervalued compared to relevant fundamental factors. The chart on the left is our gold valuation model. It uses the balance sheets of the Federal Reserve… Read More »
Daily Comment (April 27, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] It’s a busy Friday. Here is what we are watching: Korean leaders meet: In a historic event, the leaders of North and South Korea met and Kim Jong-un became the first DPRK leader to visit the South since the war. The two leaders vowed to work… Read More »
Daily Comment (April 26, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] ECB: The statement was dovish. It indicated that balance sheet expansion is scheduled to end in September but actual tapering won’t start anytime soon. Interest rates were left unchanged and forward guidance was generally left unchanged, meaning rates are expected to stay low even after… Read More »
Daily Comment (April 25, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Equity market weakness continues this morning after a sell-off yesterday. The dollar is rising, boosted by the 10-year T-note definitively breaking 3%. Here is what we are watching this morning: Did Macron save the Iran deal? Probably not. Although it isn’t obvious what “plan B” is… Read More »
Daily Comment (April 24, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] It was an unusually quiet night. After a barrage of tweets recently, the president appears occupied with his French visitor for now, which might account for the current “tweet silence.” Earnings are coming in stronger than expected (see above), while Treasury yields remain elevated. Here is… Read More »
Weekly Geopolitical Report – Reflections on Globalization: Part III (April 23, 2018)
by Bill O’Grady This week, we will conclude our series on globalization with a discussion of how China and Russia threaten U.S. hegemony, the potential responses and close with market ramifications. China, Russia, the U.S. and Hegemony U.S. policymakers, heeding the Washington Consensus, assumed that developing nations would eventually adopt both market economics and representative democracy. … Read More »
Daily Comment (April 23, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] It was a very busy weekend. This morning, 10-year T-note yields briefly touched 3.00% and remain near that level. The dollar is higher on somewhat soft European PMI data. Here is what we are watching this morning: North Korean thaw: Kim Jong-un said his nation would… Read More »
Asset Allocation Weekly (April 20, 2018)
by Asset Allocation Committee The Trump administration has made it a key policy goal to reduce the trade deficit. The reasoning is that reducing the trade deficit will boost jobs in areas that have been adversely affected by foreign competition. Although this might be true (trade is very complicated), the risk is that trade restrictions will… Read More »