Research & News
Weekly Geopolitical Report – What to do with China: Part I (January 28, 2019)
by Bill O’Grady Graham Allison published a controversial book in 2017 in which he argued that the probability for a major war increases when an established hegemon faces an emerging power that threatens the hegemon’s position. He used Thucydides, the Greek historian who wrote a history of the war between Sparta and Athens, as his model… Read More »
Daily Comment (January 28, 2019)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Welcome back; we are sure the Pro Bowl captured your attention over the weekend. There is a lot going on this week, including unemployment data, Chinese/U.S. trade meetings and Brexit votes in Parliament. The U.S. government has reopened, at least temporarily, and it’s going to get… Read More »
Asset Allocation Weekly (January 25, 2019)
by Asset Allocation Committee One of the important unknown factors for 2019 is whether slowing global growth will have a negative impact on the U.S. economy. Or, put another way, can the world lead the U.S. into recession? For the most part, history suggests the answer is no—the U.S. can bring down the world but the… Read More »
Daily Comment (January 25, 2019)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Equities are rallying around the world. Here is what we are watching this morning: Venezuela: As we noted yesterday, China and Russia[1] would be on the hook for billions of bad debt that a new government could simply default on, arguing the debt was incurred by… Read More »
Keller Quarterly (January 2019)
Letter to Investors If you’re like most investors, you’re probably delighted to see 2018 in the rearview mirror. It was a year in which the stock market began on a euphoric note, in a January that proved to be the last month of a nearly two-year rising market. Indeed, from February 2016 to late January… Read More »
Daily Comment (January 24, 2019)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Equities are rising modestly this morning. Here is what we are watching: Venezuela heats up: Venezuela has been a problem for a while. Its economy and government have essentially stopped functioning. Hyperinflation has set in. There is a massive exodus of Venezuelans[1] to other parts of… Read More »
Daily Comment (January 23, 2019)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] After a hard drop yesterday, equities are rising modestly this morning. Here is what we are watching: The importance of trade: Equity market action on Friday and Tuesday made it abundantly clear how focused financial markets are on trade. This is a five-day chart of the… Read More »
Daily Comment (January 22, 2019)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Welcome back from the long weekend. Equities are in the red this morning mostly on worries about global growth. Here is what we are watching today: The IMF, global growth and Davos: The IMF has reduced its world growth forecast to 3.5% for this year (down… Read More »
Asset Allocation Weekly (January 18, 2019)
by Asset Allocation Committee Equity markets struggled in 2018; although new highs were achieved twice during the year, volatility was elevated compared to 2017. This is a chart of the CBOE VIX index, a measure of implied volatility from the equity options market. An elevated VIX means implied volatility is high, which implies a wider dispersion… Read More »
Daily Comment (January 18, 2019)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Happy Friday! Equities are moving higher this morning. Here is what we are watching today: About those tariffs: Yesterday, equity prices were jolted higher on reports that the Trump administration was considering rolling back tariffs on China. This chart shows March S&P futures; note the jump… Read More »