Research & News
Asset Allocation Weekly (January 19, 2018)
by Asset Allocation Committee Since the beginning of the year, long-term interest rates have moved higher. The constant maturity 10-year Treasury yield ended 2017 at 2.40%. That yield climbed to 2.60% in January, which is above our recently released 2018 Outlook forecast. We are not adjusting our forecast quite yet because the driving factor behind our… Read More »
Daily Comment (January 19, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EST] We are seeing continued strength in equities this morning and a modest decline in Treasuries. Here are some things worth noting today: Shutdown looming: Although a continuing resolution passed the House rather easily, it looks like a long shot for the Senate to pass a similar… Read More »
Daily Comment (January 18, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EST] We are seeing a modest retreat in equities this morning after a major rally yesterday. The dollar is weakening after rising yesterday as well. Here are some things worth noting this morning: China’s GDP: Although a highly manipulated number, last year’s GDP rose 6.9%, a bit… Read More »
Daily Comment (January 17, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EST] Financial markets were mostly quiet overnight. Yesterday turned out to be a rare down day for equities but futures are signaling a higher opening this morning. Treasury yields are modestly higher. Here is what we are watching this morning: A continuing resolution: Congressional leaders are likely… Read More »
Keller Quarterly (January 2018)
Letter to Investors Welcome to 2018! The stock and bond markets did much better in 2017 than most participants expected, by my reckoning. This has led to an unusually large proportion of the forecasts for this year predicting dire outcomes, also by my reckoning. Predicting the future is impossible, of course, but that doesn’t stop… Read More »
Daily Comment (January 16, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EST] Welcome back from the long weekend! In a sense, not much has changed—equity markets continue to move higher. Here are the news items of note: Germany’s political turmoil continues: The EUR has dipped this morning, a pause in a torrid appreciation, as two items are raising… Read More »
Asset Allocation Weekly (January 12, 2018)
by Asset Allocation Committee Last week, we issued an addendum to our 2018 Outlook[1] to take into account the recent tax law changes. Our top-down analysis suggests there will be a significant increase in corporate earnings which will translate into higher S&P 500 earnings. Our original forecast was for $129.82[2] for 2018; we have increased our… Read More »
Daily Comment (January 12, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EST] Coalition deal in Germany: This morning, Chancellor Merkel announced that an agreement has been reached to form a conservative coalition with the Social Democrats (SPD). This agreement will likely pave the way for Merkel to finally form a new government after months of negotiations following… Read More »
Daily Comment (January 11, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EST] Chinese pullback in Treasuries: Yesterday, citing an anonymous source, Bloomberg News reported that China is considering reducing or halting its purchases of U.S. Treasuries; China has since denounced the report as “fake news.” Initially, U.S. Treasuries, the dollar and U.S. equities fell on the news,… Read More »
Daily Comment (January 10, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EST] The problem with bonds: Bond yields jumped yesterday with the 10-year T-note yield breaching 2.55%, breaking 2.50% for the first time since March. There appear to be two catalysts behind the jump. First, the BOJ reduced its purchases of bonds; it should be remembered that… Read More »