Research & News
Daily Comment (March 23, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] It was a dark and stormy night for risk assets. However, we are seeing glimmers of light in U.S. equity futures as they have recovered their overnight losses and have turned positive. Here’s what we are watching: A budget deal: The budget deal passed Congress, meaning… Read More »
Daily Comment (March 22, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] It’s a risk-off morning so far. Equities are declining, Treasury yields are falling and the JPY is appreciating. The factors hitting risk markets are softer than expected PMI data (see table below) and trade fears. Here is what we are watching this morning: China trade: Tomorrow,… Read More »
Daily Comment (March 21, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] It’s Fed day! Here is what we are watching this morning: Powell speaks: The Fed meeting concludes today with virtual certainty of a 25 bps rate hike, taking the target to 1.75%. It should be noted that the target is actually the upper target rate; in… Read More »
Daily Comment (March 20, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Framing the Fed: The FOMC meeting begins today. Here we lay out the basic path for monetary policy. The chart on the left shows the implied three-month LIBOR rate, two years deferred, derived from the Eurodollar futures market. Note that the yield has increased dramatically… Read More »
Weekly Geopolitical Report – The North Korean Summit: Part I (March 19, 2018)
by Bill O’Grady On March 8, officials from South Korea, including Chung Eui-yong, the director of South Korea’s National Security Office, came to Washington to brief U.S. officials on a recent dinner with Kim Jong-un, the leader of North Korea. The dinner was held in Pyongyang at North Korea’s Workers’ Party Headquarters, Kim’s workplace, where Mr.… Read More »
Daily Comment (March 19, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Happy Monday! We are seeing weaker equity markets and rising Treasury yields this morning. There is a lot going on—let’s dig in: A Brexit deal: Negotiators for the U.K. and EU have announced they mostly have an agreement in place. Although some problems remain unresolved, mostly… Read More »
Asset Allocation Weekly (March 16, 2018)
by Asset Allocation Committee Last week, we discussed the fact that the generally strong economy should be supportive for equity markets as economic growth will tend to support earnings. However, the other important element of equity valuation is what multiple investors put on those earnings. The most common valuation metric is the price/earnings ratio (P/E). Our… Read More »
Daily Comment (March 16, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Happy Friday! Here is what we are watching this morning: The shakeup continues: Numerous media sources indicate that Gen. McMasters is on his way out as National Security Director. The most rumored replacement is John Bolton, a well-known hawk. If Bolton does get the job, the… Read More »
Daily Comment (March 15, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] It’s the Ides of March! Be careful out there. Markets were very quiet overnight. Here is what we are watching: Trump 2.0: As expected, Larry Kudlow is replacing Gary Cohn as NEC director. This should be a somewhat market supportive appointment. Kudlow isn’t an economic heavyweight;… Read More »
Daily Comment (March 14, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Here is what we are watching this morning: May responds: The Russians ignored Britain’s deadline so PM May is expelling 23 Russian diplomats, the biggest expulsion since the Cold War. Expect a similar response from Russia. This is an issue that bears watching. We expect that… Read More »