Research & News
Asset Allocation Weekly (April 6, 2018)
by Asset Allocation Committee Recently, the three-month T-bill/Eurodollar spread (TED spread) has widened, raising concerns about financial stability. In this report, we will offer a primer on the spread and discuss its recent rise. The TED spread has two components; it’s a direction-of-rate spread and a flight-to-quality spread. Eurodollars (also known as LIBOR) represent dollar borrowing… Read More »
Daily Comment (April 6, 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 much weaker than expected. Payrolls came in well below forecast and the unemployment rate held steady compared to an expected small decline. The data should be taken with… Read More »
Daily Comment (April 5, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Equities rebounded strongly yesterday after an opening sell-off. So far, U.S. stocks are building on yesterday’s gains. Here is what we are watching this morning: As a point of reference: We have a weekly chart on the S&P 500 P/E ratio at the end of this… Read More »
Daily Comment (April 4, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Risk markets are down this morning on continued trade worries. Here are the key items we are watching this morning: Trade wars: The U.S. announced tariffs on $50 bn of Chinese imports[1] and China responded in kind. Goods included in China’s tariffs include most of the… Read More »
Daily Comment (April 3, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] We are seeing a bit of a recovery this morning after a hard sell-off yesterday. Here are our thoughts: This is mostly about technology: Tech companies have, until recently, had a reputation for good. Their goal seemed to be to improve our lives at apparently low… Read More »
Daily Comment (April 2, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] We are seeing a mixed market this morning—U.S. equity futures are lower as are Treasury prices, while commodities are higher. Much of Europe is closed today for Easter Monday. Here is what we are watching this morning: China retaliates…sort of: China slapped tariffs on 125 items,… Read More »
Asset Allocation Weekly (March 29, 2018)
by Asset Allocation Committee After peaking at 2872.87 on January 26, the S&P 500 has been in a corrective phase. The index fell just over 10% and has been range bound ever since, well below the aforementioned high. Here are the primary reasons equities have struggled: Valuations became a bit stretched: The P/E, as we calculate… Read More »
Daily Comment (March 29, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Risk assets are trending higher this morning in a quiet trade. Several markets are closed today for Holy Thursday and U.S. markets will be closed tomorrow for Good Friday. A number of European markets will close for Easter Monday. When a group of markets are closed… Read More »
Daily Comment (March 28, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Equities were weak around the world but we are seeing a mixed recovery in the early U.S. trade. Technology remains under pressure. Here is what we are watching today: Oops: Yesterday, we bravely opined that Kim Jong-un probably didn’t go to China. Well, today we get… Read More »
Daily Comment (March 27, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] It’s risk-on around the world so far today. Here is what we are watching: Is Kim in Beijing? Although a number of reports have speculated the leader of North Korea has traveled to China, this news has yet to be confirmed. If he did travel to… Read More »