Research & News
Daily Comment (May 22, 2017)
by Bill O’Grady, Kaisa Stucke, and Thomas Wash [Posted: 9:30 AM EDT] The news over the weekend was fairly quiet, although there were several things we noted: The first leg of the president’s trip went rather well: President Trump offered support to authoritarians in Egypt and the Gulf State which was well received. Iran was isolated as… Read More »
Asset Allocation Weekly (May 19, 2017)
by Asset Allocation Committee One of the significant “known/unknowns” is the true condition of the labor market. The below chart highlights the issue. The blue line is the unemployment rate, while the red line is the employment/population ratio (scale inverted). From 1980 until 2010, these two series closely tracked each other. During the period since the… Read More »
Daily Comment (May 19, 2017)
by Bill O’Grady, Kaisa Stucke, and Thomas Wash [Posted: 9:30 AM EDT] After a week of tumult, things appear rather quiet this morning. Equities have a bullish tone after a drop midweek. Oil prices are up as OPEC officials meet to prepare for next week’s policy setting meeting. There are hopes that the broader cartel can… Read More »
Daily Comment (May 18, 2017)
by Bill O’Grady, Kaisa Stucke, and Thomas Wash [Posted: 9:30 AM EDT] One question we have been getting for the past couple of months is, “How can the equity market keep rising in the face of all this political turmoil?” The standard answer is that financial markets focus on the economy, market fundamentals, etc. and only… Read More »
Daily Comment (May 17, 2017)
by Bill O’Grady, Kaisa Stucke, and Thomas Wash [Posted: 9:30 AM EDT] The political problem du jour is that former FBI Director Comey apparently kept memos and notes of his meetings and phone contacts with President Trump. This is standard practice in bureaucracies. Writing “memos for the file” is a way to preserve one side of… Read More »
Daily Comment (May 16, 2017)
by Bill O’Grady, Kaisa Stucke, and Thomas Wash [Posted: 9:30 AM EDT] Another controversy…the Washington Post[1] reported late yesterday that President Trump revealed highly classified information to the Russian foreign minister and ambassador. Although not illegal (the president essentially can determine the distribution and classification of information), the decision to share the intelligence is potentially reckless. … Read More »
Weekly Geopolitical Report – Reflections on Trade: Part III (May 15, 2017)
by Bill O’Grady This week, we continue our discussion on trade by examining the reserve currency issue. What is the reserve currency? When a country runs a trade surplus, it creates excess saving that must be either invested overseas or held as foreign reserves. If a gold standard is being used, the excess saving/foreign reserves can… Read More »
Daily Comment (May 15, 2017)
by Bill O’Grady, Kaisa Stucke, and Thomas Wash [Posted: 9:30 AM EDT] Financial markets are quiet, although we are seeing a strong rally in crude oil (see below). Here are the themes we are following this morning. BREAKING: Edouard Philippe has been named PM of France. He is a member of the Republican Party, suggesting the… Read More »
Asset Allocation Weekly (May 12, 2017)
by Asset Allocation Committee Slow economic growth has plagued the West. Although the concern has been acute since the Great Financial Crisis (GFC), worries about slowing growth predated that event. Perhaps the most important factor contributing to sluggish growth has been tepid productivity growth. This chart shows the five-year change in productivity; we use this longer… Read More »
Daily Comment (May 12, 2017)
by Bill O’Grady, Kaisa Stucke, and Thomas Wash [Posted: 9:30 AM EDT] Although the Comey situation continues to dominate the news flow, we are reaching the point where there isn’t really anything new. So far, the financial markets are managing the situation calmly. The U.S. and China announced a trade agreement. On its surface, it doesn’t… Read More »