Research & News
Daily Comment (August 29, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] The long anticipated Jackson Hole conference came and went. Chair Yellen’s speech was initially taken as dovish, but comments from Vice Chair Fischer sent financial and commodity markets into a significant reversal when he indicated that two hikes may be possible this year. We see the… Read More »
Daily Comment (August 26, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] Market movement this morning is eerily quiet. The change in currencies is small, energy is roughly unchanged as are Treasuries. The lack of activity in front of Yellen’s remarks (which formally begin at 10:00 EDT) suggests that (a) the markets are mostly “squared” in front of… Read More »
Asset Allocation Weekly (August 26, 2016)
by Asset Allocation Committee As we noted last week, equity markets are trading at the upper end of the range defined by the relationship between the Federal Reserve’s balance sheet and equities. To some extent, the level of the relationship is somewhat less important than what the expanded balance sheet signals, which is that monetary policy… Read More »
Daily Comment (August 25, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] All eyes are focusing on the Grand Tetons as the KC FRB’s annual meetings start in Jackson Hole tomorrow. Although the market’s focus is all about the timing of the next rate hike (fed funds futures indicate over 50% probability for the December meeting, 30% for… Read More »
Daily Comment (August 24, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] Late summer doldrums are upon us. Financial markets are quiet; the VIX is falling as investor fears dissipate. About the only concern out there is Fed policy. As we noted yesterday, Chair Yellen speaks on Friday. She is not taking questions and her topic is on… Read More »
Daily Comment (August 23, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] It was another quiet overnight session, typical of late summer. The flash PMI data came in fairly strong (details below), easing some concerns about the economy post-Brexit. However, until Britain actually leaves the EU, it is almost impossible to determine what the actual impact will be,… Read More »
Weekly Geopolitical Report – Thinking about Thinking: Part II (August 22, 2016)
by Bill O’Grady Last week, we examined the three types of statements deemed true. This week we will discuss the appropriate assignment of these statements and the dangers in their inappropriate use. We will conclude with how investors can use this analysis. As an aside, these last two WGRs have examined a broad topic outside the… Read More »
Daily Comment (August 22, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] There are two items of note this morning. First, talk coming from the FOMC is that of two minds. On the one hand, several members are taking great pains to suggest that all meetings are “live.” Today’s weakness in equities and dollar strength is being attributed… Read More »
Daily Comment (August 19, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] We have been monitoring the situation in Russia since early August. There have been a number of reports indicating a troop buildup on the Ukrainian border. There have been unsubstantiated accounts of an attack in Crimea; Russia claims Ukrainian special operations forces attempted an attack, while… Read More »
Asset Allocation Weekly (August 19, 2016)
by Asset Allocation Committee U.S. equity markets are showing impressive strength. This chart shows the S&P 500 Index along with the 200-day moving average. The white horizontal line shows recent highs; note that the S&P 500 has recently moved above these highs. Technically, this is a “breakout” and suggests the market will likely move higher. Still,… Read More »