Research & News
Daily Comment (July 11, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] There is a lot of political news this morning, all of it from abroad. Leadsom quits: The race to replace PM Cameron ended this morning when Energy Minister Andrea Leadsom quit the race, leaving Home Secretary Theresa May as the only remaining candidate. Almost immediately, the… Read More »
Asset Allocation Weekly (July 8, 2016)
by Asset Allocation Committee One of the great characteristics about working in financial services is that there are always surprises. Recently, we came across a situation in the S&P earnings data that we had not noticed before. It is well known that earnings have two variations—as reported and operating. As reported earnings include all costs. Thus,… Read More »
Daily Comment (July 8, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] We discuss the labor market data in more detail below but the initial response is that the Bureau of Labor Statistics (BLS) seems to have lost its way. We saw a massive jump in June non-farm payrolls by 287k with a net revision of -6k, reversing… Read More »
Daily Comment (July 7, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] Financial markets are attempting to stabilize in front of tomorrow’s employment data. We did get the ADP data (see below), which came in above forecast and rather strong compared to last month. Current expectations call for a 180k rise in payrolls and a 4.8% unemployment rate… Read More »
Daily Comment (July 6, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] It’s more of the same this morning. The GBP has declined under $1.30, worries are present about Italian banks becoming a systemic risk and we continue to see the relentless decline in sovereign yields. China is continuing its “stealth” depreciation. Here are a few charts of… Read More »
Daily Comment (July 5, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] After an impressive recovery in equities last week, markets are weakening to start this week. There are a number of factors weighing on sentiment. Here are the key ones: The Italian banking mess: Today’s lead headline in the FT discusses how Monte dei Paschi (BMPS: IM,… Read More »
Asset Allocation Weekly (July 1, 2016)
by Asset Allocation Committee The Brexit situation is dominating the financial news, and rightly so—such events are unusual and their outcomes are usually uncertain. As part of our asset allocation process, we examine these types of issues and adjust our portfolios to account for them. Although our process is cyclical, meaning we pay particular attention to… Read More »
Daily Comment (July 1, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] It’s global PMI day! We have recorded the overseas numbers below. Overall, Europe came in strong, while Asia was mostly neutral to negative. Although the European numbers were positive, they may be dampened post-Brexit. After BOE Governor Carney promised further monetary accommodation yesterday, financial markets rose… Read More »
Daily Comment (June 30, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] The big shock overnight came from a surpise announcement by former London Mayor Boris Johnson, who withdrew from the race for the PM job in the U.K. after a withering attack from an (now probably former) ally, Michael Gove. This withdrawal adds to uncertainty surrounding the… Read More »
Daily Comment (June 29, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] Although global equity markets continue to rally, we are seeing a rather curious trade across financial and commodity markets. Notably, gold and long-duration Treasuries remain strong. Two charts highlight the impact. First, we note that inflows into gold ETPs are steadily rising. (Source: Bloomberg) This chart… Read More »