Research & News
Asset Allocation Weekly (July 15, 2016)
by Asset Allocation Committee Since the recovery began, we have consistently favored duration in fixed income. Our position has been that growth would remain sluggish in the developed world and global overcapacity would keep inflation contained. The consensus of strategists and economists didn’t support our position. This chart shows the path of the 10-year T-note yield… Read More »
Daily Comment (July 14, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] Equities are higher this morning on expectations of continued support from policy stimulus. Although the BOE disappointed (see below), the BOJ looks like it is moving steadily toward direct BOJ financing of fiscal spending, otherwise known as helicopter money. Japan remains mired in near-deflationary conditions and… Read More »
Daily Comment (July 13, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] It was another quiet overnight session. Equities continue to be well bid; as noted above, so far, earnings are coming in better than expected. Of course, as our AAW discusses this week, the data we track daily comes from Thomson-Reuters, meaning that they are probably overstating… Read More »
Daily Comment (July 12, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] The most important news for investors is that, despite everything, equity markets around the world are gaining strength. This improvement is coming despite slowing earnings growth, sluggish economic activity, Brexit, an adverse ruling against China on its maritime claims, U.S. elections, etc. Why the strength? Most… Read More »
Weekly Geopolitical Report – Post-Brexit (July 11, 2016)
by Bill O’Grady On June 23rd, voters in the U.K. shocked global markets by voting to leave the EU. In this report, we will examine the various paths the country may take in the coming months with regard to this issue, discuss the political lessons learned and the impact Brexit will have on other European nations. … Read More »
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 »