Research & News
Daily Comment (May 4, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] We will keep our opening comments short as quite a few economic indicators were released this morning. Risk markets are trading lower this morning, with equities lower globally and Treasuries trading higher. As the earnings season continues, equity fundamentals have not changed much, thus the pullback… Read More »
Daily Comment (May 3, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] After a rally in risk assets yesterday, we are seeing a reversal this morning. Although China’s official PMI data came in a bit soft (see below), we suspect the real story continues to come from the forex markets. Overnight, the Reserve Bank of Australia (RBA), the… Read More »
Weekly Geopolitical Report – The Geopolitics of Helicopter Money: Part 1 (May 2, 2016)
by Bill O’Grady Since the 2008 Financial Crisis, developed economy central banks have been implementing a series of unconventional policy measures, including quantitative easing (QE), zero interest rate policy (ZIRP) and negative interest rate policy (NIRP). Although these measures likely prevented a deeper financial calamity, such as a repeat of the Great Depression, these actions by… Read More »
Daily Comment (May 2, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] May Day is being celebrated in much of the world today. This holiday is “Labor Day” for most of the rest of the world. Most notably, British markets are closed today. The global PMI data is out (see below). The numbers today are the official ones… Read More »
Asset Allocation Weekly (April 29, 2016)
by Asset Allocation Committee We recently completed our quarterly rebalancing process in our asset allocation models. One of our key assumptions is that the economy will avoid recession but growth will remain sluggish. Recently, two reliable recession indicators, one from the Philadelphia FRB and the other from the Chicago FRB, have confirmed our expectations. First, shown… Read More »
Daily Comment (April 29, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] The primary feature of today’s financial markets is dollar weakness. (Source: Bloomberg) This chart shows the CME dollar index, which is comprised of about 56% EUR and correlates at nearly +80% with the EUR/USD exchange rate. The dollar began to rally in mid-2014 as the U.S.… Read More »
Daily Comment (April 28, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] The market-making news overnight was that the BOJ announced no new policy measures at its meeting. Although this was mostly anticipated, there were hopes that Governor Kuroda would offer at least some support for the economy. Instead, he suggested he is taking a “wait and see”… Read More »
Daily Comment (April 27, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] It’s FOMC Day! As we noted earlier this week, we don’t expect any major news today. The key focus will be on the idea of “balance of risks.” The Fed often puts a note in the statement about the balance of risks. In general, it leans… Read More »
Daily Comment (April 26, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] The FOMC meeting starts today; although there are no expectations of a change in policy at this meeting, we will be closely watching the balance of risks statement. For the past few meetings, the Fed has mostly refused to comment on the balance of risks, but… Read More »
Weekly Geopolitical Report – The Impeachment Proceedings of Dilma Rousseff (April 25, 2016)
by Kaisa Stucke, CFA Brazil’s lower house voted on April 17th to impeach President Dilma Rousseff by a vote of 367 to 137. The process now moves to the Senate, where the country’s 81 senators are expected to vote sometime in the next few weeks, although a final date has not been set. For almost a… Read More »