Asset Allocation Bi-Weekly

Confluence Investment Management offers various asset allocation products which are managed using “top down,” or macro, analysis. We publish asset allocation thoughts on a bi-weekly basis, updating the piece every other Monday.

Asset Allocation Bi-Weekly – Believe It or Not, Fiscal Policy Is Tightening (March 7, 2022)

by the Asset Allocation Committee | PDF The U.S. economy and government economic policies have many moving parts, but investors often latch onto just one or two indicators or policy initiatives to gauge where asset prices are heading.  These days, their focus has been on consumer price inflation and the Federal Reserve’s plan to hike… Read More »

Asset Allocation Bi-Weekly – The U.S. Trade Deficit and Global Prices (February 22 2022)

by the Asset Allocation Committee | PDF When Democrats passed the CARES Act in January 2021, it was viewed initially as a political achievement. Polling from Politico/Morning Consult showed 75% of registered voters supported the bill three months after its passing. Meanwhile, Democrats began touting President Biden as the next Franklin D. Roosevelt. The legislation… Read More »

Asset Allocation Bi-Weekly – Gold: An Update of Current Conditions (February 7, 2022)

by the Asset Allocation Committee | PDF Gold moved steadily higher from the late summer of 2018 into August 2020.  Prices then declined toward $1,700 and have since traced out a trading range between $1,700 and $1,900.  In this report, we will update our views on the metal. (Source: Barchart.com) We have been holding gold… Read More »

Asset Allocation Bi-Weekly – Real Income versus the Wealth Effect; What is Driving Consumption? (January 24, 2022)

by the Asset Allocation Committee | PDF One of the debates within economics is whether consumption is driven by income or wealth.  The outcome of this debate is important for policymakers; if the goal of policy is lifting or constraining growth, knowing which factor is more important to consumption is critical.  For example, if the… Read More »

Asset Allocation Bi-Weekly – The Path of Monetary Policy (January 10, 2022)

by the Asset Allocation Committee | PDF Our expectation of no policy rate hikes this year is an out-of-consensus call in our 2022 Outlook: The Year of Fat Tails.  There are a couple of factors that suggest rate hikes this year.  First, financial markets have factored in rate hikes.  Fed funds futures suggest a greater… Read More »

Asset Allocation Weekly – What’s Causing the Yield Curve to Flatten? (December 17, 2021)

by the Asset Allocation Committee | PDF A note to readers: The Asset Allocation Weekly will go on holiday hiatus following today’s report and return as a bi-weekly publication, now on Mondays, beginning January 10, 2022.  From all of us at Confluence Investment Management, we wish you a Merry Christmas and Happy New Year!  See… Read More »

Asset Allocation Weekly – The Omicron Problem (December 10, 2021)

by the Asset Allocation Committee | PDF Over the Thanksgiving holiday, news broke that a new variant of COVID-19 had been isolated in South Africa.  This new variant has an usually high number of mutations, which increases the likelihood that current immunity will be compromised.  In other words, prior infection or inoculation will probably be… Read More »

Asset Allocation Weekly – An Update on Gold (December 3, 2021)

by the Asset Allocation Committee | PDF Gold moved steadily higher from the late summer of 2018 into August 2020.  Prices then declined toward 1,700 and have since traced out a trading range between 1,700 and 1,900.  In this report, we will update our views on the metal. (Source: Barchart.com) We have been holding gold… Read More »

Asset Allocation Weekly – The Composition of the FOMC (November 19, 2021)

by the Asset Allocation Committee | PDF (NB:  Due to the Thanksgiving holiday, the next report will be published on December 3.) The FOMC now has at least three vacant governor positions and two regional bank president positions.  There is one vacancy that remains from the Trump administration.  Richard Clarida’s vice-chair position expires in January. … Read More »

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