Research & News
Asset Allocation Weekly (May 22, 2020)
by Asset Allocation Committee Beginning in the late 1990s and becoming an even bigger issue after Dodd-Frank regulations were imposed following the Great Recession, many market participants worried that bond market liquidity would be absent in the face of a crisis. Strict regulations discouraged banks and brokerage firms from holding large inventories of corporate bonds, thereby… Read More »
Weekly Energy Update (May 21, 2020)
by Bill O’Grady, Thomas Wash, and Patrick Fearon-Hernandez, CFA Here is an updated crude oil price chart. The oil market continues to show signs of recovery. One interesting development has been in open interest. Open interest is the number of open contracts in a futures market. Most of the time, the highest open interest in… Read More »
Weekly Geopolitical Report – The Geopolitics of the 2020 Election: Part I (May 18, 2020)
by Bill O’Grady | PDF (NB: Due to the Memorial Day holiday, the next report will be published on June 1.) In our geopolitical outlook for 2020,[1] our most important issue was the 2020 elections. In general, U.S. presidential elections are geopolitical issues because of America’s hegemonic status. In an era where the U.S. is… Read More »
Asset Allocation Weekly (May 15, 2020)
by Asset Allocation Committee As the Federal Reserve expands its balance sheet and the federal deficit balloons, there is a legitimate concern about the potential for inflation. In this week’s report, we will examine inflation from a theoretical perspective. There are two simple tools we use to discuss inflation, the equation of exchange and the intersection… Read More »
Weekly Energy Update (May 14, 2020)
by Bill O’Grady, Thomas Wash, and Patrick Fearon-Hernandez, CFA Here is an updated crude oil price chart. The oil market continues to show signs of recovery. Crude oil inventories surprised the markets by falling 0.7 mb compared to the forecast rise of 5.0 mb. In the details, U.S. crude oil production fell 0.3 mbpd to… Read More »
Weekly Geopolitical Report – Schumann in Volgograd (May 11, 2020)
by Patrick Fearon-Hernandez, CFA If you ever find yourself in Volgograd, Russia, you will visit Rodina Mat’ Zovyot. It’s unavoidable. The statue, depicting Mother Russia calling her sons to battle against her invaders, is one of the tallest in the world. Standing almost 280 feet high, she is nearly twice as tall as the Statue… Read More »
Asset Allocation Weekly (May 8, 2020)
by Asset Allocation Committee The U.S. economy has been hit with shelter-in-place orders that have depressed consumption and reduced production. The economic readings on Q2 will be historically bad, perhaps even worse than the Great Depression. However, based on the assumptions that (a) aggressive policy support will continue, and (b) the pandemic will wane over time,… Read More »