Research & News
Asset Allocation Weekly (January 31, 2020)
by Asset Allocation Committee Last week, we updated our thoughts about a melt-up in equity markets. We observed that retail flows had diverged from equity market performance and noted that if sentiment shifts and retail investors come into equities, the market could rise rapidly to levels that may not be sustainable. This week, we are dealing… Read More »
Keller Quarterly (January 2020)
Letter to Investors You don’t need me to tell you this, but 2019 was an unusually good year for the public financial markets. Virtually every market rebounded nicely from the sharp sell-offs that occurred in late 2018. How broad was the advance? Confluence Investment Management’s Asset Allocation team tracks 12 major asset classes globally, consisting… Read More »
Weekly Geopolitical Report – The U.S.-China “Phase One” Trade Deal: Part I (January 27, 2020)
by Patrick Fearon-Hernandez, CFA After months of negotiations, the U.S. and China signed “Phase One” of what is expected to be a multiple-phase trade deal. After noting media response to the agreement, we were struck by the dismissive consensus narrative that has developed. Our careful review of the document seemed to suggest a much more… Read More »
Asset Allocation Weekly (January 24, 2020)
by Asset Allocation Committee One of the risks we noted in the 2020 Outlook: Storm Watch was the potential for a “melt-up.” On the one hand, seeing a parabolic rise in equities seems like a positive. On the other, a rise of significant magnitude only occurs because of a surge of late buyers; these latecomers usually… Read More »
Asset Allocation Quarterly (First Quarter 2020)
The U.S. election season and the more dovish composition of the Federal Reserve Board of Governors should ensure policy accommodation continues in the near-term. The recent resolution of trade policies with China and the prospect for finalization of USMCA produces an environment where corporate capital can be deployed with less uncertainty. Although we hold a… Read More »
Asset Allocation Weekly (January 17, 2020)
by Asset Allocation Committee The December employment data showed three interesting developments that are worth discussing. They are wage growth, hours worked and the level of “out of the workforce.” Wage growth: For most of last year, production and non-supervisory wage growth was outpacing that of overall workers. This development suggested that ordinary workers were finally… Read More »
Weekly Geopolitical Report – After Soleimani (January 13, 2020)
by Bill O’Grady (Due to the Martin Luther King Jr. Day holiday, our next report will be published on January 27.) On January 3rd, the U.S. launched a missile strike that killed Major General Qassem Soleimani, the leader of the Quds Force of the Islamic Revolutionary Guard Corps (IRGC). As a high-profile commander, his death… Read More »
Asset Allocation Weekly (January 10, 2020)
by Asset Allocation Committee In our 2020 Outlook, we discussed three risks to the forecast, with one of them being a “melt-up” or a dramatic rise in stock prices. One of the key factors that could bolster higher prices for risk assets would be the idea that the FOMC has engineered a soft landing, which is… Read More »