Research & News
2020 Outlook Update: Storm Warning (March 16, 2020)
by Bill O’Grady & Mark Keller | PDF Summary—High Probability of Recession: The economy is facing three simultaneous problems: A public health crisis—COVID-19 and the economic impact of containing it; An oil price war and a regional economic slump; Rapidly rising financial stress caused by (a) and (b) along with underlying unresolved issues. We estimate… Read More »
Asset Allocation Weekly (March 13, 2020)
by Asset Allocation Committee Our baseline position has been that the COVID-19 virus would have a significant impact in terms of magnitude but be of limited duration and thus would probably not put the economy into recession. Over the past week, two events have occurred which put this position into question. The first is the oil… Read More »
Weekly Energy Update (March 12, 2020)
by Bill O’Grady, Thomas Wash, and Patrick Fearon-Hernandez, CFA Crude oil inventories rose 7.7 mb compared to the forecast rise of 1.7 mb. In the details, U.S. crude oil production fell 0.1 mbpd to 13.0 mbpd. Exports fell 0.7 mbpd, while imports rose 0.2 mbpd. The inventory build was more than forecast due to falling… Read More »
Weekly Geopolitical Report – On Pandemics (March 9, 2020)
by Bill O’Grady Since January, the world has been dealing with the COVID-19 virus, a new coronavirus that has been spreading around the world. Because this situation is still evolving, it is too early to determine the overall impact of this specific virus. We update our views on COVID-19 regularly in our Daily Comment report.… Read More »
Asset Allocation Weekly (March 6, 2020)
by Asset Allocation Committee In the turmoil caused by COVID-19, fixed income has performed remarkably well. Ten-year T-note yields have declined to record lows and, as we will show below, there is no evidence of severe stress in the credit markets. First, here is what we are seeing in Treasuries. This chart shows our 10-year T-note… Read More »
Weekly Energy Update (March 5, 2020)
by Bill O’Grady, Thomas Wash, and Patrick Fearon-Hernandez, CFA Crude oil inventories rose 0.8 mb compared to the forecast rise of 3.0 mb. In the details, U.S. crude oil production rose 0.1 mbpd to a new record of 13.1 mbpd. Exports rose 0.5 mbpd, while imports were unchanged. The inventory build was less than forecast… Read More »
Weekly Geopolitical Report – Investment Implications of Changing Demographics: Part III (March 2, 2020)
by Patrick Fearon-Hernandez, CFA In Part I of this report, we looked at current key global population trends. The report discussed how plunging birth rates have been weighing on population growth and boosting average ages all over the world, with a potentially huge impact on the distribution of geopolitical power, economic prospects and future investment… Read More »
Asset Allocation Weekly (February 28, 2020)
by Asset Allocation Committee Since the end of the Financial Crisis, there has been a steady deterioration in investment-grade credit quality. This chart shows the percentage of investment-grade bonds rated at BBB. Since late 2018, this portion has represented half of outstanding investment-grade credit. This rating is the lowest end of investment-grade credit, so the dominance… Read More »