Research & News
Asset Allocation Weekly (October 25, 2019)
by Asset Allocation Committee For nearly two years, the energy sector has dramatically underperformed the overall equity market and oil prices. This chart shows our S&P energy sector model. We regress the overall S&P 500 and oil prices against the energy sector. For most of the index’s history, these two variables explained much of the behavior… Read More »
Weekly Geopolitical Report – The End of the Carter Doctrine: Part II (October 21, 2019)
by Bill O’Grady In Part I of this report, we identified the need to stabilize three areas of the world prone to war in order to maintain global peace. We focused on the Middle East and discussed the development of the Carter Doctrine, examining how the doctrine has been enforced since its inception. In this… Read More »
Keller Quarterly (October 2019)
Letter to Investors I recently had the opportunity to give a talk to a large group of investment advisors, many of whom were longtime friends. Even though we knew each other well, given the times we’re in I felt compelled to begin with a two-part preamble concerning investing that I sometimes give when speaking to… Read More »
Asset Allocation Weekly (October 18, 2019)
by Asset Allocation Committee In 2017, we introduced an indicator of the basic health of the economy and added it to the many charts we monitor to gauge market conditions. The indicator is constructed using commodity prices, initial claims and consumer confidence. The thesis behind this indicator is that these three components should offer a simple… Read More »
Asset Allocation Quarterly (Fourth Quarter 2019)
The U.S. Federal Reserve and other central banks are expected to continue their accommodative postures, especially considering issues stemming from trade impediments. While we retain a relatively sanguine view of the U.S. economy over our three-year cyclical forecast period, we recognize there is increased potential for an economic downturn. Each strategy reflects a more neutral… Read More »
Weekly Geopolitical Report – The End of the Carter Doctrine: Part I (October 14, 2019)
by Bill O’Grady In our 2018 Mid-Year Geopolitical Outlook we opened the report with an analysis of America’s evolving hegemony. We noted that America’s hegemonic narrative centered on containing communism. This factor united Americans to accept the burden of the superpower role. However, embedded in that commitment to contain communism was the “freezing” of three… Read More »
Asset Allocation Weekly (October 11, 2019)
by Asset Allocation Committee The financial markets have been roiled recently by the apparent shortage of liquidity in the repo markets. Our take is that the problem is twofold—there are regulatory problems that mean the banking system requires more in reserves than it did prior to the Great Financial Crisis, and there are likely industry concentration… Read More »