Research & News
Weekly Geopolitical Report – The 2019 Geopolitical Outlook (December 17, 2018)
by Bill O’Grady (N.B. This will be the last WGR of 2018. Our next report will be published January 7, 2019.) As is our custom, we close out the current year with our geopolitical outlook for the next one. This report is less a series of predictions as it is a list of potential geopolitical issues… Read More »
2019 Outlook: Red Sky at Morning (December 14, 2018)
by Bill O’Grady & Mark Keller |PDF Summary: Economy grows at 2.7%. Expansion makes a new duration record; no recession expected in 2019, although the risk of a downturn will be increasing. Core inflation max is 2.5% next year. Dollar weakens, although the direction is mostly dependent on administration trade policy. We expect preparations for… Read More »
Asset Allocation Weekly (December 14, 2018)
by Asset Allocation Committee Equity markets have come under pressure this autumn. The weakness has gained momentum in recent weeks. This chart shows the yearly change in the S&P 500 Index on a monthly average basis. We have added recession shading; in general, recessions tend to trigger bear market declines of 20% or more. In fact,… Read More »
Weekly Geopolitical Report – The Malevolent Hegemon: Part III (December 10, 2018)
by Bill O’Grady This week, we conclude our series by describing what we view as a new model for the superpower role, the Malevolent Hegemon. We will discuss the differences between this model and the previous one. With this analysis in place, we will examine the potential outcomes from this shift and conclude with potential market… Read More »
Asset Allocation Weekly (December 7, 2018)
by Asset Allocation Committee The election of Donald Trump has been characterized as part of a populist uprising. In the president’s inaugural address, he talked about the “forgotten” that would have a voice in his administration. At the same time, we work under John Mitchell’s dictum of “watch what we do, not what we say.”[1] In… Read More »
Weekly Geopolitical Report – The Malevolent Hegemon: Part II (December 3, 2018)
by Bill O’Grady In Part I, we examined the basic role of the hegemon and the unique model the U.S. has created, which we dubbed the “Benevolent Hegemon.” This week, we discuss why many Americans have become disenchanted with this model, which is pressuring policymakers to either jettison the superpower role or significantly redefine it. Next… Read More »
Asset Allocation Weekly (November 30, 2018)
by Asset Allocation Committee As the FOMC raises rates, there are increasing concerns about the credit markets. After a long period of low rates, credit spreads are starting to widen, raising fears of financial stress. In this report, we will look at these concerns. First, here is what we are seeing with credit spreads: This chart… Read More »
Weekly Geopolitical Report – The Malevolent Hegemon: Part I (November 26, 2018)
by Bill O’Grady Since the election of Donald Trump, there has been much discussion about the demise of the “Liberal International Order,” or LIO. Several books on the topic have been published recently[1] and the general tenor is that the U.S. is giving up global leadership and the world is in trouble. We have been making… Read More »
Asset Allocation Weekly (November 16, 2018)
by Asset Allocation Committee (NB: Due to the Thanksgiving holiday, the next report will be published on November 30.) Last year, 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 with commodity prices, initial claims and consumer… Read More »
Weekly Geopolitical Report – Reflections on the Khashoggi Incident: Part II (November 12, 2018)
by Bill O’Grady (NB: Due to the Thanksgiving holiday, the next report will be published on November 26.) Last week, we discussed the issue of succession in the Kingdom of Saudi Arabia (KSA). In Part II, we will begin with a discussion of the regional power rivalry between Turkey and the KSA, then outline Turkish President… Read More »