Research & News
Weekly Geopolitical Report – Iran Sanctions and Potential Responses: Part I (July 30, 2018)
by Bill O’Grady In May, the Trump administration withdrew from the nuclear deal with Iran, officially known as the Joint Comprehensive Plan of Action (JCPOA). The European participants (the other signatories were the U.K., Russia, France, Germany and China) tried to convince President Trump that leaving the pact would be a mistake, but President Trump has… Read More »
Asset Allocation Weekly (July 27, 2018)
by Asset Allocation Committee Last week, in a wide-ranging interview on CNBC,[1] President Trump ended a 25-year détente with the Federal Reserve, openly criticizing the current path of monetary policy. The president followed up the interview with numerous social media tweets, further criticizing policy tightening. Although it’s been a long time since a president weighed in… Read More »
Keller Quarterly (July 2018)
Letter to Investors The “choppiness” of the stock market, of which we wrote last quarter, continues. Even though the U.S. stock market, as represented by the S&P 500, has been working its way upward since early April, it still stands 2.6% below its high for this year (reached on January 26th). As we noted last… Read More »
Weekly Geopolitical Report – Reflections on Politics and Populism: Part II (July 23, 2018)
by Bill O’Grady Last week, we defined important terms that shape the political alignments and examined the coalitions that mostly define the political sphere.[1] This week, we make some general observations of how the coalitions interact, discuss the “natural” pairings of the coalitions and examine historical examples. We will conclude with market ramifications. Observations There is… Read More »
Asset Allocation Weekly (July 20, 2018)
by Asset Allocation Committee Although earnings are rising, equity markets have been range-bound since February. This chart shows the S&P 500; after peaking around 2870, prices have been in a range roughly from 2600 to 2800. Although monetary policy tightening is partly to blame, the Fed was lifting rates during the period when the market was… Read More »
Asset Allocation Quarterly (Third Quarter 2018)
We expect that Fed policy will continue tightening through year-end, with as many as two additional increases in the fed funds rate in tandem with a measured reduction in the size of the Fed’s balance sheet, but the prospect for a recession is not included in our cyclical forecast. Our expectations are for continued GDP… Read More »
Weekly Geopolitical Report – Reflections on Politics and Populism: Part I (July 16, 2018)
by Bill O’Grady The rise of populism and the preference for unconventional leaders are upending the world order that the U.S. created after WWII. Accordingly, across the West, we are seeing a steady rejection of centrist, establishment parties. Here are some of the changes we have observed recently: France: Emmanuel Macron was elected to the presidency… Read More »
Asset Allocation Weekly (July 13, 2018)
by Asset Allocation Committee Earnings season is upon us. We normally don’t report on earnings season since we discuss it every day and update the P/E chart weekly, but we are seeing significant growth in earnings which warrants some reflection. The primary reason for the jump in earnings has been the decline in corporate tax rates.… Read More »
Weekly Geopolitical Report – The Return of AMLO (July 9, 2018)
by Thomas Wash On July 1, Andres Manuel Lopez Obrador, or AMLO for short, became Mexico’s first leftist president in over three decades,[1] running on anti-establishment and anti-corruption platforms. The 64-year-old activist won with over 53% of the vote, the most since Mexico moved to a multi-party system. For the first time in nearly a century,… Read More »
Asset Allocation Weekly (July 6, 2018)
by Asset Allocation Committee Over the past quarter, emerging market equities have weakened; the primary culprit was a strengthening dollar, although concerns about softer non-U.S. growth likely played a role as well. The dollar’s strength appears to be caused by one of two factors. The first possibility is interest rate differentials, which are partly due to… Read More »