Research & News
Weekly Geopolitical Report – The North Korean Summit: Part II (March 26, 2018)
by Bill O’Grady (Due to the Easter holiday, the next report will be published on April 9.) Last week,[1] we discussed the six major nations involved in the North Korean issue and each country’s geopolitical goals, constraints and meeting positions for the recently proposed summit between the U.S. and North Korea. This week, we will examine… Read More »
Asset Allocation Weekly (March 23, 2018)
by Asset Allocation Committee Last week, the Federal Reserve published its Financial Accounts of the United States report, formerly known as the Flow of Funds report. The report is a storehouse of important financial information. In this most recent report, a few things emerged that raised concerns. The first issue is net saving. Net saving is… Read More »
Weekly Geopolitical Report – The North Korean Summit: Part I (March 19, 2018)
by Bill O’Grady On March 8, officials from South Korea, including Chung Eui-yong, the director of South Korea’s National Security Office, came to Washington to brief U.S. officials on a recent dinner with Kim Jong-un, the leader of North Korea. The dinner was held in Pyongyang at North Korea’s Workers’ Party Headquarters, Kim’s workplace, where Mr.… Read More »
Asset Allocation Weekly (March 16, 2018)
by Asset Allocation Committee Last week, we discussed the fact that the generally strong economy should be supportive for equity markets as economic growth will tend to support earnings. However, the other important element of equity valuation is what multiple investors put on those earnings. The most common valuation metric is the price/earnings ratio (P/E). Our… Read More »
Quarterly Energy Comment (March 13, 2018)
by Bill O’Grady The Market Over the past quarter, oil prices have ranged from a low of around $56 to a high of $66 per barrel. Prices remain elevated, supported by OPEC production discipline and solid global oil demand. Prices and Inventories Inventory levels remain elevated but have clearly declined from last year’s peak. View… Read More »
Weekly Geopolitical Report – Emperor Xi: Part II (March 12, 2018)
by Bill O’Grady Last week, we discussed China’s power structure and how the suspension of term limits changes recent precedents. We examined President Xi’s actions in his first term to consolidate power and prepare for the next phase in China’s adjustment. We concluded with the reasons for moving now and what it potentially signals about Xi’s… Read More »
Asset Allocation Weekly (March 9, 2018)
by Asset Allocation Committee Last year, we introduced an indicator of the basic health of the economy and added it to the many charts we monitor in gauging market conditions. The indicator is constructed with commodity prices, initial claims and consumer confidence. The thesis behind this indicator is that these three components should offer a simple… Read More »
Weekly Geopolitical Report – Emperor Xi: Part I (March 5, 2018)
by Bill O’Grady On February 25th, the Central Committee of the Chinese Communist Party (CPC) announced that it would recommend an end to term limits on the offices of president and vice president. Previously, an officeholder was limited to two five-year terms. We fully expect the recommendation to be approved (recommendations from the Central Committee are… Read More »
Asset Allocation Weekly (March 2, 2018)
by Asset Allocation Committee The recent rise in long-duration yields has been partially blamed on rising inflation expectations. Although this reason is a possible explanation, the reality is that it’s more likely the fixed income markets are simply adjusting to a faster pace of policy tightening. In this report, we examine the differences between cyclical and… Read More »
Weekly Geopolitical Report – The Italian Elections: Part II (February 26, 2018)
by Bill O’Grady In Part I of this report we outlined the geopolitics of Italy and its political economy. This week, we continue the report with an analysis of the upcoming elections and Germany’s impact on the EU, concluding with potential market ramifications. The Election There are four major parties in Italy. Below we detail each… Read More »