Research & News

Asset Allocation Weekly (April 29, 2016)

by Asset Allocation Committee We recently completed our quarterly rebalancing process in our asset allocation models.  One of our key assumptions is that the economy will avoid recession but growth will remain sluggish.  Recently, two reliable recession indicators, one from the Philadelphia FRB and the other from the Chicago FRB, have confirmed our expectations. First, shown… Read More »

Daily Comment (April 29, 2016)

by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] The primary feature of today’s financial markets is dollar weakness. (Source:  Bloomberg) This chart shows the CME dollar index, which is comprised of about 56% EUR and correlates at nearly +80% with the EUR/USD exchange rate.  The dollar began to rally in mid-2014 as the U.S.… Read More »

Daily Comment (April 28, 2016)

by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] The market-making news overnight was that the BOJ announced no new policy measures at its meeting.  Although this was mostly anticipated, there were hopes that Governor Kuroda would offer at least some support for the economy.  Instead, he suggested he is taking a “wait and see”… Read More »

Daily Comment (April 27, 2016)

by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] It’s FOMC Day!  As we noted earlier this week, we don’t expect any major news today.  The key focus will be on the idea of “balance of risks.”  The Fed often puts a note in the statement about the balance of risks.  In general, it leans… Read More »

Daily Comment (April 26, 2016)

by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] The FOMC meeting starts today; although there are no expectations of a change in policy at this meeting, we will be closely watching the balance of risks statement.  For the past few meetings, the Fed has mostly refused to comment on the balance of risks, but… Read More »

Weekly Geopolitical Report – The Impeachment Proceedings of Dilma Rousseff (April 25, 2016)

by Kaisa Stucke, CFA Brazil’s lower house voted on April 17th to impeach President Dilma Rousseff by a vote of 367 to 137.  The process now moves to the Senate, where the country’s 81 senators are expected to vote sometime in the next few weeks, although a final date has not been set.  For almost a… Read More »

Daily Comment (April 25, 2016)

by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] It was a remarkably quiet weekend and that pattern has continued into this morning.  Risk markets are easing this morning in what looks more like tactical profit taking.  The BOJ and Fed both meet this week, with the former finishing its meeting on Thursday and the… Read More »

Asset Allocation Weekly (April 22, 2016)

by Asset Allocation Committee Although it is a widely held assertion that lower gasoline prices will lead to stronger consumption, this correlation has been mostly absent following the most recent decline in fuel prices.  We suspect that household deleveraging has tended to weaken the expected impact of lower gasoline prices.  However, there does appear to be… Read More »

Daily Comment (April 22, 2016)

by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] Japanese risk markets traded higher on reports that the BOJ may consider negative rate loan programs for banks, making the lending facility more attractive.  Under the program, the BOJ would pay banks to borrow under certain conditions.  The BOJ is scheduled to meet next week and… Read More »

Keller Quarterly (April 2016)

Letter to Investors An avid baseball fan once invited a business associate to a game.  The associate was not much interested in baseball, but he agreed to go.  They travelled to the park separately.  The true fan got to their seats first well before the game started…and what a game it was!  Both pitchers were… Read More »

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