Research & News
Asset Allocation Weekly (January 19, 2018)
by Asset Allocation Committee Since the beginning of the year, long-term interest rates have moved higher. The constant maturity 10-year Treasury yield ended 2017 at 2.40%. That yield climbed to 2.60% in January, which is above our recently released 2018 Outlook forecast. We are not adjusting our forecast quite yet because the driving factor behind our… Read More »
Keller Quarterly (January 2018)
Letter to Investors Welcome to 2018! The stock and bond markets did much better in 2017 than most participants expected, by my reckoning. This has led to an unusually large proportion of the forecasts for this year predicting dire outcomes, also by my reckoning. Predicting the future is impossible, of course, but that doesn’t stop… Read More »
Asset Allocation Weekly (January 12, 2018)
by Asset Allocation Committee Last week, we issued an addendum to our 2018 Outlook[1] to take into account the recent tax law changes. Our top-down analysis suggests there will be a significant increase in corporate earnings which will translate into higher S&P 500 earnings. Our original forecast was for $129.82[2] for 2018; we have increased our… Read More »
Weekly Geopolitical Report – The Iranian Protests (January 8, 2018)
by Bill O’Grady (N.B. Due to Martin Luther King Jr. Day, our next report will be published January 22, 2018.) In early December, small protests developed in parts of Iran due to sharp increases in some food prices. By the last week of 2017, the protests had spread across the country and have continued into the… Read More »
Asset Allocation Weekly (January 5, 2018)
by Asset Allocation Committee Equity markets had a very strong 2017, with the S&P 500 up over 20% for the year. Earnings rose more than expected, the economy continued to expand and investor sentiment was buoyant, all of which contributed to rising equities. The tax bill, signed in late December, will give equities a lift going… Read More »
2018 Outlook: Addendum (January 4, 2018)
by Bill O’Grady & Mark Keller | PDF Summary: When we wrote our 2018 Outlook, we were unable to take into account the Tax Cuts and Jobs Act of 2017[1] because the legislation had not been signed by the time we published our report. This Addendum will address the impact of the tax bill on… Read More »
Asset Allocation Weekly (December 22, 2017)
by Asset Allocation Committee (N.B. This will be the last Asset Allocation Weekly for 2017. We thank our readers and wish them a Merry Christmas and Happy New Year. The next report will be published on January 5, 2018.) As equity markets continue to trend higher, there are always worries about how long the bull market… Read More »
Weekly Geopolitical Report – The 2018 Geopolitical Outlook (December 18, 2017)
by Bill O’Grady (N.B. This will be the last WGR of 2017. Our next report will be published January 8, 2018.) As is our custom, we close out the current year with our outlook for the next one. This report is less a series of predictions as it is a list of potential geopolitical issues that… Read More »
Quarterly Energy Comment (December 15, 2017)
by Bill O’Grady The Market Oil prices have recovered strongly from the mid-summer lows. It appears we are establishing a new trading range between $55 and $60 per barrel. This recovery was mostly caused by a steady decline in U.S. domestic crude oil inventories, a weak dollar and OPEC output discipline. We expect OPEC to… Read More »
Asset Allocation Weekly (December 15, 2017)
by Asset Allocation Committee Last week, the Federal Reserve released its Financial Accounts of the United States, formerly called the Flow of Funds report. It is a broad set of data that covers many aspects of the economy. Here we present some key charts from the report. This chart shows key private sector debt as a… Read More »