Research & News
Keller Quarterly (July 2017)
Letter to Investors It’s terribly hot here in the Midwest. It wouldn’t be a normal Missouri summer if it didn’t touch 100 degrees for a week or two. As uncomfortable as it is, what makes it tolerable is the knowledge that in a couple of months the brutal heat will have left us and a… Read More »
Weekly Geopolitical Report – A Productivity Boom: A Response to Robert Gordon, Part II (July 24, 2017)
by Bill O’Grady Last week, we began an analysis of Michael Mandel and Bret Swanson’s paper[1] which is a response to Robert Gordon’s argument that the West is doomed to a prolonged period of slow productivity growth. In Part I of this report, we examined the productivity issue and discussed Mandel and Swanson’s analysis of the… Read More »
Asset Allocation Weekly (July 21, 2017)
by Asset Allocation Committee In the past few years, we have generally avoided allocations to non-U.S. markets for our asset allocation portfolios due to two primary concerns. First, the dollar was rising as a result of an improving U.S. economy and policy divergences between the U.S. and the rest of the world. The Federal Reserve was… Read More »
Asset Allocation Quarterly (Third Quarter 2017)
Economic data remain supportive and the inflation outlook is currently benign. Though the economic expansion is elongated, we do not anticipate a near-term recession. Fed policy is expected to tighten in terms of rising short-term rates and the reduction in the size of the Fed’s balance sheet. We expect the Fed to commence the reduction… Read More »
Quarterly Energy Comment (July 18, 2017)
by Bill O’Grady The Market Oil prices peaked in March around $55 per barrel. There have been a series of lower highs and lower lows, as shown by the lines on the chart. This obvious downtrend has led to a general bearish tone to the market. We don’t necessarily share that level of pessimism; as… Read More »
Weekly Geopolitical Report – A Productivity Boom: A Response to Robert Gordon, Part I (July 17, 2017)
by Bill O’Grady Robert J. Gordon is a well-known economist and a professor at Northwestern University. A member of the National Bureau of Economic Research, his most notable work is in the area of productivity. His 2016 book[1] argued that the best years of American productivity are behind us—highlighted by the introduction of steam power to… Read More »
Asset Allocation Weekly (July 14, 2017)
by Asset Allocation Committee One of the mysteries of this expansion has been the slow pace of wage growth. Despite the plethora of evidence that labor markets are tight, including hires-to-openings ratio below one, low unemployment, low initial claims and a low unemployment rate, wage growth has remained stunted. The chart below is one we have… Read More »
Weekly Geopolitical Report – The Mid-Year Geopolitical Outlook (July 10, 2017)
by Bill O’Grady As is our custom, we update our geopolitical outlook for the remainder of the year as the first half comes to a close. This report is less a series of predictions as it is a list of potential geopolitical issues that we believe will dominate the international landscape for the rest of the… Read More »
Asset Allocation Weekly (July 7, 2017)
by Asset Allocation Committee One of the relationships we persistently monitor is the expectations of 10-year Treasury yields compared to the actual level of yields. To do this, at the beginning of each year, we plot the rate forecasts from the Philadelphia FRB’s Professional Forecaster Survey. The record of the forecasters has not been stellar. The… Read More »
Asset Allocation Weekly (June 30, 2017)
by Asset Allocation Committee For equity investors, there is always a concern about the major market declines; being able to reduce market exposure prior to crashes like the ones in 2000 or 2008 is always desirable. Although large declines have occurred outside of economic recessions, they have become increasingly rare. The last major market pullback absent… Read More »