Research & News
Asset Allocation Quarterly (Third Quarter 2016)
The U.S. economy is likely to remain in its low-growth trend and we don’t foresee a recession, given that the Fed has become less inclined to raise rates. Brexit should be largely transitory for Britain, but may reveal a variety of weaknesses within the European Union. The U.S. presidential elections reveal a myriad of changing… Read More »
Weekly Geopolitical Report – Meet Theresa May (July 18, 2016)
by Bill O’Grady On Monday, July 11, U.K. Energy Minister Andrea Leadsom withdrew from the race for prime minister. The Tories decided to end the leadership contest with Leadsom’s exit, giving the PM job to Theresa May. She officially took over the role on Wednesday, July 13. In this report, we will begin with a discussion… Read More »
Asset Allocation Weekly (July 15, 2016)
by Asset Allocation Committee Since the recovery began, we have consistently favored duration in fixed income. Our position has been that growth would remain sluggish in the developed world and global overcapacity would keep inflation contained. The consensus of strategists and economists didn’t support our position. This chart shows the path of the 10-year T-note yield… Read More »
Weekly Geopolitical Report – Post-Brexit (July 11, 2016)
by Bill O’Grady On June 23rd, voters in the U.K. shocked global markets by voting to leave the EU. In this report, we will examine the various paths the country may take in the coming months with regard to this issue, discuss the political lessons learned and the impact Brexit will have on other European nations. … Read More »
Asset Allocation Weekly (July 8, 2016)
by Asset Allocation Committee One of the great characteristics about working in financial services is that there are always surprises. Recently, we came across a situation in the S&P earnings data that we had not noticed before. It is well known that earnings have two variations—as reported and operating. As reported earnings include all costs. Thus,… Read More »
Asset Allocation Weekly (July 1, 2016)
by Asset Allocation Committee The Brexit situation is dominating the financial news, and rightly so—such events are unusual and their outcomes are usually uncertain. As part of our asset allocation process, we examine these types of issues and adjust our portfolios to account for them. Although our process is cyclical, meaning we pay particular attention to… Read More »
Weekly Geopolitical Report – The 2016 Mid-Year Geopolitical Outlook (June 27, 2016)
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 (June 24, 2016)
by Asset Allocation Committee Last week, St. Louis FRB President Bullard issued a position paper that represents a significant departure from what has been standard policy at the Federal Reserve. Our first hint that something had changed was noticed in the dots chart. First, there were two dots that indicated no change in policy in 2017… Read More »
Weekly Geopolitical Report – The Real Risk of Brexit (June 20, 2016)
by Bill O’Grady In February, we presented an analysis of Brexit, which is shorthand for Britain’s potential departure from the European Union (EU). The referendum is slated for June 23.[1] In general, the points discussed in the aforementioned report on the economy, trade, regulatory policy, immigration and the U.K.’s geopolitical “footprint” all still hold. There… Read More »
Asset Allocation Weekly (June 17, 2016)
by Asset Allocation Committee Our asset allocation process has generally favored longer duration fixed income instruments. We have expected inflation to remain low due to continued globalization and deregulation. Over time, low inflation brings low long-term interest rates. In recent weeks, domestic long-term interest rates have declined significantly. Although this isn’t a huge surprise to us,… Read More »