Research & News

Daily Comment (June 10, 2019)

by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Happy Monday!  It’s a risk-on day, with equities higher, and gold and Treasury prices lower.  The U.S. and Mexico have a trade deal.  The G-20 Finance Ministers’ meeting (the pre-meeting for the leaders’ meeting) didn’t resolve much.  Here is what we are watching today: The… Read More »

Asset Allocation Weekly (June 7, 2019)

by Asset Allocation Committee Monetary policymakers are facing divergent trends that complicate future policy actions. Financial markets are signaling that the policy rate needs to be cut immediately. The chart on the left shows the implied three-month LIBOR rate, two-years deferred, from the Eurodollar futures market.  Last October, the implied rate was around 3.30%; it has… Read More »

Daily Comment (June 7, 2019)

by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] It’s employment Friday!  We cover the data in detail below but, in short, the data suggests economic weakness; bonds have rallied, the dollar tanked and equity futures have eased off their highs.  Although we don’t expect a Fed rate cut this month, pressure to reduce… Read More »

Daily Comment (June 6, 2019)

by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Today is the 75th anniversary of D-Day.  President Trump is visiting the memorial sites today.  Equities are modestly higher this morning, and Mexico and the ECB are dominating headlines.  Here is what we are watching today: The ECB: The ECB released its statement and it… Read More »

Daily Comment (June 5, 2019)

by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Good morning!  The risk-on rally that began yesterday is continuing this morning.  The ADP employment data was very weak (see below) and is prompting a strong rally in fixed income.  Here is what we are watching today: What prompted the rally?  Much of the lift… Read More »

Daily Comment (June 4, 2019)

by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Good morning!  It’s the 30th anniversary of the Tiananmen Square crackdown.  President Trump’s visit to the U.K. continues today.  We are seeing a bit of risk-on this morning as equities make a modest recovery.  Here is what we are watching today: Fed meets in Chicago:… Read More »

Weekly Geopolitical Report – Rare Earths (June 3, 2019)

by Bill O’Grady (NB: To improve readability, we are now linking references to media reports and articles directly in the text via hyperlinks. Footnoting will be reserved for documents to which we can’t link or to provide additional clarity on a topic.) Since early May, the trade tensions with China have morphed into a broader conflict. … Read More »

Daily Comment (June 3, 2019)

by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] We bid welcome to June!  Like the St. Louis Cardinals, we are more than happy to see May in the rearview mirror.  However, like the other major league baseball team in the state, June may not be much better.  POTUS is in the U.K.  Trade… Read More »

Asset Allocation Weekly (May 31, 2019)

by Asset Allocation Committee There are three factors that tend to cause recessions—inventory misadjustments, policy errors and geopolitical events.  The first in the series has become less of a factor over time.  Inventory management has improved dramatically since the end of WWII, and excess inventory leading to falling output has become less of an issue.  Therefore,… Read More »

Daily Comment (May 31, 2019)

by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Good (?) morning!  It’s ugly out there this morning; markets are in full risk-off mode, with all the flight to safety assets (yen, gold and Treasuries) rallying, while equities and commodities are falling.  A surprise new tariff was announced on Mexico.  Chinese data underwhelms and… Read More »

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