Research & News
Daily Comment (May 9, 2019)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Trade concerns remain, while tensions with Iran increase. Here is what we are watching: China trade: Although Chinese negotiators are meeting with U.S. officials today, it appears we are heading toward tariffs at midnight EDT tonight. China has vowed to retaliate.[1] In a speech (granted,… Read More »
Daily Comment (May 8, 2019)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Risk-off continues. Tensions with Iran are increasing. South Africa holds elections today. Here is what we are watching: The Iran issue: SoS Pompeo abruptly canceled a meeting with German Chancellor Merkel and made an unannounced visit to Baghdad.[1] According to reports, he made the detour… Read More »
Daily Comment (May 7, 2019)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Trade tensions remain. Parsing the Iran threat. Here is what we are watching: Trade turmoil: So, is the tariff threat real or a bluff? Equity markets decided yesterday that it was more the latter than the former.[1] This morning, equity markets seem less convinced. This… Read More »
Weekly Geopolitical Report – Reflections on Domestic Policy and American Hegemony: Part III (May 6, 2019)
by Bill O’Grady Part I of this report was a review of the reserve currency and the savings identity. In Part II, we showed how the Nixon and Reagan administrations used America’s hegemonic power to force some of the economic adjustment of U.S. policy onto foreign governments. This week, in the final segment of this report,… Read More »
Daily Comment (May 6, 2019)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Happy Monday as we clear out the “tequila cobwebs” this morning! Cyclone Fani made landfall over the weekend.[1] Ramadan begins.[2] Trade turmoil returns. It’s a massive risk-off day so far. Here is what we are watching: Trade turmoil: On Sunday afternoon, President Trump tweeted that,… Read More »
Asset Allocation Weekly (May 3, 2019)
by Asset Allocation Committee Covered interest rate parity is a basic concept that, at its heart, says all interest rates are equal after hedging exchange rate risk. It is one of the theories in finance that is beyond dispute—it works as long as capital markets are open (free of capital controls) and short-term money markets are… Read More »
Daily Comment (May 3, 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 the quick take is that it was a blowout report. Payrolls were well above forecast and the unemployment rate fell to its lowest level since December 1969. Here is what we are watching: Moore… Read More »
Daily Comment (May 2, 2019)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Some markets, notably China and Japan, remain closed for May Day. Here is what we are watching: The Fed: As expected, the FOMC left rates unchanged. The statement acknowledged the pickup in economic growth but tempered that positive comment by indicating that household spending and… Read More »
Daily Comment (May 1, 2019)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Happy May Day, the international Labor Day! It’s also Fed day. Here is what we are watching: The Fed: The president continues to press the FOMC to cut rates.[1] So far, his demands have not had much effect, although we can make a cogent case… Read More »
Daily Comment (April 30, 2019)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] As we bid goodbye to April, there’s a new emperor in Japan and the IS leader re-emerges. China’s PMI data (see below) came in a bit light.[1] On the other hand, Europe’s GDP came in better than expected.[2] Here is what we are watching: Spanish… Read More »