Research & News
Daily Comment (June 12, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Although the news is historic, the market reaction is very quiet. Most likely, the financial markets are much more interested in what the FOMC does rather than the meetings in Singapore. Here is what we are watching: Singapore: To some extent, the odds favored a meeting… Read More »
Weekly Geopolitical Report – China’s Foreign Reserves: Part II (June 11, 2018)
by Bill O’Grady In the first part of this report, we discussed the evolution of foreign reserves from gold to the dollar, with a historical focus. This week, we will use the macroeconomic saving identity to analyze the economic relationship between China and the U.S. Next week, using this analysis, we will discuss the likelihood that… Read More »
Daily Comment (June 11, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Happy Monday! It’s going to be a busy week. The Federal Reserve meets this week. The president is having his historic meeting with Kim Jong-un. On Friday, we are expecting details on the steel and aluminum tariffs. Here is what’s happening today: Kim and Trump in… Read More »
Asset Allocation Weekly (June 8, 2018)
by Asset Allocation Committee This week, we examine commodities in our fourth installment on secular trends. Commodity prices challenge the notion of “secular.” This chart shows a trend model for real (inflation-adjusted) commodity prices, represented by the Commodity Research Bureau (CRB) commodity index, deflated by CPI. We prefer this commodity index for its long history (over… Read More »
Daily Comment (June 8, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Happy Friday! Equities dipped overnight but are recovering a bit as we head toward the opening bell. There is a lot of news. Let’s dig in: G-7? Acrimony rules in front of the G-7 meeting. President Trump told reporters, “Russia should be allowed back in,” just… Read More »
Daily Comment (June 7, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Financial markets are in the midst of a quiet rally as the S&P challenges the high end of the recent range. Oil is up and the dollar is down. Here is what we are following this morning: BREAKING: The Trump administration and ZTE (0763 HKD, 25.60)… Read More »
Daily Comment (June 6, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Happy National Drive-In Movie Day! And kudos to our favorite outdoor movie theater, the Skyway Drive-In in Fish Creek, WI.[1] Here is what we are watching this morning: ECB tightening? Peter Praet, the ECB’s chief economist, indicated today that policymakers would be taking a hard… Read More »
Daily Comment (June 5, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Good morning—Happy National Moonshine Day![1] Here is what we are watching this morning: Oil and OPEC: The Trump administration has quietly asked OPEC[2] to boost oil output by 1.0 mbpd in a bid to lower oil prices and, as a result, gasoline prices. Undoubtedly we will… Read More »
Weekly Geopolitical Report – China’s Foreign Reserves: Part I (June 4, 2018)
by Bill O’Grady We often get questions about China’s foreign reserves. The fear is that China’s massive “pile” of foreign exchange reserves is a risk factor for U.S. markets. In the first part of this report, we will discuss the evolution of foreign reserves from gold to the dollar, with a historical focus. In Part II,… Read More »
Daily Comment (June 4, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Happy Monday! Equities are ticking higher this morning, walking up a wall of worry. Here is what we are watching this morning: Trade friction: A couple of weekends ago, Treasury Secretary Mnuchin declared a ceasefire on trade. It didn’t last very long. Over the weekend, meetings… Read More »