Research & News
Daily Comment (October 25, 2016)
by Bill O’Grady, Kaisa Stucke, and Thomas Wash [Posted: 9:30 AM EDT] Overnight news flow was unusually low. Earnings are generally coming in favorably as energy companies recover. Equity markets remain relatively firm. The new money market rules officially went into effect on Oct. 14th and, now that they are in place, the short-term money markets… Read More »
Weekly Geopolitical Report – The Geopolitics of the Reserve Currency: Part 1 (October 24, 2016)
by Bill O’Grady One of the more interesting developments in this presidential political cycle has been the near total abandonment of free trade. Neither presidential candidate supports the Trans-Pacific Partnership (TTP) or the Transatlantic Trade and Investment Partnership (TTIP), the topic of last week’s report. The primary reason for this backlash against free trade is the… Read More »
Daily Comment (October 24, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] Good ISM data from Europe (see below) lifted global equity markets. Mergers are another factor affecting financial markets, with the biggest being Time Warner (89.48, +6.84) and ATT (37.49, -1.15). This one is getting lots of political attention. Donald Trump has already indicated that his administration… Read More »
Asset Allocation Weekly (October 21, 2016)
by Asset Allocation Committee The dollar has been strengthening over the past few weeks; we believe much of this appreciation is due to expectations of tighter monetary policy. Fed funds futures suggest that there is a 60+% chance of a rate hike at the December FOMC meeting. Although the FOMC is divided and there are prominent… Read More »
Daily Comment (October 21, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] The dollar is higher this morning on speculation that the Fed interest rate policy will diverge from the easy monetary policies implemented in Europe and Asia. The dollar rose yesterday and the euro fell as investors interpreted ECB President Draghi’s comments as an indication that stimulus… Read More »
Daily Comment (October 20, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] ECB President Mario Draghi is giving his press conference as we write this. The ECB maintained its benchmark lending rate at zero, the deposit rate at -0.4% and the asset purchases at €80 bn a month. Draghi said that the central bank expects interest rates to… Read More »
Daily Comment (October 19, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] It’s a relatively quiet morning on the macro front. Chinese data came in on forecast to slightly weaker than expected. While GDP rose 6.7% annually, as expected, industrial production rose 6.1% annually, weaker than expected. Yesterday afternoon, the Treasury International Capital (TIC) net monthly flows report… Read More »
Daily Comment (October 18, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] Equity markets are enjoying a strong morning as financial markets prepare for a modest credit tightening in December. Chair Yellen’s recent comments about allowing the economy to run hot were somewhat offset by Vice Chair Fischer yesterday when he cautioned against letting the economy and inflation… Read More »
Weekly Geopolitical Report – The TTIP and the TPP: An Update (October 17, 2016)
by Bill O’Grady In January 2014, we first discussed the Transatlantic Trade and Investment Partnership (TTIP) and the Trans-Pacific Partnership (TPP).[1] Both pacts have moved from obscure trade proposals to highly controversial political issues. In this report, we will begin by discussing the nations involved. We will examine overall details of the proposals, focusing on how… Read More »
Asset Allocation Quarterly (Fourth Quarter 2016)
Although presidential elections gather a lot of attention from investors, we believe the specific person or party getting elected in this cycle may be less important than the forces driving the elections. The Fed is likely to raise rates gradually and we don’t expect the tighter policy to create a recession. Our equity allocations remain… Read More »