Whether it’s ideas from the industry or emerging new and trends, read about it here.
Shipping disruptions in the Red Sea could temporarily impact goods prices but not at the same magnitude as during the pandemic. Tight financial conditions, slowing economic growth, and a disinflationary trend all support the Federal Reserve’s (Fed’s) pivot away from tightening monetary policy to easing in the new year.
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As we progress through 2023, investors have a couple of questions: when will a recession start and will the markets retest their lows? The relationship between equity markets and recessions is not always consistent...
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The stock market has been hovering near record highs despite an assortment of economic and geopolitical risks. In the spirit of Halloween, we discuss some of the tricks and treats that might spook the markets between now and year-end....
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The stock market has been hovering near record highs despite an assortment of economic and geopolitical risks. In the spirit of Halloween, we discuss some of the tricks and treats that might spook the markets between now and year-end....
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Trade tensions between the U.S. and China have been building over the course of 2018. These tensions have escalated over the last month. But while risks are rising, economic disruptions have remained minimal. We continue to believe the...
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After losing nearly 10% in 2017 and an additional 4% in January, the U.S. Dollar Index has rallied more than 5 % off its February lows. Gains have been driven by several factors, particularly due to increasing Federal Reserve (Fed)...
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There are several myths about market indicators which have the tendency to distract investors from what really matters in assessing investment opportunities. We believe the overall fundamental backdrop is positive thanks to solid...
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On March 22,2018, President Trump announced approximately $50 billion in tariffs on Chinese goods in response to China’s intellectual property thefts, to which he added there is plenty more to come. China then retaliated with a...
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Are we out of the woods yet? After the recent correction from a record high in S&P 500 Index, stocks have staged an impressive comeback. The S&P 500 put together its best week since 2013, rallying more than 5% off the lows to bring its...
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The latest edition of the Federal Reserve’s (Fed) Beige Book, released Wednesday, January 17, 2018, continued to deliver a positive view of the U.S. economy. The Beige Book is a qualitative assessment of the domestic economy and...
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Jim Nabors, who played the bumbling but lovable Gomer Pyle in The Andy Griffith Show and subsequent Gomer Pyle, U.S.M.C., passed away on November 30. Inspired by a couple of Gomer Pyle’s catch phrases, this month we highlight the...
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Productivity for the third quarter rose 3.0%, the largest one quarter increase since the third quarter of 2014 and over double the average quarterly growth rate since the start of 2009. This surge is significant, as weak productivity...
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Japan’s Nikkei just recorded a 16-day winning streak, its longest on record. When thinking about Japan, many who started following markets closely in the late 1980s know nothing but year after year of recession, deflation, and a...
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Master Limited Partnerships (MLPs) appear to be a natural way to invest in the changing energy landscape. MLPs are exclusively focused on energy infrastructure in the United States and Canada. North American energy production has...
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Over the next few weeks, analysis of the Trump administration’s first 100 days will increasingly dominate the news cycle (April 29 is day 100). From a policy perspective, all the action (or lack thereof) will take place over the...
Read MoreMovement of the U.S dollar is one of the primary drivers that determine the relative performance of U.S. and international investments. Over the five-year period ending February 28, 2017, the difference between international returns...
Read MoreEvaluating real estate investments, including real estate investment trusts (REITs), depends on evaluating three cycles: the economic cycle (primarily jobs), the building cycle, and the interest rate cycle We believe we are in a good...
Read MoreAfter years of earnings recession, improving earnings and relatively low valuations are making overseas investments more attractive. For all the consternation over and discussion of geopolitical and macro-economic issues, what...
Read MoreAt this time last year, the market had finally recovered from an August swoon that left the S&P 500 more than 10% off its all-time highs, the first correction in more than four years, with the worst still ahead in January and February...
Read MoreWith Election Day now behind us and the benefit of some time to digest the news, we reflect on what it has meant for the stock market and share our views on some of the most politically sensitive asset classes and sectors. There were...
Read MoreWhen living in Europe in the mid-1980s (when the dollar was very strong), I asked a currency trader what he expected the dollar to do. He answered that it would “fluctuate.” Although the dollar is not as strong as it was...
Read MoreLike many other categories of gross domestic product (GDP), business capital spending in the economic recovery that began in mid-2009 has lagged other recoveries. Seven years in, inflation adjusted business capital spending (also known...
Read MoreThe news of the vote in the United Kingdom (UK) to exit the European Union (EU) shocked markets, but only briefly. The U.S. stock market as measured by the S&P 500 index has reached new highs, albeit on low volume. So what has changed,...
Read MoreNational income has been growing consistently around 3%. Even during the 1st quarter of this year, when adjusted GDP was only 0.8%, total income grew by 2.9%. Although the income number has remained stable, the composition of it is...
Read MoreThe path of bond yields during a presidential election year is very similar to the historical pattern for any given year. Treasury yields have a seasonal bias to rise in early February and drift higher through mid-May before slowly...
Read MoreThis has been a roller coaster of a year with the stock market back where it started after a severe correction. Perhaps the pessimism was overdone, but so is the recent euphoria. Initially, the markets seemed to be bracing themselves...
Read MoreOil Prices have fallen significantly over the past year. The reason is summed up in a recent report from the International Energy Agency – the oil market is drowning in over supply. The magnitude of the decline in prices has...
Read MoreIn an attempt to ensure that the continent would never suffer another major conflict after World War II, Europe embarked on a movement toward both political and economic integration. At times there have been disagreements, but as a...
Read MoreThe Federal Reserve has consistently forecast GDP growth in excess of 3.0% since the end of the 2007-2009 Recession, which was otherwise considered normal for recoveries after World War II. Yet, we are just completing eight years of...
Read MoreFor the first time in nine years, the Fed raised interest rates. In the middle of the month, the Federal Open Market Committee (FOMC) initiated a tightening cycle for the first time in more than 11 years by raising the target for the...
Read MoreInternational events often influence global capital markets. In recent weeks, we have witnessed horrific loss of life in multiple terrorist attacks. Turkey shot down a Russian fighter plane flying over its air space. All of these...
Read MoreRecent data has supported our macroeconomic view that both global and US economic growth is slowing. The Institute for Supply Management’s manufacturing index fell to 50.2 in September from 51.1 in August. Likewise, their...
Read MoreChina continues to rattle international markets, forcing the Federal Reserve to refrain from increasing short-term interest rates. The Fed’s much publicized desire to move away from the “zero bound” has been, in the...
Read MoreStock market volatility has spiked in August as has the concern of investors. After a parabolic equity performance in China, the severe correction in that market has spooked investors globally. A slowdown in economic growth is evident...
Read MoreThe latest Beige Book suggests that the U.S. economy is still growing at or above its long-term trend, indicating that some of the “transitory factors” that held the U.S. economy back in the first quarter of 2015 have faded...
Read MoreModern Portfolio Theory was developed by Nobel Prize winning economists between the 1950s and 1970s. The theory espouses mathematical ways to construct portfolios by balancing the use of uncorrelated assets to diversify risk and...
Read MoreWe have all turned into Fed watchers. The markets are clearly focused on when the Federal Reserve will increase short-term interest rates: by how much and how often. While it would clearly like to normalize interest rates after being...
Read MoreIn July, 2012, Mario Draghi, the President of the European Central Bank (ECB), made his famous comment that he would do “whatever it takes to preserve the euro.” Since that speech at the Global Investment Conference in...
Read MoreBuilder Confidence retreated for a 3rd consecutive month in March and New Home Starts in February saw their biggest month-over-month decline since January 2007, conjuring a fear of an organic slowdown in housing activity. While Housing...
Read MoreThird quarter GDP of 5% had increased hopes that the U.S. economy had reached “escape velocity” and that robust growth would lift employment and income, enabling the Federal Reserve to raise interest rates this year. The...
Read MoreForces continue to unfold evidencing a slowing global economy. Chinese exports show little signs of growth. Imports are down. Industrial commodities have suffered as a result. Abenomics has yet to turn around the Japanese economy. The...
Read MoreOil prices may be turning into the Grinch of this holiday season. Oil has dropped by more than 40% in just the past three months and contributed to volatile stock markets. We do not believe the sharp drop in oil prices is a sign of...
Read MoreThe first meaningful swoon in the stock market in quite some time culminated in October. On October 15, the VIX, which measures implied volatility for large cap stocks, reached 31, up 201% from its 2014 low of 10 on July 3rd. The...
Read MoreThis month we write about an area that has declined enough to enter bear market territory. The area of the market that has been hurt the most in the recent market turmoil has been the energy sector. Oil has a significant impact on...
Read MoreLast month, we wrote in the middle of a busy week for economic data. High yield bonds had sold off. A strong GDP report followed. Stock prices reacted favorably, and Treasury bonds lost value. After some initial volatility, the S&P 500...
Read MoreProfit taking has hit the high-yield bond sector and has led to lower prices to start the third quarter of 2014. Since peaking last month, the average yield of high-yield bonds has risen by 0.5% to 5.3% with the average yield spread to...
Read More“Tax Inversions” are in the news in a big way. Because the corporate tax rate in the US is the highest in the world, many companies have purchased smaller companies overseas where tax jurisdictions are less onerous and...
Read MoreWe are optimists by nature. Risks, however, are abundant. The US economy, as vibrant and diverse as it is, is affected by what happens in other parts of the globe. This month we look at China and try to assess what impact a severe...
Read MoreGovernment Is the stock market rigged in favor of high-speed electronic trading firms? Perhaps, but that should not matter to most investors.Recent media reports and a new book by author Michael Lewis focused on a form of...
Read MoreGovernment regulations are usually enacted in response to an event or to solve a problem. For example, Sarbanes-Oxley was in response to several corporate scandals, such as the Enron bankruptcy in 2001 - followed by the WorldCom...
Read MoreLast year, the US economy and corporate earnings grew in low single digits. Yet, the stock market did very well, anticipating accelerating growth – something we normally see in the early stages of economic recovery after a...
Read MoreIn the first half of the year, the US dollar (as measured by the US Dollar Index – DXY:CUR Bloomberg) and the S&P 500 were both coincidently strong. The dollar rose 6%, reaching its closing high so far this year at 84.58 on July...
Read MoreThe second quarter was unusual in many respects. Federal Reserve Chairman Bernanke’s remarks, starting in mid-May, but, particularly, his comments on June 19, really startled markets. His announcement that asset purchases by the...
Read MoreThe US Congress has given the Federal Reserve two mandates: promote price stability and full employment. Although many are concerned about inflation, it is not showing up yet in the statistics. Employment, however, continues to be an...
Read MoreThe financials have been leading this recent stock market rally, which is a very healthy sign. They were certainly beaten up, for good reason, during the financial crisis. Since banks were at the center of the crisis, it is probably a...
Read MoreJapan's "lost decade" is now into its third decade, and the Japanese people and their government have had enough. After ostensibly the longest running quantitative easing policy in history, on April 4th the new Central Bank Governor...
Read MoreThe first quarter is about to close, and shortly we will be entering earnings season. As Larry Kudlow, the economist and CNBC television host, often says, "Earnings are the mother's milk of stock prices." Certainly, earnings have been...
Read MoreAs investors, we have found that over the years and certainly over an investment cycle there is a high correlation between an economy and that nation's stock market. For the moment, that relationship seems to be broken in the United...
Read MoreAs we move into the fall election season, dangers associated with the “Fiscal Cliff” are becoming more of a possibility. Significant changes in the tax law and government spending will happen automatically if Congress does...
Read MoreAdvances in the United States in drilling technology promise to be a “game changer.” Vast resources of natural gas and oil, previously inaccessible, are now being tapped through new horizontal drilling and hydraulic...
Read MoreFinancials were the top performer in the S&P 500 for the first quarter. Since financials represent approximately 15% of the index, their performance has an important effect on the health of the stock market. The large banks, which are...
Read MoreRecent reports confirm that China’s economy is slowing. Just how much is a matter of debate since government statistics are unreliable. The accepted orthodoxy is that China must grow at least 8% a year to satisfy increasing...
Read MoreGold coins are often offered for sale on television to collectors, speculators, and to those who may want them “just in case.” But what if they were to become the coin of the realm again? Is that just a quaint idea, a...
Read MoreRecent data suggests an improvement in US housing activity. Although residential construction is not as significant a component of GDP as it once was, dropping from 6.5% of GDP in 2005 to just over 2% of GDP now, we monitor all the...
Read MoreThe markets are, it seems, more susceptible than ever to macroeconomic events. Although corporate profits have been strong and cash reserves high, equity prices have been buffeted by developments beyond management control. We expect...
Read MoreWhat is the future of the euro? All eyes are on Europe, except for those few who were briefly averted due to the futile deliberations of the super committee. The lengthy process of bailing out Greece from its debt burdens by giving...
Read MoreWas the recent signing of the long delayed trade agreements with South Korea, Panama and Colombia a bipartisan success? Perhaps. However, with few fiscal and monetary policy options remaining, we may actually see increasing interest in...
Read MoreA perfect storm? In recent commentaries we have touched on various themes currently affecting world markets. Certainly, Greece is in the news – again! With one year Greek government bonds yielding more than 130%, the bond market...
Read MoreAdults in the room? The recent brinksmanship over the debt ceiling has ended in a "compromise". No one is claiming victory in this unseemly debate and justly so. Nothing was accomplished. The Standard & Poor’s downgrade of the US...
Read MoreDamned if you do; damned if you don’t. What to do about the crisis over the debt ceiling negotiations in Washington? If the Government cuts spending too much, fiscal drag will slow the economy further and corporate earnings will...
Read MoreGreece is a small country, representing only 2.5% of Europe’s GDP – about the size of Delaware when compared to the US economy. Though relatively small, Greece’s troubles make the nightly news and influence world...
Read MoreAdmittedly, it is a small sample. Since Quantitative Easing (QE) is expiring June 30, we can only look at the period between the expiry of QE 1 at the end of March 2010 and the start of QE 2 in September 2010 to see what might happen...
Read MoreThe sequential traumas that Japan has been experiencing, while serious and dramatic in their own right, should bring into focus underlying issues that that have been building since her equity and real estate bubbles burst in the late...
Read MoreThe World is not Enough is the name of a James Bond thriller and is an apt description of the multiple challenges facing global growth. Globalization, which has enhanced living standards in the developing world, has also been referred...
Read MoreIn spite of the threat of rising interest rates, the US stock market has enjoyed a robust rebound after last summer’s fears of a double dip recession. The economy’s slow mend has played a minor role in the market’s...
Read MoreAs savers and investors, we are coping with the distortions caused by low real interest rates. Interest rates have declined over the last 30 years to where savers are now subsidizing lenders. Although the Federal Reserve is working...
Read MoreWhen the world financial crisis began, all economies acted, more or less, in unison to inject liquidity into the system, both to bolster the banks and to increase demand. Now we see divergent policies around the globe. Western Europe...
Read MoreThe anticipation and introduction of a new round of quantitative easing (QE) by the Federal Reserve spawned the recent simultaneous increase in the stock market and the decline in the dollar. The announced purchase of $600 billion in...
Read MoreProtectionism is a clear and present danger. The talk of “currency wars” could escalate into something more serious. As the political dust settles after the election next month, Washington will be under increasing pressure...
Read MoreNow that the consensus opinion is coming around to the slow growth case for the economy, speculation about a possible “double dip” is gaining currency. Slowing growth does not necessarily project to another recession....
Read MoreThe subprime crisis of 2007 has faded somewhat as the market has focused its attention on other issues, such as the slowdown in China and debt problems in the Eurozone. Yet, real estate will continue to be a challenge as surplus...
Read MoreConsumer confidence dropped significantly last month. The Conference Board measure declined from 62.7 in May to 52.9 in June. The University of Michigan Consumer Confidence Index, which is one of the Leading Economic Indicators (LEI),...
Read MoreUntil it becomes obvious that the eurozone trauma or some other crisis will sink the global economic ship, we will assume that the U.S. economic outlook is just one of slow economic growth. First quarter GDP was revised down to 3.0%...
Read MorePerhaps we can all agree that the major economic imbalance in the US and, in fact, the global economy was too much debt. That imbalance, which has been building over the past quarter century, is being addressed under the surface....
Read MoreThe most important question hanging over the market is, “When will we see severe government funding problems?” The downturn in global growth has been widespread among developed countries. Although the downturn was caused by...
Read MoreAlthough high budget deficits, subsidized interest rates and a significantly expanded Federal Reserve balance sheet (through quantitative easing) continue to be concerns, it is interesting that excess liquidity is being drained from...
Read MoreU.S. Government policy makers, not known for their grace, have a delicate balancing act to narrow the government deficit fast enough to prevent our economy from falling into a debt trap. A debt trap refers to the Hobbesian choice that...
Read MoreThe latest edition of the Federal Reserve’s (Fed) Beige Book, released Wednesday, January 17, 2018, continued to deliver a positive view of the U.S. economy. The Beige Book is a qualitative assessment of the domestic economy and...
Read MoreJim Nabors, who played the bumbling but lovable Gomer Pyle in The Andy Griffith Show and subsequent Gomer Pyle, U.S.M.C., passed away on November 30. Inspired by a couple of Gomer Pyle’s catch phrases, this month we highlight the...
Read MoreProductivity for the third quarter rose 3.0%, the largest one quarter increase since the third quarter of 2014 and over double the average quarterly growth rate since the start of 2009. This surge is significant, as weak productivity...
Read MoreJapan’s Nikkei just recorded a 16-day winning streak, its longest on record. When thinking about Japan, many who started following markets closely in the late 1980s know nothing but year after year of recession, deflation, and a...
Read MoreMaster Limited Partnerships (MLPs) appear to be a natural way to invest in the changing energy landscape. MLPs are exclusively focused on energy infrastructure in the United States and Canada. North American energy production has...
Read MoreOver the next few weeks, analysis of the Trump administration’s first 100 days will increasingly dominate the news cycle (April 29 is day 100). From a policy perspective, all the action (or lack thereof) will take place over the...
Read More