Author Archive
January 2018 – Monthly Commentary
January 2018 The Federal Reserve, in managing the U.S. economy, is tasked with the dual mandate of ensuring full employment and stable inflation. The mandate is somewhat contradictory in that at full employment the tight labor force is likely to force wages higher which, in turn, risks pushing the overall level of inflation higher. That is, of course, if the numbers accurately reflect the actual rate of inflation, which we regularly argue is not ...
December 2017 – Monthly Commentary
December 2017 While the team at Halyard evaluates the economic and market backdrop on a daily basis, we like to commit those thoughts to paper periodically, and especially so as we kick off the new year. Our starting premise this year is that the United States economy closed out 2017 with unmitigated strength. From a sector by sector perspective, we’re delighted to find the strength was broad based and not concentrated in any one ...
November 2017 – Monthly Commentary
November 2017 In 2004, an acquaintance left his job as a banking clerk to become a real estate sales agent. Almost overnight his income doubled as the homes he represented sold briskly. The market was so hot that he was working seven days a week and his income soared well over $200,000. However, in 2006 sales began to slow and buyers were grumbling that home prices had grown out of reach. Builders ...
October 2017 – Monthly Commentary
October 2017 Last month marked the 30th anniversary of Black Monday, October 19, 1987, prompting us to take a look back at how the Dow Jones Industrial Average has evolved since that infamous day. Of the 30 stocks in the index at the time, Bethlehem Steel, Eastman Kodak, GM, Union Carbide, U.S. Steel, and Woolworths have all gone through bankruptcy. Some reorganized and reemerged, but most didn’t. Sears, which also was part of ...
September 2017 – Monthly Commentary
September 2017 Signs of excess abound in the capital markets as the ongoing emergency monetary policy supports frothiness and exuberance at every turn. Last month, billionaire Warren Buffett commented that he wouldn’t be surprised if the Dow Jones Industrial Index, currently valued at 22,600, climbed to 1,000,000 in the next one hundred years. In making that audacious prediction, Mr. Buffett seemed to be showing unbridled confidence in the stock market. However, solving for the average return, ...
August 2017 – Monthly Commentary
August 2017 On August 2 the Treasury Borrowing Advisory Committee (TBAC) released, via the U.S. Treasury Department website, its roadmap for reducing the Federal Reserve’s balance sheet. The TBAC is a liaison of senior members of money center banks and investment firms and the Treasury Department. The goal of the group is to keep the Treasury informed as to the thinking of the largest buyers of U.S. Government debt. Typically, the group focuses on supply and ...
July 2017 – Monthly Commentary
July 2017 The equity market remained a bastion of tranquility in July as the S&P 500 rallied 1.9% and the volatility index (VIX) touched an all-time low of 8.84 late in the month. A telling example of the complacency was on display in a Bloomberg TV interview. The analyst being interviewed was asked how she could offer a buy recommendation on a stock with such a lofty Price/Earnings ratio. The analyst responded that yes, the stock ...
June 2017 – Monthly Commentary
June 2017 We knew it had to come at some time, but the elusive question has always been when? The question we refer to is when the European Central Bank (ECB) would finally signal that they were going to ease off of ultra-stimulative monetary policy. At the late June press conference ECB President Mario Draghi took the first step, albeit a tiny one, and hinted that quantitative easing could be tapered at some point in the ...
May 2017 – Monthly Commentary
May 2017 We’ve written on several occasions about the robust job market and the most recent Job Openings and Labor Turnover Survey (JOLTS) served to further bolster that fact. JOLTS represents the inverse of the unemployment report in that it measures the number of unfilled jobs in the economy. Since touching a low of on 2.1 million in the summer of 2009, job openings have steadily grown, with the latest measure surpassing six million for the ...
April 2017 – Monthly Commentary
April 2017 Last month the Commerce Department reported that the U.S. economy expanded at a 0.7% annualized rate, below consensus forecast of 1.0%. Much was made in the media that such anemic growth is an indication that the economy is at risk of tipping into recession. It seems like that proclamation is made this time every year. At first glance the outcome was disappointing, but we caution readers not to place too much credence in the ...
