Author Archive
February 2019 – Monthly Commentary
February 2019 It would appear that economic pundits believe that the U.S. economy is either sustainably robust or faltering and on the verge of recession. Certainly, Central Bankers around the globe are suspiciously reassuring that economic growth is just right and in case things go awry, they stand ready and able to act. Much as Fed Chairman Powell did in his speech last month, European Central Bank President Mario Draghi ...
January 2019 – Monthly Commentary
January 2019 The January Federal Open Market Committee (FOMC) meeting yielded no rate hike and a dovish outlook for interest rates, as expected. Chairman Powell concluded this meeting with a press conference as will be the convention following every FOMC meeting going forward. The standard to date had been to have a press conference every other meeting. Our guess is that he would have preferred to skip this one given ...
December 2018 – Monthly Commentary
December 2018 As we expected, the Federal Reserve lifted the overnight lending rate by 25 basis points in December and indicated that they would lift rates two more times in 2019, backing away from their forecast of more frequent rate hikes. Also, as we expected, Fed Chair Powell gave a dovish assessment of the Fed’s view of the economy and markets. However, that did little to calm investors, with December ...
November 2018 – Monthly Commentary
November 2018 As the fourth quarter began, the S&P 500 index sat just below an all-time high, with expectations that earnings would continue to surprise to the upside and Q4 GDP would again post 3% or greater growth. But those expectations were almost immediately dashed by a trifecta of confusing news in the form of Chairman Powell backtracking on his hawkish comments from a month earlier, plunging oil prices, and ...
October 2018 – Market Commentary
October 2018 In recognition of the strength of the economy Fed Chairman Powell delivered the most hawkish speech of any Central Banker in the last ten years on October 2nd. Speaking before the National Association of Business Economists he described the economy as operating with “limited slack” and that “the Fed would act with authority if inflation expectations shift.” There are many observers who would describe the Fed’s current pace of rate hikes as already acting ...
September 2018 – Monthly Commentary
September 2018 The Federal Reserve releases the value and composition of their Open Market holdings every Wednesday afternoon. These are the securities the Fed bought when, in their judgement, the economy demanded artificially low interest rates. On Wednesday September 5, the value of the Open Market holdings fell below $4 trillion dollars for the first time since peaking at $4.24 Trillion in April 2017. That represents a reduction of approximately 5% and a milestone in monetary ...
August 2018 – Monthly Commentary
August 2018 The U.S. economy continues to chug along with the second quarter growing at a revised 4.2% annualized rate. That strength has carried into the third quarter with the Atlanta Federal Reserve forecasting 4.3% growth for the period. That growth seems to have emboldened equity investors as the S&P 500 posted an all-time high of 2,916.50 on August 29th. The index has since pulled back marginally, but all signs suggest that new records are likely ...
July 2018 – Monthly Commentary
July 2018 The dog days of summer are upon us and the U.S. market has been relatively calm despite the daily barrage of news from around the globe. That’s not to say that global macro events are not on the mind of investors. Quite to the contrary. Donald Trump’s trade war is making the headlines daily, the health of the European banking system continues to be a worry, and the drama of The United Kingdom’s divorce ...
June 2018 – Monthly Commentary
June 2018 In the days and weeks leading up to the recent imposition of tariffs on China, nervous investors sold stocks and pushed bond yields lower. However since the tariffs went into place stock prices have risen, with the S&P 500 just ticks away from its recent high and less than 3% away from an all-time high. Apparently, investors have chosen to look past the immediate trade rhetoric and are focusing on the coming earning season, ...
May 2018 – Monthly Commentary
May 2018 The bastion of calm that swept over capital markets evaporated in May, as a number of emerging market economies and their markets suffered under the strain of bad policy. After years in financial purgatory following their 2001 default, Argentina is again facing financial strain. The serial defaulter returned to the global bond market two years ago with a $16 billion multi-tranche deal that received $70 billion in orders. Investor demand had grown so strong ...
