Archive for the ‘Monthly Commentary’ Category

March 2017 – Monthly Commentary

May 22, 2017  |   Monthly Commentary   |     |   0 Comment

March 2017 The Federal Reserve didn’t disappoint last month, delivering the third rate hike of this cycle, pushing the overnight Fed Funds rate to 0.90%.  However, at the post-meeting press conference Chair Yellen delivered a “wishy washy” assessment of the economy which did little to instill fear in the bond market.  In fact, instead of tightening policy, the move actually eased monetary conditions.  Since raising overnight rates on March 15th, prices of Treasury notes and bonds ...

February 2017 – Monthly Commentary

April 04, 2017  |   Monthly Commentary   |     |   0 Comment

February 2017 Economic data released last month was solidly robust, with manufacturing continuing its recent expansion, non-farm payrolls surging, initial unemployment insurance claims touching a 17-year low, and consumer confidence continuing to hit post-crisis highs.  Even the Dallas Fed Manufacturing index outlook skyrocketed to 24.5.  That measure is a diffusion index and indicates that a full 91% of respondents view business as improving or remaining the same – while only 8.7% suggested the economy slipped.   To ...

January 2017 – Monthly Commentary

February 22, 2017  |   Monthly Commentary   |     |   0 Comment

January 2017 The election of Donald Trump to President of the United States continues to pose challenges to forecasting and investing in the capital markets.  Arguably, the world order has been turned on its head in ways that could not have been predicted.  The prevailing view prior to the election was that the European economy was to be forever mired in economic malaise; the U.S. economy was growing, albeit at a less than spectacular sub-2% annual ...

December 2016 – Monthly Commentary

January 20, 2017  |   Monthly Commentary   |     |   0 Comment

December 2016 The post-election euphoria in the stock market continued in December, lifting indices to just below all-time record highs.  The catalyst for the buying has been investor expectations of a more favorable business environment and, with it, accelerated profit growth.  Bond investors, on the other hand, have been grappling back and forth on President Elect Trump’s impact on the economy and the markets, engaged in a seeming circular logic.  Consensus seems to agree that Trump’s ...

November 2016 – Monthly Commentary

December 21, 2016  |   Monthly Commentary   |     |   0 Comment

November 2016 The landscape for fixed income changed dramatically with Donald Trump’s election victory.  While polling was close going into the election, the market seemingly priced-in a Clinton victory and a continuation of the steady, albeit modest economic growth of the Obama Presidency.  Instead, investors reacted swiftly to the change in leadership concluding that Trump’s rhetoric will translate into profit growth and an accelerating economy.  Industries that have seen the strongest reaction are banking, building, mining, ...

October 2016 – Monthly Commentary

November 15, 2016  |   Monthly Commentary   |     |   0 Comment

October 2016 Prior to the release of the October employment report, Bloomberg television welcomed a prominent economics professor to the show, asking him to give his first impression of the then soon to be released economic data.  During their idle chatter prior to the release, the professor reminded viewers that years back, Jack Welsh, the former CEO of General Electric had insinuated that the employment report was “made up” and not an actual reflection of employment.  ...

September 2016 – Monthly Commentary

October 25, 2016  |   Monthly Commentary   |     |   0 Comment

September 2016 To state the obvious, capital markets are complicated and susceptible to occasional problems related to supply and demand imbalances.  Typically, the problems become magnified at quarter-end, and the just-ended quarter was especially so.  With the October 14th money market reform deadline looming, money funds continued to flood the market with corporate and municipal note sales, while boosting their demand for Treasury Bills and Notes.   That demand added to the quarterly “window dressing” that banks ...

August 2016 – Monthly Commentary

September 15, 2016  |   Monthly Commentary   |     |   0 Comment

August 2016 With the Federal Open Market Committee scheduled to meet on September 21st, investors find themselves debating, yet again, whether or not the Fed will raise short term interest rates.  Recall, we were in a similar situation exactly one year ago.  Chair Yellen’s comments at last month’s Jackson Hole, Wyoming gathering of Central Bankers were interpreted as being mildly hawkish just as they were last summer, and the markets reacted accordingly. The yield-to-maturity of the 30-year ...

July 2016 – Monthly Commentary

August 17, 2016  |   Monthly Commentary   |     |   0 Comment

July 2016 Summer finally caught up with the bond market in July with the 10-year Treasury note virtually unchanged for the month. The benign backdrop was beneficial for the S&P 500, as the index finally broke to a new all time high, closing the month at 2,174. That rally came amid confounding economic data. Favorably, the employment report registered 287,000 new jobs in June assuaging concerns that job growth was stalling. Recall ...

June 2016 – Monthly Commentary

July 21, 2016  |   Monthly Commentary   |     |   0 Comment

June 2016 The madness continued in June as markets convulsed on economic and political surprises. As the month began, investors were debating whether the Federal Reserve would raise rates at its mid-month meeting, with committee members seeming to prepare investors for an imminent rate hike. That view quickly reversed with the release of the May employment report which showed a tepid gain of only 38,000 new jobs (subsequently revised lower to 11,000). With ...