Archive for the ‘Uncategorized’ Category

November 2019 – Monthly Commentary

January 28, 2020  |   Uncategorized   |     |   0 Comment

November 2019 As we ease into year end, the Fed has managed to avoid upsetting the capital markets as it did last December.  Fed Chairman Powell, at the recent post-FOMC press conference sounded a tone of neutrality with regards to policy and despite repeated questions about the next move in the overnight lending rate, he remained noncommittal.  He also faced questions about the repo market and the performance of the ...

December 2019 – Monthly Commentary

January 28, 2020  |   Uncategorized   |     |   0 Comment

December 2019 The bullish stock market that generated such outsized returns last year continues its upward trajectory in the opening days of 2020. Undeterred by a supposed Iranian plot to kill Americans, the United States’ removal of the supposed plot mastermind, the Iranian missile attack response, including the Iranian attack of a Ukrainian passenger aircraft, the various stock indices have reached new all-time highs. The bond market, ...

Employment Growth on Sustainable Path

October 08, 2014  |   Uncategorized   |     |   0 Comment

Below is a chart, we think you might find interesting.   We plot the total number of employees counted in the non-farm payroll survey (left scale 000s) and the number of Job openings (right scale, 000s) as tracked by the BLS’ JOLTs survey. Key observations: Number of Job openings has surpassed last previous peak Number of employees on the non-farm survey has surpassed the previous peak (when we were in the midst of a housing and construction bubble) Rate of ...

LIBOR Continues to Misprice Fed Rate Hike Expectations

September 29, 2014  |   Uncategorized   |     |   0 Comment

We put together a quick graph of short term interest rates and the market’s expectations of future rates.  The current LIBOR curve as measured by the LIBOR Futures market predicts rates to rise to between 1.09% and 1.95% from December 2015 to September 2016 (Charted as the blue shaded line below).  We then assumed that the Federal Reserve would begin to raise the Fed Funds rate in March 2015 and do so in 25bps increments ...

Financial Times – 7/17/14

July 17, 2014  |   Uncategorized   |     |   0 Comment

Michael Kastner, principal at Halyard Asset Management, says the increased regulatory oversight on US global banks means a catalyst to drive their share price higher is no longer present. He says investors are trying to work out whether “the Fed wants these banks to be innovative and create new products that can drive earnings or are we going back to an older safer banking model”. The divergence between banks and their price to book ratios is ...

Financial Times – 6/2/14

June 02, 2014  |   Uncategorized   |     |   0 Comment

Michael Kastner, principal at Halyard Asset Management, said: “It’s embarrassing for ISM, we usually get a revision a month or so later.” After the initial print that was softer than expected, Mr Kastner said: “I was scratching my head when it came that low.” US data mix-up sparks market swings

Corporate Profit Growth Fuels Shareholder Returns through Dividends and Repurchases

April 01, 2014  |   Uncategorized   |     |   0 Comment

Corporate Profit Growth Fuels Shareholder Returns through Dividends and Repurchases Share repurchases by S&P 500 companies increased 19% in 2013 – with a total of $129.4 billion executed in the fourth quarter.  This was a 1% increase compared to the 3rd quarter and when combined with quarterly dividends, represents the second highest quarter of dollars returned to shareholders on record.  The previous high was recorded in 2007. The share reduction has been widely quoted as being ...

Municipal Bonds – Value in a Risky Interest Rate Environment!

August 01, 2013  |   Uncategorized   |     |   0 Comment

Municipal Bonds – Value in a Risky Interest Rate Environment! •    Municipal Bonds Attractive Relative to US Treasury Notes -  Again •    Increase in yield to maturity a welcome development….But the rate is still low! •    Targeting AA rated paper as investors sold good bonds into a bad market •    Implementing interest rate hedges to offset higher rates Many investors are smarting from shockingly negative returns in bond funds, including ETFs and closed end funds.  Thus far, in 2013, longer ...

ETF’s “Gate” liquidity

June 21, 2013  |   Uncategorized   |     |   0 Comment

Did fixed income ETF’s sing their swan song yesterday?  Maybe not, but after the abysmal performance yesterday, investors must reevaluate the risk and liquidity of an ETF before assuming the product is a cost-effective proxy for a diversified fixed income portfolio.  In the midst of the fixed income rout, ETF sponsors found themselves unable to absorb the selling.  The Financial Times quotes a Citi e-mail in which the trader wrote, “We are unable to take ...

Could it happen here?

March 20, 2013  |   Uncategorized   |     |   0 Comment

Could it happen here? The recent news that the government of Cyprus is considering a one-time tax on the saving deposits held at Cyprus based banks is yet another example of the riskiness of holding more than a nominal amount of cash in a bank account.  While Cyprus if far different from the United States, both in terms of the fiscal state and banking oversight, it’s yet another example of why savers and investors need to ...