As we commence the New Year, our thesis has not changed from that which we held 12 months ago; namely, U.S. interest rates are artificially low and the U.S. economy is performing better than general consensus believes. To fully clarify where we find ourselves at this stage of the economic cycle, we’ll first examine the […]
Prior to the open of trading on the last day of the month, the Federal Reserve took action to extend swap lines and lower the interest rate on loans to the European Central Bank. The market interpreted the action as being positive for the stock market and negative for the bond market. Unfortunately, the positive […]
Investors continued to grapple with exogenous events as volatility in the capital markets remained elevated throughout October. For much of the month, greed ruled as investors moved to buy equities amid a growing perception that the European Union had reached consensus to support the fiscally challenged members of the common currency. Indeed, approval of fiscal […]
Financial anxiety remained elevated during September as evident in the hyper-volatility of the stock market, acute widening in credit spreads, sharp rally in the U.S. Dollar, and the continued flight to U.S. Government debt. Our opinion is that with stability returning to the stock market and bank rumors subsiding, the price of corporate bonds will […]
Echoes of October 2008 were evident in the capital markets through much of August, as investors reacted harshly to ongoing deficit bickering in Washington and the downgrade of U.S. Government debt by Standard and Poor’s. While volatility was not near the level witnessed in the fall of 2008, the performance of the capital markets certainly […]
The fragile and uneven economic growth witnessed so far this year was put at risk by the childish bickering of our elected officials in July. The posturing and gamesmanship that went into negotiating the debt ceiling was far worse than anyone had expected. To be certain, damage was done to investor and consumer confidence, as […]
Investors grappled with the fear of “what if,” as the European debt crisis continued to drag on through much of June. Commencing with the first trading day of the month, risky assets swooned in favor of the relative safety of U.S. Treasury debt. Driving the fear was a concern that the Greek legislature would fail […]
As 2010 came to a close, consensus opinion was that Gross Domestic Product would expand at a 3% to 4% annualized rate for the first six months of 2011. Now, as we enter the final month of the first half, economic growth is certain to fall short of that goal. With that outcome, we’ve been […]
Fixed Income Market Recap Economic data released during the month of April were solidly representative of a self-sustaining economic expansion. Of the major indicators, retails sales were surprisingly strong, consumer confidence improved smartly, and even the housing market showed some life, with housing starts and building permits both registering better than expected monthly results. However, […]
1st Quarter 2011 Municipal Bond Highlights • Short maturity yields are low • Long end yields have corrected • Yield curve is historically steep • Credit spreads are attractive Municipal bonds suffered a decline in price after an apocalyptic prognostication from layman during the 4th quarter of 2010. Suggestions that the municipal market faced defaults […]