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Number 1: The potential trade war seems to have become significantly more likely, post the recent round of Trump tweets on May 5th. Trade talks that seemed close to an agreement suddenly went up in smoke. We believe that a trade war is now over a 50/50 probability. While logic would imply that China and the […]

Macro Overview The ongoing trade dispute between the U.S. and China escalated in May as the U.S. signaled that it had not finalized a deal yet with China. The lack of a deal led to the U.S. announcing an increase in tariffs from 10 percent to 25 percent on $200 billion of Chinese imports. The […]

Federal Reserve balance sheet is heading toward $4 trillion and the federal deficit is $1 trillion a year. Inflation for consumer goods and services is under 2%. Inflation has appeared in asset pricing – stocks, bonds, real estate, and cryptocurrency. Combination of asset price inflation and technological advances has caused deflation in some consumer services.

Federal Reserve Chairman Jerome Powell seems to have been inspired by his viewing of the Dr. Seuss’ movie The Grinch this December. As Christmas was approaching, Chairman Powell, the Grinch himself, and his other Federal Reserve (The Fed) cronies were busy discussing raising rates and normalizing the balance sheet. The Fed —this group of Grinches—seemed resolute in […]

The past six months was a period of extremes for financial markets around the globe. U.S. stocks ended 2018 in the red, as they experienced their worst year since 2008. Negative volatility was also felt globally and across most other asset classes as bonds and commodities suffered similarly. Financial asset weakness was primarily caused by rising […]

Macro Overview A change in the Federal Reserve’s stance on the direction of interest rates helped buoy equity and bond prices higher in March, allowing U.S. equity indices to post the strongest first quarter in nearly ten years. The Federal Reserve scaled back its growth expectations for the U.S. economy and announced that it would […]

Some investors put all their money in one boat, the stock market. They ride the ups and downs of the market, moving things around as needed and generally trying to stay abreast of the constantly changing circumstances of business and the financial markets. If they’re smart, lucky, and/or have knowledgeable advisers, they get a decent […]

Macro Overview U.S. equities continued to defy negative sentiment and sanguine market readings as tepid economic data advanced stocks higher in February. Equities posted their best first two months of the year since 1991, rebounding from the volatile fourth quarter of 2018. Gross domestic product (GDP), the primary measure of U.S. economic growth, expanded at […]