Everything Is Great! Right?
View PDF September 20 marked the capstone of a summer run-up in the U.S. equity market. We saw a true market correction in February (S&P 500 Index down 10.1%) and a drawdown of more than 7% in March, but the memory of those experiences was obliterated by a smooth, steady climb, with the S&P 500 […]
Perspective on Turkey
Troubles in Turkey’s capital markets—a depreciating lira, plunging stock market, skyrocketing bond yields—are raising concerns about contagion. The country’s problems are unique to its circumstances and largely a result of internal policy, but investor concerns are starting to spread across all emerging markets, whether justified or not. EM investing has always come with heightened volatility, […]
Is This It for the Current Economic Expansion?
Real GDP growth in the U.S. hit 4.1% in the second quarter of 2018, the strongest quarterly gain since 2014. Many indicators corroborate the story of a thriving American economy: low unemployment, robust consumer spending, elevated business and consumer confidence, and growth in non-residential investment. However, a big contributor to growth was a surge in […]
Slow Burn
View PDF After a weak first quarter, the U.S. economy closed out 2017 with decent momentum, as GDP grew at a robust 3% annualized rate for the remaining three quarters. The first quarter of 2018 will likely be remembered for its sudden, brief correction and the return of volatility. True to form, however, the U.S. […]
Last Year, Not Last Week, Was Unusual
By Mark Andersen and Jay Kloepfer The S&P 500 entered correction territory last week, plunging more than 10 percent in five trading days after volatility exploded on Feb. 2. Investors betting on continuing low volatility saw big losses, and markets around the globe shuddered in response. As last week lurched along, with sharp reversals on […]
Sentiment Restored. Is It Time to Worry?
View Market Review The U.S. economy closed out 2017 with decent momentum, recording a solid 2.6% gain in GDP in the fourth quarter after growth above 3% in each of the prior two quarters. Investor sentiment felt disconnected as the year unfolded; the underlying global economy appeared to be steadily improving and capital markets reported […]
Analyzing the Impact of the New Tax Law
The federal tax law overhaul signed by President Trump at the end of last year, totaling more than 800 pages, marked the first comprehensive change to the U.S. corporate and personal tax systems since 1986. In broad strokes, the biggest changes include: Permanently reducing the corporate tax rate from 35 to 21 percent Temporarily reducing […]
Why So Sad?
The disconnect sharpened in the third quarter between the state of the underlying economy (pretty good) and sentiment (not so good)
Happy Anniversary, Black Monday
The U.S. stock market reached a new high today, coinciding with the 30th anniversary of Black Monday, an event of now-mythic proportions.
Why Is Inflation So Low?
View PDF We are now eight years into the economic recovery in the U.S., arguably the latter stages of a mature expansion and at a point where inflationary pressures typically begin to build. Yet price and wage inflation remain stubbornly subdued. Headline and particularly core inflation have drifted down over the past several months. Headline […]