The world of investing is ever changing and teaches new lessons to even the most astute investors. For many in the industry, this is the hallmark of what keeps our work interesting and rewarding, even though the process can be incredibly humbling and frustrating at times. The last ten years underscore this inherent challenge, and … Continued
Is the yield curve telling us we are headed for a recession? Since the 1950’s, all U.S. recessions have been preceded by an inverted Treasury yield curve, which occurs when short-term interest rates exceed long-term interest rates. Given this historical correlation and the shape of the yield curve today, it is worth exploring this complicated … Continued
The familiar admonition, “Be careful what you wish for, lest it come true,” is age-old and universal, having been told in many forms throughout history from Greek mythology, to Chinese proverbs, to great works of English literature. Despite this inherent knowledge in our collective memories, it is simply human nature to ignore such advice and … Continued
When the year began, it seemed like the economic landscape was great and only getting better. Congress had just passed a sweeping tax reform package, leading economic indicators suggested acceleration in economic growth, corporate earnings growth was being revised higher, and even tensions in North Korea appeared to be softening. The stock market reacted favorably … Continued
As we reflect on the eventful year just passed, it is a good reminder of how difficult it can be to predict market outcomes. Even in the eighth year of a business cycle, and during a period when domestic policy struggles and geopolitical tensions were probably at their highest level in a decade, capital markets … Continued
In the months leading up to the presidential election, and now almost one year into President Trump’s term, there has been a great deal of ongoing speculation about how this President and Congress might influence the financial markets. In particular, and top of mind for many market participants, is the degree to which potential tax … Continued
Since 1982, the Federal Reserve Bank of Kansas City has held an annual economic policy symposium in Jackson Hole, Wyoming. This event, typically in late August, is closely watched by the markets in search of guidance about future changes in interest rate policy. Given the Fed’s recent track record of raising rates slowly, but lowering … Continued
Investors have had a lot to be excited about thus far in 2017. With stocks reaching new all-time highs and longer-term interest rates trending lower, every asset class, with the exception of commodities, has delivered a positive return. However, two important markets – the U.S. stock market and the U.S. bond market – have begun … Continued
As we reflect on the last eight years, various stages of the economic and market recovery have unfolded like chapters in a book. Many parts have told a predictable tale and, at various times, we have been left wondering if there would be an unpredictable twist or a surprise ending. While the story may be … Continued
With another year in the history books and equity markets off to a strong start in 2017, we can’t help but reflect on the Federal Reserve’s role in this elongated period of appreciation in the stock market. Recently, the improvement in the economic outlook has resulted in the Fed initiating a tightening cycle which has … Continued