AND THE BAND PLAYED ON The Titanic took approximately two hours and forty minutes from its initial iceberg collision to its foundering. The ship’s band — hoping to help keep passengers calm — continued to play (waltzes and ragtime numbers*) for nearly all of that time,...
TRIPWIRES Inflation remains top of mind for investors, but we don’t think the analysis goes deep enough. Objectively, the current rate of U.S. consumer price inflation (5.4% year over-year) is worryingly high. However, we think there is too much focus on the current level and not...
PRESSURES Stocks drifted lower over the last two months before catching a bid in early October. Rising energy prices have raised concerns about growth and inflation. There have also been pressures from the Common Prosperity initiatives being pursued in China. We have seen a rise in...
GRADUALLY, THEN SUDDENLY “How did you go bankrupt?” “Two ways. Gradually, then suddenly.” So goes the line from Ernest Hemingway’s The Sun Also Rises. Politicians likely share a similar sentiment as to how quickly they’ve been confronted by the debt ceiling, which must be raised to prevent a...
FUNDAMENTALLY DRIVE Strong market returns this year have raised questions about their quality. Are they just due to easy money and fiscal profligacy? Earnings this year have handily exceeded investor expectations due to strong operating leverage, and the regional performance has tracked relative earnings growth. As...
SLOWING BUT SUSTAINABLE GROWTH The momentum continues under this remarkable recovery, with strong economic growth and profitability that have driven the equity rally. These gains have some investors wondering when the “good times” will end. Global growth is expected to peak at over 6.5% in the...
On Tuesday, August 10th, the U.S. Senate passed a $1 trillion bipartisan infrastructure bill on a 69-30 vote. The Infrastructure Investment and Jobs Act focuses on investment in roads, railways, bridges, and broadband internet among other things. Assuming the bill passes in the House and...
REDUCING SENSITIVITIES A mid-year slowdown has not yet appeared in the global economy or equity markets. But we have seen a notable drop in interest rates, which is curious in the face of hotter than-expected inflation reports. As shown below, rates have fallen steadily since a...
SEEING THE WHITES OF INFLATION’S EYES Debating whether the Federal Reserve (Fed) will “fire” against oncoming inflation is a fitting analogy as America turns 245. Troops defending Bunker Hill* during the early stages of the American Revolutionary War were told not to fire until they saw...
PASSING THE BATON The stock and bond markets look ahead at least six months, discounting what investors think are the most likely outcomes for growth, inflation and other key inputs. So it is critical to differentiate between what is likely behind us, what is the current...