Gearing Towards Another Move 02-22-17

Today the Fed released the minutes from its last Federal Open Market Committee (FOMC) meeting held on January 31 and February 1. The details of the meeting show that the committee members leaned toward raising interest rates again “fairly soon” if upcoming jobs and inflation data are in tune with or better than expectations. Read more about Gearing Towards Another Move 02-22-17

Elections, Central Banks and Currencies 02-15-17

Germany’s Sunday legislative election of Social Democrat and former foreign minister Frank-Walter Steinmeier should not change the market horizon much. The left-of-center German president-elect, won 931 of the available 1,239 votes from the Bundestag lower house and representatives of its 16 federal states chiefly owing to the inability of the more conservative Christian Democrats to agree on a candidate of their own. Read more about Elections, Central Banks and Currencies 02-15-17

Perpetual Call Option 02-08-17

President Trump’s executive orders so far, while politically controversial, don’t have a significant near-term economic impact. However, one political event we are monitoring closely across the Atlantic is the upcoming European elections. Read more about Perpetual Call Option 02-08-17

As Expected 02-01-17

The Federal Open Market Committee concluded its first policy-setting meeting of 2017 today. Janet Yellen and her lieutenants voted to keep the benchmark federal funds rate at a target range of 0.5 percent to 0.75 percent. After the quarter-percentage point hike in December, and with uncertainty surrounding the new president’s fiscal and trade policies, it’s not surprising that the monetary policymakers stood pat this time. Read more about As Expected 02-01-17

What to Make of President Trump So Far 01-25-17

Less than a week since Inauguration Day, President Trump has signed a number of executive orders. Perhaps the one so far with the longest potential ramifications is the withdrawal from the Trans-Pacific Partnership, a deal still in negotiation phase that he inherited from Obama. The new president also plans to renegotiate the 23-year old North American Free Trade Agreement (NAFTA). Read more about What to Make of President Trump So Far 01-25-17

A Symbolic Speech 01-18-17

Yesterday, for the first time ever, a Chinese head of state—Xi Jinping—spoke at the World Economic Forum in Davos, Switzerland. He delivered the opening address.

Ironically perhaps, the leader of the largest communist country in the world spoke in defense of globalization and free trade. Of course, today China is largely communist in name only.

Xi astutely noted that “no one will emerge as a winner in a trade war.” While globalization has led to some problems, such as a widened gap between the rich and the poor, it is by no means the lone cause of the world’s problems. Read more about A Symbolic Speech 01-18-17

Highlighting a Critical Issue 01-11-17

Less than ten days before inauguration, the president-elect held his first press conference since the summer. First and foremost on his mind: cyber security. Of course, the accusations that Russian hackers interfered in the U.S. election offers some explanation why cyber security was a key topic in today’s conference, but in the broader picture, there’s no doubt that cyber security will play an increasingly major role in the defense of our nation and in the investment universe. Read more about Highlighting a Critical Issue 01-11-17

Rose Tinted 01-04-17

This afternoon the U.S. Federal Reserve released the minutes from its mid-December Federal Open Market Committee (FOMC) meeting, during which the policymakers raised the benchmark federal funds rate for the first time in a year, by one quarter of one percent.

The minutes show that Fed officials now think the gradual-tightening mantra they have repeated for a long time may have to change. It is expected that Donald Trump, who assumes office later this month, will usher in an era of significantly expansionary fiscal spending and higher debt.      Read more about Rose Tinted 01-04-17

Cyber and China 12-28-16

2017 fast approaches. Prospective tax cuts and possible infrastructure spending will likely face us, along with important developments in the cyber space. We believe that it will be no problem to deal with the upside. The downside risks, on the other hand, can be life changers. Many investors out there have yet to make up their losses from 2000-2002—never mind losses from the 2008 through 2009 meltdown. If you lost 80 percent in either the early 21st century battering or in 2008 to 09, you’d need a 400 percent gain to get even. Read more about Cyber and China 12-28-16

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