The Federal Reserve raised the target range for the effective federal funds rates (EFF) again last week, now up to a range of 1.75% – 2.00%. They also raised the rate they pay banks interest on excess reserves (IOER) by 0.20%. With this bump, I wanted to see the print for the average bank prime…
Some Key Metrics to Watch
Macro changes occur at a glacial speed but these are typically the most important metrics to track. This is separating the signal (macro shifts, leading data points, etc.) from the noise (CNBC). Warning Signals from the Yield Curve One of the most basic yet crucial metrics is the yield curve, which has certainly received a…
Recent Updates – Insurance, Biotechs, Dividends and Rates
Here are some recent updates from this month, including some new investments and some thoughts on how the market is setting up in terms of the economic outlook, interest rates and higher yielding (dividend) stocks. New Investment – Chubb Limited (CB) Insurance is an interesting industry in which to invest. When run properly, it can…
How the Economic Cycle Impacts your Portfolio: Shifting to the Next Stage
There’s a general playbook for investing when it comes to the macro-economic business cycle. The cycle includes four stages: Reflation, Recovery, Overheat and Stagflation. You might also hear other terms used to describe each stage but we’ll run with these because Merrill Lynch made this nice chart for us. Within each stage, investment assets tend…
Potential Sea Change
Last week’s FOMC meeting may have signaled a coming change in the investment markets. During the press conference, Janet Yellen began to lay out how the Fed will start to reduce its balance sheet (i.e. all of the bonds that they have purchased through QE). She said it could begin in the very near future. …
The Unwind of Globalization
There have been a lot of people pushing back lately on some of President Trump’s trade policy proposals, stating that it will be bad for business to impose tariffs or renegotiate trade agreements. I find this amusing because that’s pretty self-explanatory. However, most of the people I hear pushing back in a public forum seem…
Chain Reaction: Dominoes 3 & 4
Well that didn’t take long. On Thursday afternoon France’s President, Francois Hollande, announced that he will not be seeking re-election. Could it be from his approval rating of less than 10%? Then the Italians voted against the reformation of their constitution in yesterday’s referendum, leading their Prime Minister, Matteo Renzi, to step down after just…
The Challenges Ahead for Long-Term Investors
I suppose this is my annual warning to long-term investors to tread carefully in the investment markets. 2016 has been a year of rotations with the net composite of a balanced portfolio not moving a whole lot (i.e. things that did well in the first half of the year have done poorly during the second half,…