September 2024: Shifting Winds: A Period of Repricing
The Global Stock Market Index is down just over 3.5% this week. Why the sudden shift in momentum? Well, this week investors began to reassess their assumptions on the path of Fed rate cuts. Just three days ago, the Fed Funds Futures were pricing in a 25bps cut this month and potentially four cuts by […]
August 2024: Interest Rates: A New Phase
Federal Reserve Chairman Jerome Powell delivered a speech in which he said the following: “The time has come for policy to adjust… The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks… Inflation has declined significantly. The labor […]
August 2024: Market Volatility: A Healthy Reset
This week we want to touch on two topics: first, the current stock market pullback and second, our recent shift in public fixed income holdings. The stock market has had a rough couple of days, continuing its recent pullback since the middle of July. As of writing this note, the global stock market has fallen […]
June 2024: Interest Rates: A Temporary Peak
In the last few years there have been many economists and pundits arguing that we’ve entered a long era of rising interest rates. Recently James Grant, editor of the Interest Rate Observer, was asked his outlook and gave the following core reasons for his long-term expectation for higher rates. Persistently high inflation Significant fiscal deficits […]
June 2024: Chinese Equities: Value Beneath the Surface
This week we want to briefly discuss the Chinese stock market. Since the beginning of 2021, their stock market has declined by almost 50%. While China has the second largest economy in the world, their stock market now accounts for just 2.4% of the global stock market capitalization. Switzerland has a similar stock market capitalization […]
April 2024: Multi-Family Housing: A Resilient Asset
For about a year now, investors have been expecting a collapse in apartment values along with a corresponding decrease in rents. We’ve argued against this thesis, expecting rents to hold up and support multi-family housing prices. Today we’d like to share a few data points that highlight the resiliency of the apartment sector and show why […]
October 2023: Rising Bond Yields: What They Mean for the Economy
The 10 Year US Treasury Bond Yield brushed 5%. This is the highest yield on that bond since July 2007. If bond yields remain at these elevated levels, this will be the third consecutive year of losses in that critical financial market. As you can see from the table, three consecutive negative years hasn’t happened […]
September 2023: Higher Interest Rates: Navigating a Tough Transition
This week want to highlight some of the impacts higher interest rates are having on the economy. The Fed has been raising rates now for over a year and a half. They have increased their overnight lending rate from 0% to 5.5% over that period. This is the largest increase in rates since the 1970s […]
August 2023: The U.S. Credit Downgrade: What It Means for the Economy
Fitch (one of the big three Ratings Agencies—the others being S&P and Moody’s) reduced its credit rating on US bonds from AAA (the highest possible credit rating) to AA+ (the second highest credit rating). The company cited “a deteriorating fiscal position over the next three years and repeated down to the wire debt negotiations”. This […]
June 2023: Student Loans: What the Court Ruling Means for the Economy Going Forward
This morning the United States Supreme Court ruled against the Biden Administration’s plan to forgive up to $430 Billion in student loan debt. In a 6-3 decision, the court disagreed with the White House that the proposed forgiveness plan was merely a modification of an existing program. Chief Justice Roberts said, “the Secretary’s plan has […]