Over the last few months, we become increasingly concerned about companies in the Energy sector, specifically Oil & Gas E&P (Exploration & Production) companies which, in our opinion, have become disconnected from the oil price, which has largely traded in a range even as many of these stocks have been punished. Through August 30, 2019: […]
A Former Fed Governor Gets Political and Reduces Confidence
After many months of criticism and complaints about President Trump jaw-boning the Fed, an influential former Fed governor, Bill Dudley, retaliated in an op-ed on Bloomberg. However, instead of taking the high road and defending Fed independence such as a group of former Fed Chairs did recently, he took the low road, all but suggesting a weaponization of the Fed to influence a political outcomes
Five Things to Consider- Week of August 19th 2019
Airbus Harnessing AI in Bid to Save Millions on Finance Tasks Artificial Intelligence (AI) is most often thought of in applications such as self-driving cars and virtual receptionist platforms. However, one application is much more feasible: financial AI. Finance tasks, such as reviewing accounts payable, are tedious and often are especially susceptible to human error. […]
Why are the markets more volatile? One reason — the data is hard to interpret.
Whether it’s inverting yield curves, or the strong US consumer, conflicting economic data both hard and soft, has been causing fits for economists, central bankers and investors. Add in macro uncertainty primarily related to trade wars of all types (US/China, S.Korea/Japan, UK/Europe) and central bank activism and you have a potential wicked stew of contradictory […]
Finally, a Worrisome Yield Curve Inversion?
This week, we actually had a yield curve inversion that potentially matters – the 2-year treasury actually briefly yielded more than the 10-year treasury. But why would anyone demand less return for lending for 10 years than for 2 years? Pretty perverse. More perverse than $16 trillion of negatively yielding bonds around the world? Suffice […]
Fed Watch: A Notable and Vocal Dissent
We noted a few days ago that the Fed’s decision to lower interest rates wasn’t unanimous. Two Fed voting members dissented, including Eric Rosengren of the Boston Fed. Most interestingly, Mr. Rosengren released a memo two days later revealing his logic and justifying his decision in a series of charts. https://www.bostonfed.org/news-and-events/press-releases/2019/statement-of-eric-s-rosengren It’s a quick and […]
Five Things to Consider- Week of July 28th 2019
Walmart’s Semi-Secret Effort to Become Internet-Cool The millennial “influencer” culture has become a staple of modern day society. The brands that tend to appeal to influencers are environmentally conscious, primarily online-based, and usually sell higher quality products. This description might seem at odds with Walmart’s targeted customer base – and in a general case it […]
Crossing the Rubicon – Buybacks Fueled by Debt
We read earlier this week that Goldman projects U.S. companies are on pace to break another record for share repurchases in 2019, almost $1 trillion, a 13% increase over 2018. Companies that actually execute on buyback plans were up 26% through mid-July. As a general rule, we like the idea of companies using excess cash […]
Fed Day – July 2019: Meeting Expectations, then Fumbling the Explanation
As expected, the Fed lowered rates by 25 bps and indicated that it would be ending its balance sheet reduction a few months earlier than anticipated. Notably, two Fed members dissented preferring to keep rates where they were. But, after a virtuoso performance in June, Chairman Powell fumbled the ball during the presser and the […]
Five Things to Consider- Week of July 22nd 2019
What Do Silicon Valley Tech Workers Earning $100,000 Call An Old Van? Home. The Bay Area has struggled to get the homeless off the streets, but now a new issue has emerged: highly skilled tech employees making their abode in vans. According to this Hoover Institution article, an annual income of $130,000 is required on […]
