Fed Rate Cut Late In First-half Of 2024?---creates Reinvestment Risk For New Short-term Investments Made Early In 2024 –record Budget Deficits--higher Rates For Longer—end Of Abnormal ”cheap Money” Era?—attractive Real Long-term Treasury Rates—2017 Tax Law Expires In 2025—2024 Elections Key To New Tax Legislation—

Higher for Longer—The Likely First Rate Cut—Reinvestment Risk for Treasury Bills Follows Our previous Commentaries focused on how the Fed’s failed stop-and-go rate experience in the seventies could potentially shape... Read More »



Fed Manages Unprecedented Tightening Cycle—core Inflation Outlook Trending Favorably--declining Wage Increases Will Likely Reflect Pass-through Of Lower Future Inflation—history Shows Relative Stable Equity Markets In Presidential Election Year — July Funds Rate The Peak Rate?—peak Rate Continues Some Time Into 2024

Fed Manages Unprecedented Tightening Cycle—so Far Successfully---reduced Inflation While Unemployment Remained Historcally Low The Recent July Consumer Price Index (Cpi) Report Underscores The Fed’s Apparent Success, So Far, In Effectively... Read More »

Economic Momentum Perplexes Forecasters—interest Sensitive Sectors Defy Fed’s Rate Increases--consumer Spending Slowed After January—dwindling Excess Consumer Savings Clouds Holiday Spending— Encouraging Inflation Signs—could July Rate Hike Be The Peak?

Economic Momentum Perplexes Forecasters The Covid Pandemic Caused, In Part, Disruptions And Accelerated Changes That Continue To Puzzle Economic Forecasters In The Current Economic Environment. A Clear Example Of This... Read More »

Post-covid Disruptions Produce Both Greater Economic Uncertainties And New Investment Opportunities—excess Savings Supports Consumer Spending Through The Holiday Season——fed Should Stabilize Inflation By Setting A Range Rather Than A Single Point Inflation Goal—investors Should Expand Ther Focus Into 2024 To Take Advantage Of Narrow Breadth Market Rally

Post-covid Disruptions Produce Greater Economic Uncertainties The May Jobs Report Surprised Everyone By Substantially Exceeding All Forecasts. This Example Highlights The Frustrations Economists Face Attempting To Forecast The Current Economic... Read More »

Fed Dancing Between The Raindrops—fighting Inflation While Avoiding Economic Hit—5-5.25% Likely Peak Funds Rate--core Services Inflation Trending Lower—positive Impact On Pce Price Index--shelter Inflation Likely Trending Lower In The Second Half— Positive Impact On Cpi

Fed Dancing Between The Raindrops—fighting Inflation—avoiding Recession— Fed To Keep Funds Rate Steady Until Year-end—strongly Committed To 2 Percent Inflation Objective—5-5.25% Likely Peak Funds Rate Act One Of The Hiking... Read More »

Debt Ceiling--april Tax Collections Fall Short—debt Ceiling X-date Moves Closer—slim Republican Majority—swing District Republicans Likely To Vote For A Higher Debt Ceiling--debate May Increase Equity Market Volatility—seek Out Investment Opportunities That May Result

Debt Ceiling Uncertainties—extraordinary Measures Will End Soon Uncertainty Continues To Grow Concerning The Outcome Of The Debt Ceiling Debate. Treasury Reached The $31.4 Trillion Debt Ceiling Borrowing Limit January 19th... Read More »

Fed “may’ In May—powell No Rate Cuts This Year-- Markets Look For Cuts At Every Fed Meeting— Systematic Cause For Bank Deposit Runs, The Fed Itself-- Reduced Mid-sized Bank Deposits Restrain Credit And Economic Growth--a Shortage Of Growth Favors Growth Equities—focus On Upcoming Banks Quarterly April Earnings Releases—commercial Real Estate Loans Dominate Mid-sized Banks—most Mid- Sized Banks Meet Federal Risk Tests——fed Needs To Catch Up To Systematic Communications Revolution

Fed “may” In May, Rates Peak, Powell No Rate Cuts This Year, Financial Futures Markets Look For Rate Cuts At Every Fed Meeting Post May The Fed indicated at its... Read More »

Fed Fights Itself—restrictive Rates Vs Qe--banks Awash In Deposits—baby Boomers Retiring—removes Key Job Skills And Knowledge—impacts Productivity— Automation Technologies A Substitute— Rapidly Growing Boomer Social Security And Medicare Costs— Funded By Higher Taxes After The Presidential Election

The Fed Fights The Fed—restrictive Fed Proxy Funds Rate  While Financial Markets Fight The Fed, At The Same Time, The Fed Fights Itself With Both Restrictive Fed Proxy Rates And... Read More »

Geopolitical Restructuring December Commentary

The Year Ahead-- Looking Beyond 2023 At this time of the year, traditional year-ahead forecasts emanate from “Wall Street. Our Commentary, in two parts, will first look into next year.... Read More »

Inflation Moderation Lags Economic Slowing—Increases Uncertainties for Fed Decisions—M2 Money Stock Growth Rate Declining Rapidly—If Sustained--Economy May Slow Sooner Than Forecasts—Fed Pivoting Sooner?—Treasury Market Depth Below Historic Norms--Third Year of a Presidential Term—a Very Good Year for Stock Market Performance--Presidential Campaign Begins November 9th—Could Bring Pressure on Chair Powell to Pivot

Fed Recognizes Risks to the Economy from its Rapid Rate Increases—Result-Lower Rate Increases at a Measured Pace As broadly noted, monetary policy impacts demand and inflation with long and variable... Read More »

Broad Lowering of Earnings Estimates Likely During Quarterly Reporting Period — Monetary Policy Changes Impact Economic Output Before Prices — Increases Chances for Fed Errors – Post-Covid Era Regionalization Benefits North America – End of Zero Rate Environment – Cash as an Asset — Recognizing Risks, Long-Term Equity Values Likely Created

Chair Powell Continued to Caution Against Prematurely Loosening Policy — Investors Finally Listened Investors, prior to the recent August CPI report, continued to invest, in our view, “hoping” that inflation... Read More »

Chair Powell — Read My Lips — “Restrictive Policy for Some Time” — Treasury Actions May Reduce Near-Term QT Concerns — Service Sector Inflation May Prove Sticky Due to Wage Cost Pressures — Shelter Inflation Increases into First Half of 2023 — QT May Reduce Multiple Inflation – Corporate Fundamentals Regain Focus as a Result

Chair Powell—Sensitive to Fed’s Errors in the 70’s – Avoid Prematurely Loosening Fed Policies Our past Commentaries referred to the Fed’s failed stop-and-go interest rate policies during the inflationary seventies... Read More »

Goods Inflation Likely Moderating — Inflation Focus Shifts to Services and Wage Costs — Economy Slowing-Mild or Deep? — Fed Must Avoid 70’s Stop-and-Go Rate Policy Errors — Equity Market Hopes – Is That a Strategy?

GDP Second Quarter Decline — First Real Signs of Economic Slowing — -First Quarter Quirky Decline Masked Internal Growth The government’s “advance” estimate for second-quarter GDP showed a 0.9% decline.... Read More »

Russo-Sino Alliance-Post-Post-Cold War — Erodes Globalization-Russian Control of Gas Supplies May Force Germany to Ration — German Economy Suffers Next Winter

Russo/Sino Alliance — Post-Post-Cold War — Erodes Globalization — Russia’s Control of Gas Supplies to Europe — Germany May Ration — German Industrial Production Suffers—Increase Depth of European Recession—European Central... Read More »

Sharp Market Declines — Negative Wealth Effect — Underwrites Fed Policies – Strong Employment Gives Fed the Umbrella for Aggressive Policies — QT Pressures Multiples — Refocus on Earnings Leads to Stock Selectivity – Less Focus on Broad Indices — Negative U.S. and China Workforce Demographics Changes Globalization

Current High Levels of Inflation — Broadening Impact With its May meeting, the Fed announced more aggressive tactics in its war to diffuse inflation. Figure 1 provides an updated map... Read More »

Fed Policy — Dancing Between Raindrops — Fed Tightening and Fiscal Policy Drag Tests 2023 Economic Outlook — Wage Pressures a Secondary Inflation Impact Could Lengthen Higher Inflation — Accelerating World Food Inflation Could Affect Emerging Market Debt Obligations — Fixed Income View Change

Current High Levels of Inflation—effect Broadening According to the Cleveland Fed, the median Consumer Price Index (CPI)  provides a better sense of  underlying inflation then either headline CPI or CPI... Read More »

“Putin Shock” — Financialization of Warfare Threatens “Risk-Free” Status of U.S. Govt. Debt — Can the Fed Thread the Needle Between Soft Landing and Disinflation? – Will Planned Rate Increases Achieve Sufficient Positive Real Rates to Lower Inflation? — Will Eroding Consumers’ Real Incomes Lead to Slower Economic Growth and Shift Away from National Brands? – Will Tight Labor Markets Lead to Higher Productivity? –Displacement and Replacement?

“Putin Shock” Underlines Eurasian Threat to Western World—U.S. Global Military Power and U.S. Dollar Reserve Status Go Hand-In-Glove We titled our last commentary The “Putin Shock” Could Create Shocking Changes... Read More »

“Putin Shock” May Create Shocking Changes – Inflation Becomes Viral? — Quantitative Tightening (QT) Lower Multiples? –Wage Pressures and Tight Labor Markets Lead to Higher Productivity?

COVID Variants Lower Forecast Confidence — Greater Market Volatility Americans entered 2021 with the hope that the miracle of vaccines would lead to an “end” to COVID as a major... Read More »

Fed Rate Liftoff and Balance Sheet Runoff (QT) Difficult to Pull off in Parallel — Produces Heightened Policy Risks — QT Could Reduce Market Liquidity — Earnings Growth Then Key to Equity Performance Rather Than Multiples — Negative Real Rates Remain — Result Limited Economic Restraint — Consensus Expects Inflation to Moderate Around Mid-Year — Risk to That Consensus Potential Extended Wage Pressures

COVID Variants Lower Forecast Confidence — Greater Market Volatility Americans entered 2021 with the hope that the miracle of vaccines would lead to an “end” to COVID as a major... Read More »

COVID Variants Lower Forecast Confidence — Greater Market Volatility

Fed Rate Liftoff and Balance Sheet Runoff (QT) Difficult to Pull off in Parallel — Produces Heightened Policy Risks — QT Could Reduce Market Liquidity — Earnings Growth Then Key... Read More »

2022 – the Year Ahead Living With COVID Variants – More Mini-Cycles Transitory or Persistent – How Long Will Inflation Take to Return to Low 2%?

Living With COVID Variants — Both Long-Lasting and More Mini-Cycles The economic outlook for 2022 and its future path depends, in part, on the likelihood of unpredictable breakouts of new... Read More »

Inflationary Supply Shocks – Will the Fed’s “Largely Transitory Inflation” View Prove to Be Transitory as Well? COVID Health Risk Gap – White-Collar Health Risks Compared to Blue Collar Workers – Will It Lead to Structural Changes in Job Markets?

Worker and Product Shortages — the Outcomes Will Help Determine How Long “Largely Transitory Inflation” Will Last This year provided investors with extremes of euphoria and worry. With 2021 moving... Read More »

Fed Tapering — Monetary Policy Still Accommodative — Potential Changes in Fed Membership More Dovish Policies — Financial System Awash in Cash, Fed Drains Cash Using Repos – Delta Variant Likely Peaked, Mini Cyclical Fourth Quarter Rebound — Shipping Delays and Locked Down Asian Factories Negatively Affect Fourth Quarter Sales and Earnings — Pricing Power of Goods Suppliers Will Determine Their Ability to Protect Margins From the COVID Spillover — Shelter Cost Inflation Heavy Weighting in CPI and PCE — Lags Real World Change 6-12 Months – Rent Increases Sticky

Fed Tapering — Reducing Securities Purchases — Modest Impact in the Economy – Monetary Policy Remains Accommodative In its recent meeting, the Federal Open Market Committee (FOMC) stated it looks... Read More »

Commentary: Monetary Policy Still Accomodative---Fed Board Changes More Dovish Policies--Covid Spillover On Supply Chains Impacts 4th Quarter Earnings--Higher Shelter Costs Lag Effect On Price Indices--Sticky--Delta Variant Faced Mini-Cyclical Rebound

NOT APPROVED BY FCAG COMPLIANCE Fed Tapering—Monetary Policy Still Accommodative—Potential Changes in Fed Membership More Dovish Policies—Financial System Awash in Cash, Fed Drains Cash Using REPOs---Delta Variant Likely Peaked, Mini... Read More »

History Shows Virus Impact Greater After the First Year — Global Variant Snarls Supply Chains — Slows Inventory Rebuild — Inflationary Impact — Consumer Caution Slows Service Industry Return — Impacts Employment Growth — Variant May Delay Fed Tapering or Slow Its Rollout

Delta Variant Increases Inflationary Pressures—Supply Chains Snarled Most recently, the growing spread of the COVID-19 Delta Variant forced China to curtail cargo operations at both air and container ports. According... Read More »

History Shows Virus Impact Greater After the First Year — Global Variant Snarls Supply Chains — Slows Inventory Rebuild — Inflationary Impact — Consumer Caution Slows Service Industry Return — Impacts Employment Growth — Variant May Delay Fed Tapering or Slow Its Rollout

Delta Variant Increases Inflationary Pressures—Supply Chains Snarled Most recently, the growing spread of the COVID-19 Delta Variant forced China to curtail cargo operations at both air and container ports. According... Read More »

China—Tech Clamp Down—Why?---How to Invest In China--Now

SINO/U.S. TENSIONS CONTINUE TO INCREASE Our earlier Commentary (10/17/2018)  focused on whether the Sino/U.S. trade war would eventually grow into Cold War II.  For some period now, that concern moved... Read More »

Looking Beyond COVID-19 —Grandfather Clock Economics — Fed’s New Framework — Maximizes Employment — a New Fed Chair?

Grandfather Clock Economics Over the years, I subscribed to the grandfather clock theory of economics. In effect, the economic and political environment swings from one extreme to the other over... Read More »

Looking Beyond COVID-19 —Inflation Outlook — the Short and the Long of It — Tax Rate Increases Higher Than Forecast

Learning from the Past—Double Digit Inflation—the Sixties and Seventies—Can It Repeat—Guns and Butter The debt financing of the Vietnam war and great society programs followed by the Fed adding fuel... Read More »

Looking Beyond COVID-19 — “What This Economy Needs is A Little Inflation”

Needs A Little Inflation My first firm on “the Street” employed the Chief Economist of The Conference Board, the late Al Sommers. During one recession, from behind a cloud of... Read More »

Looking Beyond COVID-19 — Biden Proposals — Vaccine Rollout Key to Snapback — Limited Multiple Expansion — Focus on Cyclical EPS Growth

Vaccine Rollout Key to First Half Growth—Potential New One-Dose Vaccine The speed of reaching broad-based vaccinations will likely determine how fast the economy snaps back. Post-vaccine activity will initially depend... Read More »

Looking Beyond COVID-19 – Green Light for Renewable Energy and Battery Driven Vehicles

Economics of Renewable Energy Generation More Than Regulations Speed the Shift After quickly reinstating stricter environmental regulations, the Biden administration will likely propose to bring renewable electric generation up to... Read More »

Looking Beyond COVID-19 – Green Light for Renewable Energy and Battery Driven Vehicles

Economics of Renewable Energy Generation More Than Regulations Speed the Shift After quickly reinstating stricter environmental regulations, the Biden administration will likely propose to bring renewable electric generation up to... Read More »

Looking Beyond COVID-19 — the Years Ahead — Disruption and Opportunity

Virus Third Wave Unlike more regional virus waves during the spring and summer, the present third wave impacts the country as a whole. Past experience shows the U.S. seems to... Read More »

Looking Beyond COVID—19—Observations—Post-Election Morning

Observations—Post-Election Morning With some trepidation, we issue this Commentary Wednesday morning post-election day. With obvious risk, current trends this morning suggest former Vice-President Biden ahead but the outcome remains uncertain.... Read More »

Looking Beyond COVID-19 — the Political Class Fails the Fed — Now Even More Dependent on Recovery of Early Cyclical Industries

Fed’s Diminishing Tools — the Washington Political Class Provides No New Assistance Over the last decade, despite using a broad mix of monetary tools, the Fed failed to reach its... Read More »

Looking Beyond COVID-19 — a Potential Vaccine Broadens Investment Opportunities – Increased Merger and Acquisition Activity

Controlling Virus Spread Key to Second Half GDP Results Since new virus cases peaked nationally early in July, the number of new cases continues to decline (see Figure 1). July’s... Read More »

Q2 2020: Turbulent Markets and the New Normal

The “New Century” — Acceleration of the Digital Economy We label the post COVID-19 period the “New Century” to reflect acceleration of the digital economy as both businesses and consumers... Read More »

Looking Beyond COVID-19 — the “New Century” — The Past is Just That — the Past — Living Without a Vaccine — the Changes

The “New Century” — the Past Will Remain the Past  The post-COVID-19 period could be labeled the “New Century” as much of the past will remain just that — in the past. In the meantime, without broadly available vaccines for some unknown period, Americans... Read More »

Looking Beyond COVID-19 — Government-Mandated Recession — Bigger Government — Bigger Companies — Big Political Change? — Opening the Economy?

Federal and State Mandated Recession COVID-19 led to a government — Federal and state-mandated recession to mitigate the virus. This commentary reviews how the government-mandated recession will likely increase government... Read More »

2020 1st Quarter Review

We hope you are well during this period of great uncertainty and stress. In such a short period over the past year, investors confronted extreme market conditions that typically evolve... Read More »

Perspective — Moving Beyond COVID-19 — a Second Look

Reducing Consumer and Investor Caution — First Steps Virus Mediation Our last commentary, Perspective-Moving Beyond COVID-19 (3/25/20), focused on consumers’ “psyche” as one key to the ultimate speed of an... Read More »

Perspective – Moving Beyond COVID-19

Perspective — Economy and Equity Market By this time, 2019 Novel Coronavirus (COVID-19) 24/7 broadcasts, plus the internet, should enable investors to be on top of the pandemic’s macro and... Read More »

Coronavirus Market Update March 16, 2020

Three Key Points to Consider We face historic healthcare and economic challenges that demand our overwhelming collective efforts to conquer this threat and set the foundation for economic recovery. Global... Read More »

Oil Price War — Many Shale Producers on Life Support— Result Oil Prices Recover — Consumers Benefit

Oil Price War — Price Support Vanishes On top of reduced energy demand resulting from the coronavirus epidemic, further upset arose this weekend when an oil price war began between... Read More »

Mid- March — First Direct Impact on U.S. Economy from China’s Shutdown and Coronavirus — Inflationary or Deflationary?

Normal—Lunar Holiday Shutdown for China Each year Chinese production typically shuts down for the Lunar New Year. This year that holiday lasted about fifteen days — January 25th to February... Read More »

Coronavirus — The Known Knowns

Many observers, including ourselves, commented that the economic outcome for the 2019 Novel Coronavirus (COVID-19) falls under the predictive category of “known unknowns.” At the same time, keep in mind... Read More »

China – Still a Long March to Developed Country Status

China Partially Shuts Down According to The New York Times, at least 760 million Chinese currently face limits to their travel – or more than twice the population of the... Read More »

First Quarter Modest Coronavirus Impact — Later In the Year Could Reduce U.S. Capital Spending

First Quarter GDP — 737 Production Shutdown and Coronavirus Boeing’s cutoff of 737 max production and the 2019 Novel Coronavirus epidemic in China will likely modestly effect U.S. first quarter... Read More »

The Coronavirus — Economic Impact — Investment Opportunity

Global Economic Growth Disrupted At year-end, equity investors based some of their optimism for 2020 on expectations for improved global growth. The International Monetary Fund’s (IMF) World Economic Outlook projected... Read More »

2020 — the Four Questions

2019 Positive Equity Markets – Negative Corporate Earnings The S&P 500 has risen over 26% so far in 2019. Despite that strong performance, each quarter this year will likely show... Read More »

Potential Phase I Trade Agreement — Will this Prove to Be Phase Last?

Slowing Economy and Dangers from Food Inflation Move China In the past, we wrote that both the U.S. and China needed to come to some limited trade agreement for their... Read More »

Can Consumers and the Fed Keep the Economy Growing?

Third-Quarter GDP Report Better Than Expected – Thank the Consumer Real gross-domestic-product (GDP) increased at an annualized rate of 1.9% for the third-quarter —modestly above expectations. This result compares to... Read More »

Impeachment Hearings and Trade –the Outlook for a Trade Agreement and the Presidential Election

Will Impeachment Hearings Change China’s Approach to Negotiations? Our past commentaries looked for the President to come to some level of trade agreement with China well before the U.S. presidential... Read More »

Survey Data and Hard Data – the Week Offered Both—Different Economic Readings

Busy Report Week — First Surveys and Then Hard Data The first week of October started with sobering economic news in the form of surveys from the Institute for Supply... Read More »

Potential Trump vs Clinton Impeachment — the Differences—Economic and Financial Market Implications

For investors, impeachment efforts could prove more problematic than the impeachment of President Clinton. This commentary very briefly outlines the reasons for the difference and the implications for tax policies... Read More »

German Weimar Hyperinflation Anxiety Delays Needed Fiscal Spending

The European Central Bank Tries More of the Same Monetary Tools Last Thursday (9/12/19), the European Central Bank (ECB) cut its deposit rate to minus 0.5 percent, instituted a tiered... Read More »

Pigs Help Trade Negotiations Fly Again

Goodwill Trade Gestures The U.S. and China made recent goodwill gestures in efforts to improve the tone of trade negotiations. First, President Trump delayed the increase of tariffs from 25... Read More »

All Hail the Consumer- Potentially More Ammo for Consumer Spending

Latest Reading of 2nd Quarter GDP Shows Stronger “Details” The latest government estimate for 2nd quarter gross-domestic-product (GDP) growth of 2.0% came in slightly lower than July’s preliminary estimate of... Read More »

Trade Whiplash – Market Whiplash

Whiplash 1—Additional Tariff Increases from China and the U.S. On Friday, August 23rd, China’s Ministry of Finance announced it would increase tariffs on $75 billion of U.S. exports to that... Read More »

Inverted Yield Curve – Economic Outlook Still Trade War Dependent

U.S. 10-Year/2-Year Brief Inversion This morning (August 14), the U.S. 10-Year/2-Year yield spread briefly inverted. Inversion means that the 2-Year Treasury Bill paid a higher interest rate than did the... Read More »

Tariff Hike – A White House Shot at the Fed? – The end of Zero Bound in the US? – Consumers Now more than Ever Key to Economic Growth

Fed Lowers Funds Rate July 31, the Federal Open Market Committee (FOMC) lowered the target range for the Federal Funds (Fed Funds) rate by 25 basis points (bps) to a... Read More »

Second Quarter Real GDP Growth Better Than the Headline Number – Adds to the Rate Cut Debate

GDP Second Quarter Growth Shows Underlying Economic Strength The U.S. economy, measured by gross-domestic-product GDP, showed real growth of 2.1% in the second quarter compared to 3.1% in the preceding... Read More »

Fed Focus – Boosting the Rate of Inflation – Trade War May Help

Boosting the Rate of Inflation—An FOMC Policy Goal The Federal Open Market Committee (FOMC) meets on July 30-31. An important policy consideration will be boosting price inflation in an attempt... Read More »

Dovish Fed – Second Quarter Earnings Expectations – Second Half Outlook

Dovish Fed – Not Earnings Growth – Key to Recent Stock Market Performance The dovish stance of the Fed provided a strong boost to stock and fixed income markets in... Read More »

Consumers Carrying the Economy and the Fed Funds Rate Outlook

Consumers Carrying the Economy Consumers represent 70% of gross-domestic-product (GDP) spending. Despite signs of slowing business activity, consumer incomes and spending continue to show strength (see Figures 1 and 2).... Read More »

The Fed — The End of Patience — The Dove Arrives — Inflation and Trade

The Fed Eliminates Patience from Its Vocabulary The Federal Open Markets Committee (FOMC) yesterday removed the word “patience” from its vocabulary and the text of its statement after its June... Read More »

Trade War – Neither China nor the U.S. Benefit

The U.S. Economy Shows Mixed Signs The recent mix of economic results suggests that neither China nor the U.S. economies will likely emerge unscarred from the trade war. The New... Read More »

China-the Great Digital Wall -Balkanization of the Internet -Supply Chain ABC's

Napoleon’s Warning — China the Sleeping Giant The trade war with China could not fail to bring to mind Napoleon’s often cited quote on China which seems to be coming... Read More »

US Potential Economic Output - MMT vs. TNSTFL

U.S. Long-Term Potential Growth — At What Rate? With both the ebbing tax stimulus and the lagging effects of last year’s less accommodative monetary policy, the economy’s potential output will... Read More »

Trade Negotiation Turmoil – Opportunity?

The Trump Tweet — Two Purposes First Purpose Last Sunday President Trump threatened new tariffs on Chinese imported goods reflecting concerns over backtracking by China in their trade negotiations. A... Read More »

First Quarter GDP – Markets Smarter Than Economists

First Quarter Real GDP Increased More Than Expected The advance estimate of first-quarter gross domestic product (GDP) showed real gross domestic product increased at an annual rate of 3.2%. This... Read More »

The Rebound – Now What?

Improving First Quarter GDP Outlook The 2019 first quarter started out with dark clouds and ended with some sun breaking through the clouds. In early March, the Atlanta Fed’s GDP... Read More »

Inflation — Fed Policy — Wage Inflation — Margin Squeeze

More Possible Changes from the Fed—Average Inflation Targeting In addition to the Fed’s pivot to more dovish policies, the Fed will also re-examine its framework for setting its inflation rate... Read More »

What Now — the Outlook

First Quarter Economic Outlook—Reflects the Fallout from the Last Quarter The first-quarter’s economic performance will reflect many of the forces created at the end of 2018. These forces include the... Read More »

Fourth-Quarter Observations – First-Quarter Outlook – Debt Limit Renewal March First

Fourth-Quarter Real GDP Report — Slightly Better Than Expectations The fourth-quarter initial estimate of real gross-domestic-product (GDP) increased by 2.6% compared to the prior quarter (see Figure 1) — slightly... Read More »

Politics and Taxes – Interesting Charts and Graphs

The Presidential Election Campaign Opened This year’s State of the Union speech opened what will likely prove to be an overly long 2020 presidential campaign. Investors will need to focus... Read More »

Populism with Chinese Characteristics and its Influence on Trade Issues and Negotiations

The Political Decisions of Just Two Men Will Play a Key Role in the Economic and Investment Outlook The American and Chinese negotiators met in Washington this week. This commentary... Read More »

Left vs. Right Populists – Result: Greater Washington Dysfunction – Outcome: Reduced Consumer Confidence, Adding to Economic Concerns

Populism Helped Create Conditions for the Partial Government Shutdown, Adding to Economic Concerns In 2016, we saw the populist vote on the right help to elect a Republican president. Two... Read More »

2019 Outlook

2018 – Looking back briefly The U.S. economy maintained solid growth throughout 2018, reflected in high levels of consumer optimism. Simultaneously, trade tensions with China and tightening monetary policies contributed... Read More »

Fed Data Dependent Policy — Data May Not Be Dependable — Puts FOMC and Investors on the Same Plane Creating Potentially More Volatility — Current Markets Create Investment Opportunities

Simultaneously Increasing Fed Fund Rates While Quantitative Tightening — No History and Greater Complexity The recent December FOMC meeting also reminded investors of the complexity that results when the FOMC... Read More »

Trade War – Continued Economic and Financial Market Volatility Creates Pressure to Settle – or If Not, Will Trump Run Again?

Using Tariffs to Resolve More Than Trade Issues Our 10/17/2018 commentary, Will the Trade War between the U.S. and China Grow into Cold War II, outlined aggressive trade and military... Read More »

Will the Mid-Term Election Results Cause Trump to Change His Trade Policies? Watch the G20 Meeting in Buenos Aires for Signs of a Positive Change

Sino-American Trade War — Will the G20 Bi-Lateral Meeting Change Its Course? Pressures on the global economy and financial markets continue to intensify from the Sino-American trade war. In a... Read More »

The Fed Put May Be Kaput

The So-Called Fed Put Since The Great Recession, investors looked to support from the Federal Open Market Committee (F.O.M.C.) during periods of stock market weakness. They particularly looked to the... Read More »

Key Outcome of Mid-Term Elections — Behind Us

It is Over! For investors, the most important outcome of the mid-term elections — they are over. Why? According to a recent academic study, since 1815 – yes 1815 –... Read More »

3rd Quarter GDP Observations

Third Quarter Real GDP Report—Slightly Better Than Expectations Third quarter real GDP (advance estimate) increased 3.5% compared to the prior quarter — slightly better than expectations. Compared to the third... Read More »

Will the Trade War Between the U.S. and China Grow Into Cold War II? What That Might Mean For Investors?

This commentary will briefly outline aggressive trade and military actions taken by the United States that will likely make resolving trade issues with China more difficult. The headline from an... Read More »

Technology Capital Expenditures in the Updates – Economic Momentum – How Long? – Mid-Term Elections – Can It Moderate the Trade Wars – Emerging Markets – Can the Calm Continue?

The Fed Funds Rate – Where to? The F.O.M.C. increased the Fed funds rate this week from 1.75-2.0% to 2.0-2.25%. In announcing this change, the F.O.M.C. statement removed the following... Read More »

Possible Trump Impeachment Produces Different Impact than the Clinton Impeachment – Why the Difference? Why Important?

Trump vs Clinton Impeachment Whether Democrats gain control of the House in the mid-term elections will likely determine whether impeachment efforts move forward against the President. For investors, these efforts... Read More »

It’s the Politics, Stupid! Trade Negotiations

It’s the Economy, Stupid To keep Clinton’s 1992 presidential campaign on message, Clinton’s lead strategist, coined the phrase “the economy, stupid”. Many later expanded that phrase to the more familiar... Read More »

Populists Meet The Cocoon Class - Possible Economic And Investment Implications

Populism The word populism rings loud in many countries today. The overall subject obviously lends itself to a lengthy Ph.D. thesis not this relatively brief commentary. Therefore, this commentary will... Read More »

Trade War–the Macro–the Micro– and More than Tariffs – or How German Auto Tariffs Might Be Used As a National Security Negotiating Position

Trade War – the Tariffs It took some time for investors to finally shake off their complacency and show their discomfort with the reality of higher tariffs. The mid-June headlines... Read More »

Overusing Debt is Like Overusing Antibiotics - it Reduces Its Effectiveness

Most observers expect economic growth to benefit from the new fiscal stimulus programs through at least the next 18 months. With that in mind, this commentary provides some aspects of... Read More »

Markets and Midterm Elections - A Recent Study Gives Some Answers

Besides dealing with the title of this commentary, we also will look at several issues that concern investors. Economic and Business Outlook We move into the remainder of the year... Read More »

Is the Fed Put Kaput?

The Fed Put and A ccommodative Monetary Policy Tools For a number of years, equity investors assumed that the Fed would pull back short-term interest rates whenever equity markets substantially... Read More »

The Markets - Pick Your Poison Tariffs or Tech

First Poison—Tariffs as a Tool The headlines and much commentary on higher tariffs threatened against China, in our view, glosses over the importance of the underlying issue. In reality, the... Read More »

China Trade and Potential Market Reactions to Congressional Testimony March 21 And 22nd – What is Section 301?

Background — China Trade U.S. imports of Chinese goods totaled about $500-600 billion last year or less than 20% of total Chinese exports. After subtracting out U.S. exports to china,... Read More »

Quick Comment On this Morning's Jobs Report

The Jobs Report — Wow! The government reported a blowout jobs report this morning, which the financial markets should find supportive. The U.S. economy added about 313,000 jobs—nearly 100,000 more... Read More »

Higher Tariffs and Higher Budget Deficits Do Not Mix

Is Canada a National Security Risk? Investors reacted negatively to next week’s likely announcement of tariffs on steel and aluminum. The higher tariffs would be applied invoking authority rarely used--national... Read More »

SkyView Investment Advisors: Market Decline — Congressional Budget Buster—Guns And Butter—Great Political Mix — Not so Hot An Investment Mix

Congressional Guns and Butter Today’s market decline, in our view, reflects concerns over the discretionary spending cap increases of nearly $300 billion written into the two-year bi-partisan budget agreement. The... Read More »

SkyView Investment Advisors: Inflation Marker Wednesday

Inflation Expectations The majority of investors cite the surprising increase in average hourly earnings as the tipping point in their concern about higher inflation with the resulting higher long-term interest... Read More »

SkyView Investment Advisors: Today's Market – a Few Comments

Reaction to Market Meltup – Higher Interest Rates The sharp drop in the market today reflects, in our view, the normal market reaction likely after what some labelled a market... Read More »

SkyView Investment Advisors: Inflation — Underlying Inflation Gauge — Upside Risk Signaled

Upside Inflation Risk Signaled Yesterday’s (1/31/18) Federal Open Market Committee (F.O.M.C.) statement expressed a more confident expectation that inflation would reach its 2% target this year. Perhaps the F.O.M.C.’s more... Read More »

SkyView Investment Advisors: Now is Not the Time to be Complacent – 3 Challenges to Navigate Rising Interest Rates

Over the past three decades, the declining interest rate environment rewarded bond investors. That environment no longer exists. Today, investors face significant challenges navigating through the rising rate environment. Challenge... Read More »

SkyView Investment Advisors: Fourth Quarter GDP Stronger Than Headline Number

Reduced Inventories and Negative Net Exports Pulled Down Fourth Quarter G.D.P. Growth Compared to Consensus The government’s fourth quarter advance estimate of real gross domestic product (G.D.P.) increased at an... Read More »

Déjà Vu Again – Hard Commodities Follow Technology Expansion

Technology Capital Expenditures in the Chips A recent article in the Wall Street Journal showed that the tech giant Samsung spent more on capital expenditures than did the two oil... Read More »

Life after Tax Reform— Olympic Level Tax Gaming — the Second Half – A Changing Dynamic for the Economy and Markets

Tax Reform—“Good or Not So Good?” Real life experience for individuals and corporations will determine the eventual answer to that question, not talking heads. A real life event will come... Read More »

2018 Commentary --- Part 4 of 4 – Investment Summary and Conclusions

The Economy Shows Little Excesses--Economic Growth Should Continue in 2018 Little economic excesses exist that would suggest a slowdown in 2018. This comfortable economic backdrop helps to underlay the current... Read More »

2018 Commentary --- Part 3 of 4 – The Fed - Change and Change

Fed Funds Rate Where To? Over the last 12 months, the Fed made two important policy reversals. Last December, it raised the Fed funds rate for the first time in... Read More »

2018 Commentary --- Part 2 of 4 – Tax Reform – Reform Not Simply Tax Cuts

Tax Reform—Will It Pass? The chances tax reform clears Congress remains somewhat uncertain as of this writing. The odds increased significantly yesterday when it cleared the Senate budget committee. The... Read More »

2018 Commentary --- Part 1 of 4 – It Was A Very Good Year – And Now?

We divided our 2018 outlook into four self-standing commentaries. This first commentary focuses on the overall economy. The second examines the impact of tax reform on 2018 and longer-term. Then... Read More »

SkyView Investment Advisors: 2018 Commentary --- In Four Parts Part 4

The Economy Shows Little Excesses—Economic Growth Should Continue in 2018 Little economic excesses exist that would suggest a slowdown in 2018. This comfortable economic backdrop helps to underlay the current... Read More »

SkyView Investment Advisors: 2018 Commentary --- In Four Parts Part 3

Fed Funds Rate Where To? Over the last 12 months, the Fed made two important policy reversals. Last December, it raised the Fed funds rate for the first time in... Read More »

SkyView Investment Advisors: 2018 Commentary --- In Four Parts Part 2

Tax Reform—Will It Pass? The chances tax reform clears Congress remains somewhat uncertain as of this writing. The odds increased significantly yesterday when it cleared the Senate budget committee. The... Read More »

SkyView Investment Advisors: 2018 Commentary --- In Four Parts Part 1

We divided our 2018 outlook into four self-standing commentaries. This first commentary focuses on the overall economy. The second examines the impact of tax reform on 2018 and longer-term. Then... Read More »

Investor Optimism – Despite "The Merry Minuet" Environment

The optimism of consumers, business owners, and investors continues at high levels despite hurricanes in Florida, Texas, and Puerto Rico, fires in California, and possible nuclear confrontation in Korea. In... Read More »

The Fed’s Ex-Lax Rate Strategy

More Hawkish Fed—Surprises Some Our past commentaries suggested that the Federal Open Market Committee (FOMC) would move with greater regularity in raising the federal funds rate. If correct, we expected... Read More »

Highlights of the Tax Reform Framework with Brief Comments

The following briefly outlines the proposed tax reforms. To do it quickly, I pasted the outline from the Congressional web page and added my comments with my emphasis in bold... Read More »

The Fed on Q.T.

The Federal Open Market Committee (F.O.M.C.) meets this week (Sept. 19 – 20) and will likely signal it will begin to shrink the size of the Fed’s balance sheet.  It... Read More »

Kicking the Tax Legislation Can up the Congressional Road - the President's Surprise Deal - back to the Trump Bump?

Clearing the Path for Congressional Consideration of Tax Legislation President Trump’s unexpected deal with Democratic leaders postpones the debate over spending and raising the debt limit until December. It extends... Read More »

Retail First Sign of the Holiday Season Activity A Positive Indicator

Container Port Volumes Give a Positive Sign for the Holiday Shopping Season The first signs as to how this year’s important holiday shoppingseason may go comes from the strength of... Read More »

Sears And Amazon Clash of Titans

Sears and Amazon – Bricks and Mortar Came Later In 1894, Richard Sears issued Sears’ first catalog—later known as “The Big Book”-- and started its mail order business. One hundred... Read More »

The “What Me Worry” Financial Markets – Nuked?

Measuring the “What Me Worry” Markets Many baby boomers will recall mad magazine and its iconic cover boy—Alfred E. Neumann. His philosophy of life, “what me worry,” seems to apply... Read More »

Washington Reality Impacts Investment Focus

Political Warfare and U.S. Economic Growth For many developing countries, investors will haircut their market capitalizations to reflect their political instability. While the U.S. market will not likely see such... Read More »

The Implications for Tax Reform from the Death of Obamacare Reform

Republicans Give Little Confidence for Enacting Major Legislation The failure of the senate to pass legislation to reform Obamacare may lead to important implications for future success of tax reform... Read More »

Second Quarter GDP Outlook — Declining Expectations

The bureau of economic analysis will release the advance estimate of second quarter GDP on July 28. What do the expectations for the quarter currently show? The next two graphs... Read More »

Investment Views of Two Veteran Market and Economic Observers

Recently I attended a lunch with several of my colleagues that formerly worked in the Merrill Lynch global research department that I headed. Below, I briefly outline my notes from... Read More »

Bloomberg Magazine Interview with Andy Melnick, Larry Chiarello and Steven Turi

As the Fed tapers its asset purchases, correlations among shares may ratchet down from historic highs and provide opportunities for active managers. Read More »

The Fed – Strong Employment Driving The Move – Inflation Not Their Worry – What Is Their Real Worry?

The Fed – What Next? Most observers expect the Federal Open Market Committee (FOMC) to raise the Fed Funds rate another 25 bps at its June 13-14th meeting. The real... Read More »

The Humble Beginning Part-1

The Father of Modern Portfolio Theory and the Insight of Behavioral Finance. A Special Interview with Dr. Harry Markowitz, Nobel Laureate in Economics Part 1: The Humble Beginning. Read More »

The Revolution of Behavioral Finance Part-2

The Father of Modern Portfolio Theory and the Insight of Behavioral Finance. A Special Interview with Dr. Harry Markowitz, Nobel Laureate in Economics  Part 2: The Revolution of Behavioral Finance Read More »

Congress And The Trump Bump

Positive economic expectations for proposed tax and infrastructure legislation took a decided reversal last week. The reversal resulted from various issues that would likely undermine the administration’s ability to push... Read More »

Economic Tone Better Than The First Quarter GDP Headline Number Suggests

The “Advance” estimate for first-quarter Gross Domestic Product (“GDP”) showed an annual growth rate of 0.7%.  More importantly, real final sales—very simply, what passes over the sales counter—grew 1.6%.  In... Read More »

First Quarter GDP Expectations - Will It Be The Usual?

As of this date, estimates for first quarter gdp growth range from o.5% by the atlanta fed to 2.1% for the new york fed.   Economists I follow project first quarter... Read More »

Hope Is Not A Strategy – But There Is Hope

Can They Ever Compromise? Before leaving for Key West about a fortnight ago, house republican leaders were scrambling to pull in the necessary votes to reform ObamaCare. That effort failed.... Read More »

The Change

The first quarter ended with investors returning to reality. since the election much enthusiasm existed that the administration and congress could deliver major new legislation dealing with healthcare, tax reform... Read More »

The End Of One Stop Shopping – The Handover

Since the end of the great recession, investors focused importantly on one key driver to the economy and financial markets—monetary policy. Commentary before and after each quarterly meeting of the... Read More »

Economy and Markets - Outlook for 2017

The Economy and Markets – Where We Are These comments cover varied topics including proposed personal tax reform; the economic impact of fiscal policy proposals; and starts with the economic... Read More »

The Times They Are A Changing

It would be difficult to describe 2016 as anything but unpredictable. For all of the year’s ups and downs, investors head into 2017 with more optimism than we’ve seen in... Read More »

The Dismal Employment Report

The Job Report Economists projected that September would show a gain of about 200,000 payroll jobs. Instead, the Bureau of Labor Statistics (B.L.S.) released an employment report showing a (pick... Read More »

China And The Global Market Meltdown

The Morning After – The Market Hangover These comments are being written the morning after the Dow Jones index declined over 500 points or a loss of 3.1% for the... Read More »

Trump, Fiscal Policy, And the Yield Curve

Trump Fiscal Policy President Trump, working with a Republican House and Senate, should see fairly rapid progress for two major areas of his platform—tax reform and infrastructure spending. Tax reform... Read More »

What About Long-Term Interest Rates?

The President’s Council of Economic Advisers (C.E.A.) recently published a study, “Long-Term Interest Rates: A Survey,” which examined the extended decline in long-term U.S. interest rates. We thought it of... Read More »

Harry Markowitz's Dissertation - SkyView Investment Advisors

Harry Markowitz & Mean Variance - SkyView Investment Advisors

Harry Markowitz - Not a Tux, Tails - SkyView Investment Advisors

Harry Markowitz's Philosophy - SkyView Investment Advisors

Harry Markowitz's Three Schools of Thought - SkyView Investment Advisors

Harry Markowitz's Life - SkyView Investment Advisors