The bond market became unruly last week The bond market became unruly last week, with the 10-year Treasury yield ending higher at 5.16%. Since inflation expectations measures have stayed relatively stable, by process of elimination, recent moves have reflected real growth expectations and the term premium. Geopolitics & commodity prices have remained key sources of uncertainty. While there was hope around the UN meeting early last week, it seems clear the global political situation rem… View More
Will Something Break? Bond Yields, Inflation, & Market Risk Bond markets have weakened steadily in recent months despite widespread rate hikes and hawkish central-bank rhetoric. Firming global growth, accommodative monetary conditions, expanding budget deficits, a surge in AI-related corporate borrowing, and sticky inflation have all pushed yields higher and dashed hopes for lower rates. Meanwhile, political efforts to cap U.S. Treasury yields have backfired. Summary Stocks were mixed… View More
Bond Yield Increases Are Finally Impacting Equities Stocks pulled back last week as oil approached $100 per barrel, inflation remained elevated, and bond yields continued to rise. Investors are grappling with an escalation of war on two fronts: the military war between the U.S. and Iran, and the trade war between the U.S. and Canada. The still supportive global economic outlook implies the uptrend in earnings will persist, but the risks of a slowdown as 2027 develops are material. Get Bob's tak… View More
3Q Estimate Being Revised Higher Marginally Up until this point, the earnings discussion has largely focused on technology and AI capex, but one thing we noticed this past earnings season is that a “beat and raise” is not always enough to push a stock higher. Expectations are already quite high, and the bar continues to rise. Looking ahead to the third quarter, we are seeing estimates continue to be revised upward. Since the beginning of the third quarter, the consensus estimate has increas… View More
Federal Reserve Chairman Kevin Warsh used his Jackson Hole speech last week to lay out his views on monetary policy. Two things jumped off the pages of his speech. First, "Fedspeak" may be making a comeback. Former Fed Chairman Alan Greenspan became famous for phrases like "irrational exuberance." One section of Warsh's speech, titled "Preparing for Future Policy Conjunctures," felt like a throwback. "Conjunctures," really? Greenspan would be proud. Second, the narrative about Warsh is that he… View More