Perspectives

The pricing in of political risk has clearly become much more complicated in the past month, as the U.S. Administration has switched from a focus on tax cuts & deregulation to tariffs (or tariff threats) & increased tech regulation/antitrust.  This may not end anytime soon.  The offset will have to be elsewhere, and the market looks willing to give other actors (like central banks) the benefit of the doubt, at least for now.  We continue to stay tuned. Last week, the equity markets m… View More

The Bond Market, a number of market analysts and President Trump were all ahead of the Federal Reserve once again, in calling for possible rate cuts in 2019, even though there were no signs of recession yet. For several months last year there were calls that the Federal Reserve was tightening too quickly by raising rates and reducing their balance sheet at the same time (policy that had never been done before). The bond market signaled that the Fed was more than a little aggressive in tightening… View More

On Thursday, President Trump announced plans to impose tariffs on all imports from Mexico in an effort to stop migrants crossing into the U.S.  The tariff, effective June 10th, would begin at 5% and escalate at 5% intervals to a maximum of 25% in October.  The U.S. has never previously used blanket tariffs against another country; the President’s authority to do so is unclear.  The markets’ response was extremely negative; with all of the major indices declining for the week.  The Russe… View More

The reverberations from last week’s breakdown in trade talks between the U.S. and China and the sanctions placed on Huawei continued to roil the markets.  In particular, investors focused on the impact on Technology companies as the Nasdaq, the worst performing index, fell 2.29%, followed by the Russell 2000® Index (-1.41%), S&P 500® Index (-1.17%) and the Dow Jones Industrial Average (-0.69%).   Apple, which relies heavily on China for manufacturing and sales, fell 5.31% this week as… View More

We want to share an article that we came across while following news on the U.S. trade dispute with China.  It is a little outside our normal discussion of markets and economics, but we think it gives important insight into what is going on between the U.S. and China, as well as other major world powers.  We have added some highlighting to bring attention to certain details in the article.   Some may be inclined to believe the issues with Huawei are politically motivated, and some of the ar… View More