As with last month, I delayed this update a few days to see if we might gain some clarity that would warrant some change in our allocation. Alas, no such clarity has emerged and so, as it has been since August, the risk budget remains unchanged this month. Indeed, as last month, the entire portfolio is unchanged. For the moderate [...]
Economic Reports Scorecard The economic data of the last fortnight was typical for this cycle with some reports showing improvement and others the opposite; "mixed" has been the most often used adjective of this expansion. Of course, some reports are more important than others and the bad news was concentrated in an area that has consistently supported the economic bull [...]
Economic Reports Scorecard The US economy continues to trend, as the Fed finally noticed in its most recent dot plot, at a low rate of growth. The Fed downgraded their long term growth outlook to 1.8% and that's just a rounding error from the 2% we've been tracking for quite a while now. The fluctuations around that number have basically [...]
I've put off this update as long as I can now, waiting for some clarity, a change in our indicators that might suggest a change to the portfolio. Alas, despite a Fed meeting, a BOJ meeting and a plethora of economic data nothing has moved sufficiently to warrant a change. The risk budget is unchanged this month as is the [...]
Economic Reports Scorecard The topic of the Fed's annual Jackson Hole retreat this year was "Designing resilient monetary policy frameworks for the future". That the gathered group of eminent economists had failed so spectacularly at designing a resilient monetary policy framework in the past did not deter the assembled learned group from pontificating about their presumed future accomplishments. Not that [...]
Economic Reports Scorecard If you want to understand the US economy based on one economic report, you could do a lot worse than the report on productivity released last week. This was the third quarter in a row that showed a decline in US productivity. That is, output was up (GDP was positive) but not as much as the amount [...]
The risk budget is unchanged this month although the composition of the portfolio does change. For the moderate risk investor, the allocation between bonds, risk assets and cash remains at 50/45/5. There are changes to the allocation but the overall risk budget stays the same. Credit spreads did continue to narrow this month but other indicators did not confirm the [...]
Economic Reports Scorecard Two reports over the last two weeks epitomize the bifurcated nature of the US economy. The durable goods report last week was just plain awful from top to bottom. Orders down 4% month to month and 6.4% year over year. Ex-transportation -0.5% month to month and -3.6% year over year. Core capital goods orders up slightly month [...]
Economic Reports Scorecard The economic data the last two weeks was deja vu all over again. The US economy has been growing at roughly 2% the last three years and I see no reason - yet - to expect that is going to change any time soon in either direction. Certainly there hasn't been anything in the data to support [...]
Economic Reports Scorecard The response to the much better than expected employment report today is quite interesting although not in a good way. Stocks will surely get most of the attention, assuming they continue to trade higher by the end of the day (they did), but other markets - bonds and gold - are not confirming the strength of the [...]
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