The Federal Reserve is considering another rate hike, perhaps as early as this month, but the Treasury market’s estimate of future inflation signals skepticism from the vantage of government bond traders. The implied forecast, based on the yield spread between nominal and inflation-indexed Treasury yields, is inching lower again. The recent decline suggests that the odds for squeezing monetary policy at the central bank’s June 14-15 FOMC meeting may be lower than hawkish Fed comments of late imply.
Continue reading
Initial Guidance | 2 June 2016
Major Asset Classes | May 2016 | Performance Review
The recent rebound in global markets stumbled in May. Other than gains in US REITs, US equities, and US high-yield bonds, the rest of the field for the major asset classes suffered losses last month.
Continue reading
Initial Guidance | 1 June 2016
Emerging-Market Stocks Post First Weekly Gain Since Early April
Emerging-market equities rebounded last week, posting the first weekly gain since early April. The 2.8% total return for the Vanguard Emerging Market ETF (VWO) for the five trading days through May 27 also marked the strongest performance for the major asset classes last week, based on a set of proxy ETFs.
Continue reading
Initial Guidance | 31 May 2016
A Day To Honor The Fallen Soliders
“It is foolish and wrong to mourn the men who died. Rather we should thank God that such men lived.”
–General George Patton
Book Bits | 28 May 2016
● What They Do With Your Money:
How the Financial System Fails Us and How to Fix It
By Stephen Davis, et al.
Summary via publisher (Yale University Press)
Each year we pay billions in fees to those who run our financial system. The money comes from our bank accounts, our pensions, our borrowing, and often we aren’t told that the money has been taken. These billions may be justified if the finance industry does a good job, but as this book shows, it too often fails us. Financial institutions regularly place their business interests first, charging for advice that does nothing to improve performance, employing short-term buying strategies that are corrosive to building long-term value, and sometimes even concealing both their practices and their investment strategies from investors.
Continue reading
Are Correlations Between Asset Classes Rising?
William Bernstein penned an intriguing e-book a few years ago that considered the possibility that correlations are destined to rise among asset classes due to indexing’s growing popularity. “The average investor can build and manage multi-asset class portfolios to a degree that was once the exclusive province of institutions,” the financial planner wrote in Skating Where the Puck Was: The Correlation Game in a Flat World 
Continue reading
Initial Guidance | 27 May 2016
● US durable-goods orders jump in Apr due to planes | MarketWatch
● Orders for US Capital Goods Unexpectedly Fall for 3rd Month | Bloomberg
● Pending home sales +5.1% in April, reach highest level in a decade | CNBC
● US jobless claims fall more than expected last week | Reuters
● US Consumer Comfort Index Drops on Weaker Views of Personal Finances | BBG
● Regional mfg activity down in May, according to Kansas City Fed | Wichita Eagle
● How Would a Donald Trump Presidency Affect Your 401(k)? | NY Times
● North Korea Linked to Digital Attacks on Global Banks | NY Times