Playing for a Bounce

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Over the summer, some groups within the global equity market sold off sharply, leading to the current trends of poor performance and weak breadth. Foreign stocks, cyclicals and value-oriented sectors were the hardest hit. From here, we expect better trends from these groups as they have become statistically washed out. We calculate the percent of […]

Wages Are Rising and The Phillips Curve is Not Dead

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The Phillips Curve (the relationship between wages and the unemployment rate) finally awoke from its slumber with today’s unemployment report showing private sector wages rising 2.9% year-over-year and non-supervisory wages rising 2.8% year-over-year, the fastest growth rate since 2009. Even more important than that, though, is that all indications continue to point to even faster […]

Thoughts on the Term Premium

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As many have documented, the main channel of transmission for the Fed’s quantitative easing policy was via the term premium component of US treasuries. As the Fed’s balance sheet doubled from 2010 to 2015, the term premium embedded in US treasuries fell from 2.5% to -75bps. The Fed is now shrinking its balance sheet, which […]

What We’re Reading

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Recently we were asked about the latest books and ideas contributing to our economic analysis. Here’s an incomplete list of what we’ve been reading this summer. Straight Talk on Trade: Ideas for a Sane World Economy  By Dani Rodrik A discussion of free trade and how nations can sensibly chart a path forward in today’s […]

A New Super Factor: the Investment Case for Knowledge

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We’re pleased to share a new white paper on the market anomaly that rose above value, size, quality, low volatility and momentum factors. Written by Bryce Coward, CFA, the study details the results of first market test of the Knowledge Effect, the tendency of highly innovative companies to deliver excess returns. Download the white paper here: A New Super Factor: The […]