Second Quarter 2017

It’s hard to believe that one year ago stock markets were digesting the U.K.’s Brexit vote and had just dropped 5%. That was the last time the markets experienced a downdraft to that extent. The second quarter continued the pattern of low stock market volatility and …Read More

Virtually No Volatility

For yet another quarter, stock markets exhibited a lack of volatility. In fact, as the chart below shows, implied volatility of the S&P 500® Index has been below its long-term average for the past five years, going on a sixth in 2017.

Partisan Conflict is Good for Stocks

If the stock market could speak to our politicians, it would probably tell them to keep agreeing to disagree! There is an old Wall Street adage that “gridlock in D.C. is good” for stocks. In response, the Philadelphia Federal Reserve Bank has quantified partisan conflict, …Read More

The Boomerang Generation: Boomeranging to New Living Arrangements

The median life expectancy in the U.S. has increased dramatically over the past century, with average lifespans increasing over 60% from 49 at the turn of the previous century to almost 80 today. Correspondingly, the amount of time one’s children live at home is also …Read More

A (Sector) Picture Is Worth…

Standard & Poor’s has historically grouped its S&P 500® Index into ten sectors according to their Global Industry Classification Standard (GICS). Below, we look at changes in the sector weights within the S&P 500® Index over the past …Read More

Get Ready for QT

It has been eight years since the Federal Reserve started its quantitative easing (QE) program of purchasing bonds to drive interest rates down and inject money into the economy. Since then, we have had QE2, QE3, and a host of QEs by other central banks around the world. …Read More

The Bond Box: Notes from the Fixed Income Trading Desk

Taxable Fixed Income Markets

While the Federal Reserve was busy increasing short-term interest rates in both March and June, the bond market was equally busy lowering long-term interest rates. The result was a much flatter yield curve and a new …Read More

First Quarter 2017 — Lots of Noise, Not Much Action

Lack of market volatility, coupled with solid returns, marked a contrast with the first quarter of 2016, which was characterized by negative returns, and high volatility. The S&P 500® Index enjoyed a 109-day streak without a 1% decline—the longest stretch …Read More

Short-termism and Investing

From 1999 to 2009, the CGM Focus Fund managed by Ken Heebner produced a compounded return of 18% per annum. However, during that decade the fund’s average investor lost 11%, according to a recent study. How could that possibly happen? Most investors bought the fund …Read More