Mamas, Don’t Let Your Babies Grow Up to Play the Lottery

In 1964, New Hampshire introduced the first modern state lottery. Today, 44 states, the District of Columbia and two territories all run sweepstakes (lottery) games. State governments now rake in about $70 billion a year from lotteries with profit margins of about 33%. …Read More

The Bond Box – 3rd Quarter 2017

Taxable Fixed Income Markets

The third quarter of 2017 featured weak data, which brought into question the intentions of a seemingly dovish Federal Reserve. The Fed, while acknowledging some of this weakness, continues to see a strengthening economy …Read More

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