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On Tuesday of this week we wrote about the four possible scenarios the Fed could adopt in their Wednesday policy decision. In order of most hawkish to most dovish, those scenarios were: Fed does not cut rates and signals that a rate cut may be appropriate later in the year (read the September meeting). Balance […]
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Tomorrow will obviously be one of the most important news days of the year for financial markets with the Fed expected at the very least to signal that a rate cutting cycle is in the offing. Indeed, since the Fed last raised rates the yield curve has inverted at the important 10Y-3M spread, inflation expectations […]
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As expectations for a Fed easing cycle have gained momentum, we’ve seen an abundance of comparisons between the current period and the late 1990s. In that period the Fed cut rates and stocks simultaneously levitated into the stratosphere. If we are to follow the logic that the rate cuts in 1998 caused the stock market […]
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In this mid-quarter update, entitled “Escalation,” we discuss the backdrop of escalating trade wars and our belief that the environment is more favorable for US Treasury bonds relative to stocks. The trade war is escalating at a time of weakening global growth, thereby weighing further on growth. The CNY/USD devaluation that began last year is […]
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Yesterday we wrote about three macro factors that will act to restrain economic growth through the rest of 2019 and into 2020. Those risks are the baked-in fiscal tightening, the lagged effects of monetary policy tightening, and growth retarding trade policy. Together, they could restrain growth to levels well below expectations and induce a profits […]
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As we look into the second half of the year and into 2020, we are left with a fleeting feeling about the prospects for a cyclical uptick in growth and therefore earnings. The problem is not so much with the current pace of growth or incoming data (which by the way hasn’t been very good). […]
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In 2003, Taiwanese generic drug leader TTY Biopharm and other Taiwanese venture capital firms funded a new type of drug company. PharmaEngine was launched with the specific mission of getting to market faster with drug treatments. To reduce the time between drug discovery, the first step in formulating a new drug, and approval, the last, […]
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For all the buzz, it would be easy to guess Tesla is the most innovative car maker in the world. But as our intangible-adjusted data reveals, Tesla invests less than half as much on R&D as the most innovative car company in the world. Invention in the world’s auto industry stands on the shoulders of […]
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Despite the S&P 500 having made a new all-time high just a few weeks ago, many of the supposed market leaders have not kept pace. Instead, almost all of the FAANNGs (Facebook, Apple, Amazon, Netflix, Nvidia, Google) peaked out either in the summer or fall months of 2018 and have meandered under those previous highs […]
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The announced tariffs have come at a rather inopportune time, economically speaking. Back in 2018 when the US was slapping tariffs on washer machines and solar panels (January ’18), steel and aluminum (March ’18) and Chinese goods broadly (July ’18) the economy looked to be strong and was getting an added boost from tax cuts […]
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