Highlights Chart 1Contagion?  Until last week, global growth weakness had been wholly confined to the manufacturing sector. But the drop to 52.6 in September’s Non-Manufacturing PMI (from 56.4 in August) raises the…

Highlights Chart 1Waiting For A Manufacturing Rebound  The 2015/16 roadmap is holding. As in that period, the ISM Manufacturing PMI has fallen into recessionary territory, but the Services PMI remains strong (Chart 1). As is…

Highlights Chart 1Keep Tracking The CRB / Gold Ratio  The Fed cut rates by 25 basis points last week, a move that Chairman Powell described as an “insurance” cut meant to counter the risks from trade tensions and…

Highlights Chart 1Looks Like 2016 & 1998  The Treasury market continues to price-in a recession-like outcome for the U.S. economy, embedding 83 basis points of Fed rate cuts over the next 12 months. But last week’s…

Highlights Chart 1Bond Rally Supports Stocks  Financial markets are pricing-in an intensifying global growth slowdown, but not all assets are responding equally. U.S. Treasuries have rallied strongly, while equities and credit…

Highlights Chart 1Is Low Inflation Transitory?  Persistent /pə’sıst(ə)nt/ adj. If inflation runs persistently above or below 2 percent, then the Fed would be forced to adjust its policy stance to nudge it back towards…

Highlights Chart 1What’s The Downside?  How low can it go? This is the question most investors are asking these days about the 10-year Treasury yield. Our answer is that it can’t go much lower unless the U.S. economy falls…

Highlights Duration: With rate hikes more likely than cuts over the next 12 months, it makes sense to maintain below-benchmark duration in U.S. bond portfolios. However, timing the next up-move in Treasury yields is difficult. We…

Highlights Chart 1Track The CRB/Gold Ratio  Earlier this year the Fed signaled a dovish policy shift in response to slowing global growth and tighter financial conditions. In large part due to the Fed’s move, financial…

Highlights Chart 1Look For Rate Hikes In H2 2019  First things first: The Fed’s rate hike cycle is not over. Last week’s FOMC statement told us that the Fed will be “patient” and Chairman Powell cited…