Equities Off to a Soft Start – Oil Story Continues to Unfold

158772193Auto sales were strong in December, dominated by truck and SUV sales, as manufacturing continued to be solid. Unemployment ticked further downward to 5.6% but as a byproduct of lower employment participation. After reaching record levels in December, stocks began the year with a somewhat rocky start. Expect no surprises from the Fed “for at least the next couple of meetings.” Continue reading

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ECB and QE – Doomed to Fail Before It Starts?

Euro Currency Bank NotesToday, the December inflation number for the eurozone area was reported as having fallen -0.2%, compared to November’s +0.3% rise. Yes, that’s right! Prices across the whole eurozone area are falling.

In reality, most of the fall has been driven by the extraordinary fall in the oil price, which is down over 50% from levels seen 6 months ago. The last time we saw falling prices in the eurozone was in 2009, just after the global financial crisis. Then prices fell for a 5 month period. Continue reading

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Russia: Where might we be wrong?

465942301As the last hours of the year slip through our hands, it is sometimes important to remind ourselves that today’s gallstones can become tomorrow’s pearls. This time last year, we expected the Federal Reserve to begin to raise rates, as we believed the U.S. economy would be producing enough strong data to justify a tighter monetary policy. The market had other ideas…

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As 2014 Winds Down, the ‘Santa Claus Rally’ Rolls On

100282406Final Q3 U.S. GDP growth was revised up 5.0% last week, at the fastest pace in 11 years (since Q3 2003). A revision up from 3.9% to 4.3% was expected. Through three quarters of the year – including the weather-impacted first quarters – growth has averaged 2.4%, so full-year growth is likely to be in the 2.5-3% range that we forecasted at the beginning of the year. Healthcare spending revisions continue to cause volatility. A cut was a large part of the sharp downward revision to Q1 GDP; an increase is a key part of this quarter’s upward revision. Continue reading

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Assessing the U.S. Economy in the New Era of Innovation

This is the final in a three-part series on Innovation Trends Retooling the U.S. Economy.

453612361In the first two parts of this series, we highlighted three trends that are driving changes in the U.S. economy, affecting employment, productivity and profitability dynamics:  the automation of knowledge work, advanced robotics and the energy revolution. These trends are just the tip of the iceberg. Over the coming decade, radical changes in healthcare, education, communication, transportation and alternative energy – to name just a few – will transform the economy and the investment landscape. We believe that new modes of research and analysis will be necessary in order to interpret the impact of these changes on both the macro and micro levels of the economy. Continue reading

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