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Income Report Card | June 5, 2017

Posted on June 5, 2017

Our Observations: The 10-year Treasury ended the week at 2.21%, within the new lower range of 2.20% and 2.30%. The drop in global rates is helping push sovereign bonds higher and keeping them competitive in terms of performance. We think this is an important trend worth watching as the current rate of sovereign bonds doesn’t […]

Volatility | June 2, 2017

Posted on June 2, 2017

Our Observations: Brazil stocks and currencies are the biggest movers with a sharp increase in volatility. All other volatility changes were nominal with relatively low overall global volatility separate from Brazil. We believe volatility in Brazil is an isolated incident and shouldn’t spread to other countries. Market volatility is an indicator of financial stress. Low […]

Correlation | June 1, 2017

Posted on June 1, 2017

Our Observations: Brazil’s sharp decline is the top story for correlation. The change in correlation did not spread to other emerging markets or risk assets, supporting the idea that the problems in Brazil are not a systemic issue for Emerging Markets as a whole. The correlation figure measures how each asset return moves in relationship […]

Momentum | May 31, 2017

Posted on May 31, 2017

The big story in momentum is Brazil, as political turmoil and fears of military mobilization weigh heavily on stocks and currency. However, this does appear to be isolated, as the rest of the emerging markets and Europe continue to exhibit strong short- and long-term momentum, while bonds continue to show weakness, especially at the long […]

Income Report Card | May 30, 2017

Posted on May 30, 2017

The 10-year Treasury finished the week at 2.25%, inside what appears to be a new and lower trading range of 2.20% and 2.30%. The report card is again showing a decline in rating for U.S. corporate high yield bonds, and high yield municipal bonds are moving into their top spot. Given the low credit spreads […]

Correlation | May 24, 2017

Posted on May 24, 2017

Our Observations: Stocks, bonds and currencies are exhibiting correlations in the short term that are well below long-term correlations. This is an environment that should offer the opportunity for potential excess return. We think emerging market stocks and currencies may offer the opportunity to lower overall portfolio risk while potentially harvesting better returns. The correlation […]

Momentum | May 23, 2017

Posted on May 23, 2017

Our Observations: Despite the sell-off last Wednesday and the sell-off in Brazil, global markets are still embracing risk. Both short- and long-term indicators are strong across the emerging markets for both stocks and currencies. Additionally, short- and long-term indicators are still weak across global bonds, particularly on the long end. As a result, we continue […]

Income Report Card | May 22, 2017

Posted on May 22, 2017

Our Observations: Rates fell sharply last week with the 10-year Treasury closing at 2.23% close to the 2017 low. This has lowered the overall range between 2.40% and 2.20%. Despite the rally in Treasurys and other safe bonds, the report card doesn’t indicate any type of fundamental shift in expectations. We think it may be […]