Economic Outlook

Greece Again Triggers Olympic-Size Headaches

The latest quarter came to be defined by events in the dying days of June – Greece’s decision to shut banks and implement capital controls leading up to a voter referendum on aid and reform proposals. Along with Puerto Rico’s effective bankruptcy and China’s equity “bear” market (after an equally stunning more-than-doubling), Greece’s potential exit from the euro raised the risk of turmoil for the entire euro project, and for markets everywhere.

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Equity Portfolios

U.S. Monetary Stimulus Easing To Merely Strong

Impacted by events at the end of the quarter, through June the S&P 500 marked time, which, after nine quarters of gains, is not exactly chopped liver.

That said, the resiliency that investors display in the face of many and varied crises is nothing if not remarkable. The Ukraine/Russia armed conflict, Greece near default, Iran nuclear efforts, Middle East carnage, Scotland/Catalunia/put-yourfavorite-region-here threats to secede, U.S. political fighting over guns, immigration, gay marriage, defense and social programs – nothing has materially altered the market’s trajectory and below-average volatility.

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Fixed Income Portfolios

Fed Guidance On Rates Data-Dependent

The “Grexit” drama, trouble in Puerto Rico and Chinese stock market turmoil do not materially change our view on U.S. interest rates. The Fed remains data-dependent. U.S. interest rates will continue to be driven by domestic factors: U.S. growth, labor and housing costs, and other inflation, including commodity prices. These factors have not been materially altered by the above-mentioned events. Therefore, our perspective on fixed-income markets remains similar to that of recent writings.

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