Publications

  • The four most powerful words in the universe of bonds are “full faith and credit.” These words apply to government Treasury bills, notes, and bonds whose timely interest and principal payments are backed by an unconditional guarantee from the United States Government. Since Treasury securities are backed by the full faith and credit of the government, they are referred to as “risk free” securities. The government cannot default on its obligations, as it has the power to levy taxes or print...
    Post date: 03/08/2019 - 6:19pm
    Category: White Papers
  • And good riddance to what turned out to be a very difficult year for the markets and investors. There was essentially nowhere to hide. Of the 15 major asset classes (everything from US large caps to emerging market stocks to high yield bonds to gold), US cash equivalents was the only one to finish the year with positive returns. Likewise, the 25 largest equity ETFs were all down for the year, with almost half of the funds down double digits. Only 3 of 48 country ETFs posted positive returns...
    Post date: 01/15/2019 - 4:11pm
    Category: Our Perspective
  • What a way to end a year. As the third quarter was ending, it seemed everyone was expecting yields to continue the slow ascent for the final three months of 2018. The Federal Reserve had just raised the overnight fed funds rate for the third time in September and a rate hike at their final meeting in December was all but a certainty. Bond investors were also thinking about and planning for further rate increases in 2019. That lasted for a few weeks into the fourth quarter, but as it turned out...
    Post date: 01/15/2019 - 3:53pm
    Category: Our Perspective
  • Finishing the third quarter, we can all look back and remember it has been ten years since the financial crisis and the beginning of the Great Recession. On September 15, 2008, Lehman Brothers, what was then the fourth largest investment bank, filed for bankruptcy. Much of that event was occurring over the previous weekend, but at shortly after midnight, the filing set in motion a dramatic sell-off in the stock market and credit markets that froze as investors learned quickly just how...
    Post date: 10/12/2018 - 4:02pm
    Category: Our Perspective
  • Despite some occasional faltering and vulnerability this quarter, major US stock indexes are still boasting decent gains for the year. But a quick look at the Federal Reserve, the bond market, and growth prospects across the globe tell us to at least take heed as we head into the last quarter of 2018 and look ahead to next year.   The Fed At the end of September, the Fed raised its benchmark federal funds rate for the third time this year to a range of 2-2.25%, and economists generally agree...
    Post date: 10/12/2018 - 3:56pm
    Category: Our Perspective
  • In case you were able to forget, the second quarter reminded us that we are no strangers to volatility in the markets. We’ve seen the main indexes whipsaw intraweek and even intraday over the last three months, with the S&P 500 Index ultimately finishing the second quarter up 3.43% and up 2.65% year to date, making up for the first quarter’s losses. Headlines surrounding geopolitical turmoil, political agendas, central bank policy, international trade disruptions, and corporate...
    Post date: 07/17/2018 - 1:48pm
    Category: Our Perspective
  • I’d like to introduce our newest addition to our fixed income team, John Trentacoste, who has written the Bond Market Overview this quarter. There is an old saying that the more things change, the more they stay the same. It actually is an old saying. The interpretation we most recognize dates back to a French translation by Jean-Baptiste Alphonse Karr (1808-1890) who was a French novelist with a reputation of having a bitter wit.1 In thinking about the second quarter, what probably sticks in...
    Post date: 07/17/2018 - 1:38pm
    Category: Our Perspective
  • PDF version here By now, everyone should be reacquainted with the term volatility. For the first month of the quarter, it seemed as though the trajectory of interest rates was up, up, up in almost a straight line. No sooner had I written my fourth quarter newsletter highlighting how the yield on the 10-year U.S. Treasury note had finished 2017 lower than where it began the year than I was surprised by an increase in the yield by 30 basis points by the end of January. It did not stop there. By...
    Post date: 04/13/2018 - 3:53pm
    Category: Our Perspective
  • PDF version here As we finally say goodbye to winter in Rochester, will we welcome back the bear after a long, long hibernation? This feels like a possibility, as the bull market run may have hit highs in January that we won’t be seeing again for a while. The extreme volatility we’ve seen in the past three months could be a symptom of an underlying shift in the market cycle from a bull to bear market, as opposed to just some normalizing and correcting. Just two months into the new year, the...
    Post date: 04/13/2018 - 3:36pm
    Category: Our Perspective
  • This year’s opening quarter saw gains across most indices, even globally. The S&P 500 Index finished the quarter up just over 6%, with large cap outperforming small and mid cap stocks (a reversal of what we saw for much of 2016), Technology, Consumer Discretionary, and Healthcare sectors outperforming their peers, and Energy significantly lagging. The US markets in general have responded positively to Trump’s policy plans, and it’s looking as though earnings had a surprisingly positive...
    Post date: 10/12/2017 - 10:12am
    Category: Our Perspective

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