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Have We Seen Peak Home Price Growth this Cycle? October 20, 2017

By Bryce Coward, CFA in Economy

The rise in home prices from the trough in 2009 has added $8tn to home values, pushing the value of homes to a level surpassing the 2006 peak (chart 1). In order to accomplish such dramatic growth, home price growth outpaced nominal household income growth…

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Quarterly Strategy Update: Dynamic Undercurrents October 19, 2017

By Knowledge Leaders Team in Economy, Knowledge Leaders, Markets

Since the start of this year, the US Treasury market is signaling a scenario of rising growth expectations and falling inflation expectations, as reflected by the various components that comprise interest rates. In this quarter’s strategy update, Portfolio Manager Steven Vannelli, CFA, explores the following:…

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Threats for Small Caps October 11, 2017

By Steven Vannelli, CFA in Economy, Markets

With some exceptions, smaller-cap stocks in the US tend to pay higher taxes than their larger-cap peers. As such, speculation that corporate tax rates may be cut has stoked the performance of US small caps recently. In addition to the concern that tax reform and/or…

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The Fundamental Case for Miners October 05, 2017

By Bryce Coward, CFA in Markets

Miners of all sorts have been put in the penalty box in recent years for massively over-investing from 2008-2013 on the thought that China’s infrastructure investment boom, and the commensurate demand for raw materials, would last forever. The over-investment and excess supply drove commodity prices…

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Shifting Currents in the US Treasury Market October 03, 2017

By Steven Vannelli, CFA in Markets, Portfolio Management

Employing basic bond math, we can decompose the US Treasury bond into two pieces: real rates and break-even inflation expectations. Because real rates (TIPS) and nominal rates (US Treasuries) are directly observable, break-even inflation is relatively easy to determine. Taking this logic one step further,…

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The Rally in Energy Isn’t a Fluke September 28, 2017

By Bryce Coward, CFA in Markets, Portfolio Management

Since the middle of August the S&P 500 energy sector is up 11.5% compared to just 3% for the index as a whole. Many observers have chalked this outperformance up as a reaction to a deep oversold condition or a short covering bounce, but a…

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The Impossible Math of the Federal Reserve September 21, 2017

By Steven Vannelli, CFA in Economy

Yesterday the Federal Reserve officially signaled the beginning of its balance sheet run-off. At this point, that’s old news. But, today the Fed released the Z.1 Flow of Funds, which adds to the intrigue of the balance sheet run-off. Why? Instead of getting wrapped up…

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