Have We Seen Peak Home Price Growth this Cycle?

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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 in each of the last six years. In chart 2 […]

Quarterly Strategy Update: Dynamic Undercurrents

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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: Monetary policy: We examine the demographic shifts causing people to spend […]

Threats for Small Caps

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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 tax cuts may get stalled, there are three other factors […]

The Impossible Math of the Federal Reserve

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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 in fancy terms like quantitative easing and large-scale asset purchases, […]

Looser Financial Conditions Should Support Economic Growth and Stocks in the Second Half

Proxy metrics for financial conditions from the US dollar, to interest rates to corporate bond spreads have been loosening since June and suggest continued moderate economic growth in the second half of 2017 and a firm equity market. In this post we’ll briefly highlight how these measures of financial conditions point to a firmer manufacturing […]