French Economic Uncertainty at All-Time Highs

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The rise in European government bond yields has been widespread since lows in early fall last year, led by Italy and (now) France. As investors turn to the relative safety of bunds, the spread between French and German yields (light blue line below) has risen to multi-year highs. In addition, the economic policy uncertainty index […]

Cause for Concern? Coincident-Lagging Economic Ratio is at a 41-Year Low

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The Conference Board’s Coincident-Lagging Ratio has done a pretty good job of identifying recessions since 1958. That is, until now. In each of the last eight recessions, the Coincident-Lagging Ratio bottomed near the end of the recession and was declining throughout the recession. It has been a pretty reliable indicator giving only three false signals, excluding […]

Quarterly Update: Knowledge Leaders Strategy

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In our new quarterly update report, Portfolio Manager Steven Vannelli, CFA, discusses the investment team’s recent analysis on two topics, including: 1. New portfolio opportunities. Huge innovation in the energy sector – and the US Shale Revolution specifically — has manifested into new portfolio opportunities. The US cost of production of oil has fallen by 50% over […]

Inflation is Finally Surprising to the Upside But it Looks Like it’s All About Oil Prices

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For the first time since 2011-2012, inflation surprises are positive in many parts of the world.  The Citi Inflation Surprise Index is at the highest level since 9/2011 in Asia-Pacific, it’s at the highest level since 10/2011 for the Eurozone, and it’s at the highest level since 5/2012 in the emerging markets. One notable exception is […]

VIX Flirting with Pre-GFC Lows, Uncertainty at All-Time Highs. Huh?

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Recently, we have highlighted a number of divergent trends between ‘soft’ data and ‘hard’ data in both Europe and the US. For the most part, improving survey responses remain unconfirmed by the quantifiable information currently available. The surge in the economic policy uncertainty index is no exception. In 2016, uncertainty rose around the world, led […]

Optimism Is Soaring For Small Business Owners

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The latest NFIB Small Business Survey was a blow out report if there ever was one. Small business optimism increased to 105.8 in December from 98.4 in November and well above expectations of 99.5. The headline is at the highest level since 2004 and the one month increase is the largest on record. The surge […]

European Economic Sentiment Data at a Nine-Year High

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EU economic sentiment data beat expectations in December and rose to levels not seen since 2007. Business confidence led the overall increase with rises in both the industrials and services sectors. A simple diffusion index of this data tracks the breadth across the Euro Zone (19 countries) and the European Union (28 countries). In both cases, […]