With the election being over, what comes next?

 11/9/2020  The election results may have surprised some forecasters (and certainly pollsters), as the predicted ‘blue wave’ of Democrats capturing both the Presidency and Senate fell short. Democrats did retain the House of Representatives, as anticipated, although more seats than expected were lost. Looking at results broadly, the electorate remains…

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What would be the impact of a Trump Presidential reelection for a second term? How important is the President on financial markets anyway?

 9/21/2020  In many ways, policies to expect would likely be similar to what’s in place today, and largely opposite of those proposed under a Biden administration discussed a few weeks ago. At the same time, Trump’s policies have not followed ‘traditional’ Republican ideologies from decades past in a variety of…

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What would be the impact of a Biden Presidential election win, potentially including a Democratic takeover of the Senate?

 9/8/2020  The impact of a potential new President on stock market returns is always a key question in the weeks prior to a general election. It’s important to keep in mind that, despite frequent worries around this time of year, and that financial markets may react in the shorter-term term…

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What causes sudden market declines like we saw this week, seemingly out of nowhere?

 9/8/2020  There often isn’t a concrete reason. It’s important to remember that stocks trade in a market like any other good: when there are more buyers than sellers, prices move higher; when buyers dry up, this can reverse quickly. It’s been argued that certain large cap growth stocks have become…

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Are the financial markets (‘Wall Street’) and the real economy (‘Main Street’) disconnected?

 7/13/2020  Although they may appear to be disconnected on the surface, and near-term outcomes are impossible to predict, they’re likely no more disconnected than usual. One of the more important considerations to keep in mind about financial markets is that they’ve always been forward looking. Economic data, by its nature…

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Are negative interest rates again being considered as a viable option for the U.S.?

 5/26/2020  With U.S. short-term interest rates again reaching the zero bound (fed funds rate of 0.00-0.25%), debate has surfaced again about moving the target range further—to below-zero territory. Several developed nations, mostly in Europe, moved down this path years ago, and now remain entrenched in it, with global slowing causing…

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Have some financial asset prices bounced back too far and too fast?

 5/18/2020  This is never simple to evaluate, as current prices for rates and risk assets have a behavioral component, and appropriate price levels may only be obvious in hindsight. In past cycles, equity bear markets and subsequent recoveries have unfolded over months, not weeks. This more recent volatility event was…

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