Another Fed Statement, No Big Surprises

The Federal Open Market Committee put out its press release today at about 2:15 EST. The committee, currently made up of 10 members, meets 8 times a year to assess financial conditions and determine monetary policy. The Federal Reserve’s primary function is to pursue a dual mandate of full employment and price stability.

Managing Fixed Income

With the advent of Exchange Traded Funds (ETFs), we have raised the question of how to best manage fixed income on multiple occasions. Since our inception, we have used individual municipal and government bonds when we felt there was value in that asset class. This is very normal in the institutional world, and has served…

Follow the Euro

The Euro and S&P 500 don’t have a very high correlation over a long period of time. In non-geek speak, that simply means that the movement in one does not translate to a movement in the same direction of the other all that often. For a quick lesson in correlation, statistically, a correlation of 1…

Surprising Sector Holding Up Best

Since the S&P 500 hit its recent peak of 1,217 on April 23rd, it’s fallen by 13% through yesterday’s closing price of 1,055. It violated (fell below) its longer-term term 200-day moving average on May 20th, and has traded below that important trend indicator since then. Along the way, 9 out of the 10 broad…

Federal Reserve Beige Book

Eight times a year, the Federal Reserve formally comments on current economic conditions in a report commonly called the Beige Book (so named based on the color of its cover). It contains information gathered by each of the twelve Federal Reserve districts, and contains one national summary from the district reports. The book centers on…

That Oogy Feeling

Sometimes you just get a feeling, and it’s not easy to put into words exactly what is generating it, but your gut is telling you that something just isn’t quite right. Yesterday the investment team was discussing the “oogy” feel that the May 6th “flash crash” left behind. Beyond the actual loss on the day,…

Market Volume a Concern

Looking at stock market volume statistics over the last few weeks has not given me much confidence in a resumption of the bull market. In a healthy bull market we would like to see strong volume on up days and/or weak volume on down days. This general pattern is regarded by technicians to be a…

Correlation Breakdown

Over time, the price of gold typically has a fairly strong inverse correlation with the value of the U.S. dollar, meaning that they tend to move in opposite directions. But lately the dollar and gold have been moving higher in lockstep as the long-term inverse correlation has broken down (see chart below). There are a…