Currencies Merely to reflect emerging data trends, we revise down our outlook for the USD/YEN to $1.00=¥126 for Q2. Note that our Mexico peso forecast of US$1.00=MXN16.00 for quarter 3 is our way to signal that we expect the peso to dip sharply some time in quarter 3. It may actually already start to recover […]

Equity Summary As you can see by the graph below, China’s stock market had been bubbling and now is correcting. The correction began on June 11 and through Friday 26 June measured 11.3% in USD terms. So far, our clients are scarcely feeling a thing. Only clients with investment horizons exceeding five years have any […]

Fixed Income Given uncertainty around Greece and the referendum it has scheduled for Sunday 5 July, we expect safe havens such as U.S. Treasury securities to move up in price a bit next week. Today the yield on the 10-year bond closed at 2.47%. But we are not revising down our forecast for the yield […]

Carta de la Presidente Estamos actualizando las estrategias de[1] nuestros portafolios modelo. Estamos cambiando el horizonte de inversión para nuestro portafolio modelo de corto plazo, La Carpeta Negra Short Term (LCN-ST), de 6-24 meses a 12-24 meses. Es la manera que tenemos de recomendar a los clientes que mantengan un año de requisitos de liquidez […]

Letter from the President We’re updating our model portfolio[1] strategies. We’re changing the investment horizon for La Carpeta Negra Short Term (LCN-ST) to 12–24 months from 6–24 months. This is our way of recommending that clients keep one year of liquidity requirements in U.S. dollar cash. We define “cash” as anything FDIC protected (checking and […]

¿Cómo van nuestros portafolios modelo? Nuestro desempeño En los últimos tres meses, las clases de activos en nuestros portafolios modelo[1] de mayor rentabilidad en términos del dólar estadounidense fueron la renta variable mercados desarrollados de Europa (6.6%), renta variable mercados emergentes (4.9%) y bonos convertibles EE UU (3.0%). Las de peor desempeño (en dólares) fueron […]

Our Performance In the past three months, the asset classes in our model portfolios[1] that delivered the highest U.S. dollar returns were European developed market (6.6%), emerging market equity (4.9%), and US convertible bonds (3.0%). Producing the lowest returns (in dollar terms) were US real estate (‒5.4%), ExUS DM sovereign bonds (‒2.9%), and US Treasuries […]

Alternative Assets The 5 June 2015 OPEC meeting ended in a consensus decision to leave its output target at 30 mb/d and thus hold to its November 2014 decision to allow market forces to set prices. We see this as an effort by OPEC to force U.S. shale and other non-OPEC producers to lower output […]

Fixed Income Under our central scenario assumptions, in which Greece does not default or leave the euro area this year, we expect yields to move up for all maturities and the curve to flatten. We see U.S. Treasuries trending down now for the next 12 months. Of course, if Greece does default and exit, the […]

Equity In our central scenario, stock market volatility will now move sharply up and stocks will start trending down and continue to do so over the next few months. Soon after the Fed begins its normalization process (probably in September), however, stocks quickly rebound, by the end of this year recovering fully and perhaps even […]