Our Performance In the past three months, the asset classes in our model portfolios[1] that delivered the highest U.S. dollar total returns were 7–10-year U.S. Treasuries (+2.3%), emerging market USD-denominated sovereign bonds (+1.0%), and ex-U.S. investment grade bonds (+0.9%). Producing the lowest returns (in dollar terms) were emerging market equity   (‒14.3%), U.S. materials equity (‒13.9%), […]

La renta fija denominada en USD brilla 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 los bonos del Tesoro EE UU 7-10 años (+2.3%), bonos soberanos en USD de mercados emergentes (+1.0%) y deuda corporativa con grado de inversión […]

Fixed income In Macro Views today we wrote that, if markets don’t settle down soon, we’ll change our call for a first Fed hike to March 2016 from October 2015. Our first graph in this blog entry shows you why: bond markets are signaling a relapse in inflation expectations. We also wrote that we’re much […]

Currencies Once again we revise up our projections for the euro and yen against the dollar and down those for the peso. Even though the European Central Bank is likely to loosen its monetary policy stance soon, the euro has a floor under it. This, we think, is because of the ongoing market panic. Our theory […]

Carta de la Presidente Hoy responderé seis preguntas que tal vez tengan acerca de la volatilidad actual: ¿El mercado alcista ha llegado a su fin? ¿Podríamos estar equivocados? ¿Cuándo podría terminar la volatilidad? Si la vimos venir, ¿por qué nuestros portafolios cliente están a la baja? Si no estamos cambiando de estrategias, ¿qué estamos haciendo? […]

Letter from the President Today I answer six questions you may be asking yourself about the ongoing volatility: Has the bull market ended? Could we be wrong? When might the volatility end? If we saw this coming, why are our client portfolios down? If we’re not shifting strategies, what are we doing? Is there anything […]

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 bonos municipales de corto plazo de EE UU con grado de inversión (+0.7%),  los bonos del Tesoro de EE UU  de 7-10 años (0.1%) y de 1-12 meses (0.0%). Las de […]

Our Performance In the past three months, the asset classes in our model portfolios[1] that delivered the highest U.S. dollar returns were U.S. investment-grade municipal bonds (+0.7%), 7-10-year U.S. Treasury bonds (+0.1%) and 1–12-month U.S. Treasury bills (0.0%). Producing the lowest returns (in dollar terms) were emerging market equity   (‒17.5%), U.S. raw materials equity (‒13.3%), […]

Fixed Income Note that the ongoing volatility seems not to have caused any short-term interbank funding problems. But bond-market–implied inflation expectations for the USA dropped last week to 1.42%. Also, corporate bond spreads have spiked, rendering financial conditions tighter. These two factors weaken the case for a Fed hike in September. Given these two factors […]

Equity Summary A (downward) market correction is drop in an index that temporarily interrupts but does not reverse a trend. This is what we think is going on: a temporary drop but not a reversal in a bull market with at least another 18 months to run.