Why strong fundamentals from the likes of O’Reilly Automotive, Royal Bank of Canada, Domino’s Pizza, and Shell provide investors solid performance even in difficult times.
We believe Jerome Powell's announcement that the Fed is not planning to raise rates in the immediate future validates the key points we made over two years ago.
Even with inflation running below target, the Fed chose to raise interest rates again. The Fed’s influence is overstated, but it’s still troubling that major policymakers are acting on such an outdated view of the economy.
Investors agonizing over the Fed should focus their efforts elsewhere. Instead of guessing where interest rates will go, read some of the thousands of annual 10-K reports that have come out in the past month.
As 2016 comes to an end, we’d like to highlight some of New Constructs’ many accomplishments for this year. We’ve helped our partners and clients avoid stock blow-ups, find long ideas that soar and leverage Model Portfolios that outperform across the board.
As we’ve argued in the past, the Fed is irrelevant. The market has already driven interest rates up in response to Trump’s election and a more positive economic outlook.
The Fed needs to acknowledge that it’s no longer in the driver’s seat and stop with the vague hints about “normalizing” monetary policy. Low interest rates are the new normal, and there’s nothing the Fed can do about that fact.
Endlessly debating the actions of the Fed, either by political candidates or financial talking heads, has become a sideshow that distracts from the real workings of the economy and the stock market.
It’s time to consider a new paradigm for interest rates – a paradigm where treasury rates remain ultra low and riskier investments are priced by a decentralized market instead of a central bank.
The internet economy may be in the early stages of transforming our daily lives, but it’s already wreaking havoc on economic policy. As mentioned at the top of this piece, the Fed cannot manage to hit its 2% inflation target no matter how hard it tries, so maybe it should stop trying.
I believe the US economy is undergoing a restructuring where we, as a society, are becoming radically more productive. I think that we are entering a new economic paradigm of productivity in both our corporate and labor markets. In this new paradigm, we achieve enough gains in productivity to offset the inflationary forces of QE.
Too much of the rhetoric surrounding S&P’s downgrade of US debt misses the largest and most important point made by S&P’s bold move: the U.S. financial situation is very bad and getting worse with no reconciliation in sight.
It is difficult to deny the poor credit quality of an entity that grossly overspends its revenues, has a mountain of debt (most of which matures within the next few years) and has taken no meaningful steps toward remedying the situation?
By quibbling over S&P’s procedures and calculations, the Treasury and White House reveal that they have no solid rationale for disagreeing with the downgrade.