In several prior posts, we have highlighted that the consumer has been the source of near-term strength in the U.S. economy, but we believe the long-term potential of the consumer is generally tied to a rebound in the corporate sector.  If the corporate sector remains weak, there is a potential risk that layoffs may increase,...Read More

The third quarter GDP report was another reminder that the consumer continues to be the main source of positive economic growth in the U.S.  GDP growth in the third quarter was 1.9% annualized, the exact contribution from Personal Consumer Expenditures.  Private nonresidential investment (capex) declined by 3% annualized and detracted from GDP growth for the...Read More

As mentioned in prior posts, the consumer segments of the economy have been generally performing better than the corporate segments.  This pattern will likely persist if corporations continue to generate the profits required to support their current payrolls.  S&P 500 earnings per share growth was negative on a year-over-year basis in Q1 and Q2 of...Read More

The FOMC has voted to lower rates twice this year. Some market commentators have suggested that this move to a more accommodative stance is an indication that economic growth and market performance should improve. Historical analysis suggests that it depends on how accommodative the FOMC has to be.Read More

The following paragraph is a refresher on our macro analysis framework from a prior post: We divide the economy into four components: consumer, corporate, real estate, and government.  We evaluate each component along several factors including, but not limited to, liquidity, leverage, and sentiment.  Each factor is evaluated on both an absolute and trend basis...Read More

In last week’s post, we discussed the monetary and fiscal policy conditions that were in-place the last time the FOMC started to lower interest rates.  As a follow up, we began looking at the economic and market conditions that were in-place in September 2007.  Starting with the U.S. economy, the major indicators of economic growth...Read More

In a prior post, we mentioned that the FOMC and global central banks have started lowering interest rates.  There has been an ongoing debate among financial market commentators about how this will impact the economy and financial assets.  One of the biggest factors of this debate is whether global central banks and governments have enough...Read More

Last week, we provided an update on the global economy and what to watch for as potential signs of improvement.  Now, we are going to discuss signs that could tell us whether the global equity market will reach a bottom in the near term. One of the indicators is a Bottom Watch report by Ned...Read More

The FOMC moved to lower interest rates on July 31st for the first time since December 2008.  However, the most recent policy moves made by the majority of global central banks have been to lower rates, which has been reported less frequently.  Most of those rate cuts have occurred this year. Copyright 2019 Ned Davis...Read More

At Boyd Watterson Asset Management, one of our core beliefs when it comes to managing fixed income portfolios is there are certain parts of the corporate credit market that offer more favorable characteristics than others. We refer to the BBB-BB rated portion of the corporate credit curve as “mid-grade,” as they fall in the middle...Read More