Strategas Research

Latest Strategas Research - 04/07/14

Examining the VIX data over the past 20 years suggests that volatility tends to move in secular fashion -- i.e. the relatively high level of volatility from 1998 to 2003 was bookended by relatively low levels of volatility in the mid-1990s and the mid-2000s. While this is undoubtedly less fun, such markets tend to give truly active managers a leg up.


The organization officially tasked with determining the start and end dates of the recessions – the National Bureau of Economic Research in Cambridge, Massachusetts – has, unsurprisingly, a sophisticated and nuanced approach to coming to its conclusions on the matter. Historically, they have relied heavily, but not exclusively,on four time series: Industrial Production, Real Manufacturing and Trade Sales, Employment, and Real Personal Income Less Transfers. In each instance, the current economic recovery continues to disappoint.


U.S. real GDP in the U.S. rose +3.2% q/q AR in 4Q of 2013, and +1.9% for the year. The fourth quarter - which included the government shutdown -  saw boosts from consumer spending (which added +2.3% points) and investment (which added +0.6%). However, +0.4% of the investment boost was due to inventories. Trade added +1.3% and government subtracted -0.9%. The GDP price index rose +1.3% q/q AR, putting nominal growth at +4.6% for 4Q and +3.4% for 2013. This report suggests...


Highly accommodative monetary policy remains appropriate, especially given the labor market slack indicated by long-term unemployment and the drop in labor force participation. Three Fed members do not see an increase in the fed funds rate until 2016. So, despite the Fed tapering...