Ships and Chips

Market Minute

October 2021 – Scott Rosenquist, CFA®

The global supply chain continues to show signs of strain as shortages of labor, transportation, and storage coincide with strong demand for goods going into the holiday season. The ports in California have a record number of ships waiting to unload while there are not enough truck drivers to move the containers. Covid-related shutdowns to factories across the globe has limited the production of important components such as semiconductor chips. The auto industry has lost production this year due to the chip shortage. All these issues highlight the importance of supply chains to the economy.

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The Wall of Worry

Market Memo

September 2021 – Daniel Zalipski, CFA®

They say the markets climb a wall of worry, and this past quarter has been no exception.  It is somewhat natural for investors to be on the lookout for the next event that could trigger a dramatic sell-off, even more so when the markets are bouncing near all-time highs.  This practice seems to exaggerate the longer the broad market climbs higher without a decent pullback.  The longer this type of environment persists, the louder the warnings of selloffs and corrections will get.  Will the delta variant send us into a tailspin, or perhaps the proposed tax increases will spook the markets, or will the Fed send us lower? 

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Tax Code Anomalies

September 2021 – By Bob Veres

Congress is getting ready to revise the U.S. tax code once again, and you can bet that the final version won’t be subtracting any pages from a document that now contains nearly 10,000 selections and two million words.  Over the past 10 years, alone, the tax code has been amended or revised over 4,000 times, with provisions covering pet moving expenses for people who lost their job, a deduction for clarinet lessons if it helps correct a child’s overbite, and a special carve-out for repairs for whaling boats—even though hunting whales is currently banned by the United States government.

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Government Bonds Around the World

Market Minute

September 2021 – By Bob Veres

There is absolutely no question that, from a historical standpoint, yields on U.S. government bonds are terrible.  10-year Treasuries that were issued at 1.25% a year are now yielding 1.297%, which is not terrific when the inflation rate is somewhere between 6% and 7%.  If you go shorter term, 5-year Treasuries are trading at a yield of 0.788% a year, and 2-year Treasuries are offering a somewhat less-than-generous yield of 0.215%.

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