Economic and Market Research
Valuable Insights & Opportunities
The latest research, data, and insights from the investment experts at Key Private Bank.
Key Questions: Is the Backup in Bond Yields Bad for Stocks?
Last week, the yield on the benchmark 10-year US Treasury note jumped to 1.54%, surging 50 basis points (0.50%) in the past month for one of the fastest monthly increases on record.
Key Private Bank Investment Brief
The global spread of COVID-19 has caused significant market movements and uncertainty among investors.
Your investment brief houses our experts' latest analysis and strategies for navigating the turbulence created by the outbreak—keeping you updated on our thinking and how these changes might impact your portfolio.
Key Questions: What Does the Crisis in Texas say About Energy Markets?
In our November 30, 2020 edition of Key Questions titled, "What Surprises Might 2021 Have for Us?," we said the following: "Crude oil exits 2021 above $60 per barrel, and Energy is the best performing sector in the S&P 500 Index. With the global economy set to rebound sharply once vaccines become available, it becomes apparent to market participants just how much damage was done to US upstream production capabilities. Demand increases significantly, and the slow reaction function of producers causes prices to rise more than the consensus expects. Equity investors who have shunned the Energy sector are forced to chase performance, further driving rotation into Cyclicals."
Key Questions: What Causes Bubbles To Burst?
In prior essays, we described how certain conditions that existed during periods in which asset bubbles were created are again apparent. Of these conditions, there are three that commonly surfaced: Interest rates were at or near zero; central banks assured the markets that interest rates would remain low for an extended period, forcing investors out on the risk curve; and an abundance of liquidity. These circumstances are evident today.
Key Investment Perspectives: February 2021
The world’s attention in the opening month of 2021 was riveted on the January 6 storming of the US Capitol and the presence of thousands of National Guardsmen in Washington for the Biden-Harris inauguration.
Key Questions: Are Long-Term Interest Rates Heading Higher?
Since the start of January, the 10-year US Treasury note yield has climbed 25 basis points to 1.16%. With short-term US Treasury yields anchored by the near-zero federal funds rate and limited volatility in the intermediate maturities due to the Federal Reserve’s (Fed) Treasury purchases, fluctuations in long-term interest rates will drive changes in the shape of the Treasury yield curve.
Key Questions: Is GameStop’s Rise "Game Over" for the Stock Market?
Last week, we addressed the question, "Is the Federal Reserve fueling a stock market bubble?." In it, we discussed how ultra-low interest rates – and assurances from the Fed that they would remain very low for a long time – have incentivized investors to move out the risk curve to generate a reasonable rate of return.
Key Questions: Is the Federal Reserve Fueling a Stock Market Bubble?
The Federal Reserve and the stock market have become co-dependent, rendering selectivity and risk management of paramount importance.
Key Questions: What Makes a Bond Green?
Green bonds can provide a great opportunity for sustainability-focused investors to make an impact on environmental challenges without compromising risk/return objectives.
Key Investment Perspectives: January 2021
The prospects for widespread vaccinations for COVID-19 are providing a welcome dose of optimism that the economy will be able to fully reopen in 2021.
Key Questions: Have US-Chinese Relations Morphed into a Financial War?
On November 12, 2020, President Trump issued an executive order limiting investment in companies deemed by the Department of Defense (DoD) to either directly or indirectly benefit the Chinese military. The order was designed to limit investors who might unwittingly funnel financial capital to the Communist Party’s military wing, the People’s Liberation Army.
Key Questions: How Did Markets React to Events at the Capitol Building?
Most assuredly, there are people who are far more eloquent than I who can poetically capture the events that took place yesterday, January 6, 2021, in Washington, DC. There will be other people who possess much deeper knowledge of the inner workings of the US Constitution than I who can illuminate their longer-term implications. And there may be some who take exception to my comments below based on their own beliefs, understandings, and interpretations.