In the last week we have seen major moves in the stock market (which most people notice) and, subsequently, the bond market (which most people don’t). Most of these moves are due to concern over how the virus outbreak in China will affect the world economy. Why, you may wonder, would a virus affect the economy? The virus itself...Read More

This is the way the expansion ends, “not with a bang but a whimper.”[1] Though T.S. Eliot’s oft-quoted poem isn’t actually about our economic expansion, its final line does ring true in this case.  As we mentioned in our last letter, this interest rate cycle has been a wimp itself, so it is no surprise we...Read More

Business cycles are a normal part of the economic machine. A period of expansion is followed by a period of stagnation or contraction. The current expansion of 121 months far surpasses most other expansion periods, besides that of the 1990s (120 months). The average length of an economic expansion between 1945 and 2009 was just...Read More

Thirteen has always been an evocative number.  To this day, an estimated 85% of tall buildings don’t label the 13th floor as such, to prevent problems with superstitions or luck.  And now we find ourselves, thirteen years out from the last time the Treasury yield curve inverted, back in the same position.   Prior to...Read More

Yesterday, the Federal Reserve signaled a pause in its increases to the benchmark interest rate.  This is not entirely unexpected, as the Fed had been periodically hiking or pausing for the last three years.  This time, however, Fed Chairman Jerome Powell indicated a likely longer hold. This development falls in line with our assessment of...Read More

In the large, friendly letters of Douglas Adams’ The Hitchhiker’s Guide to the Galaxy, DON’T PANIC.  We are well aware of the dip in bond market values that is reflected in portfolios.  Bond prices move in the opposite direction of yield, so as interest rates rise, the value of existing bonds decreases.  What doesn’t change,...Read More

Despite what seem to be ever-increasing risks in the global economy, the stock market continues to push skyward.  While this may be a sign of economic resilience, it is just as likely to be a sign of people trying to get on board the gains train.  Even those who find the stock market risky, after...Read More

Summertime usually means quieter financial markets, but the recent heat wave and school vacation have done little to temper animation across global markets. May did see a pickup in prepayment speeds, as we discussed in our last update.  30 year mortgage rates have declined in 4 of the last 5 weeks, but remain noticeably higher...Read More

Spring is finally here!  At least, for now it is.  Spring time usually means an uptick in the housing market, as the warm weather and end of the school year entices more people to move.  That means increased prepayments on mortgages, and faster pay down on mortgage-backed bonds like the ones in Cooper Capital portfolios. ...Read More

You may have noticed an increase in stock market activity over the last week.  Since last Friday we’ve seen several major swings in equities in both directions, with the ultimate result being a 10% correction in stock prices.  Some (ourselves included) would say this is long overdue, considering what seemed to be an endless rally...Read More