Click here to download the slides (PDF) We will eventually restrict access to our videos so that only registered Cornerstone Macro clients will be able to view them. Please follow these easy steps (you’ll only need to do it once): 1. Click the following link: http://www.cornerstonemacro.com/register/ 2. Fill out the following: Name, Email, Password (you can create your own), as well as the security code. 3. We will confirm you on the back end and you will receive a confirmation email of your registration shortly. Main points: – Today’s US employment report doesn’t matter for Fed policy. – Tapering to … Read More
Overall, the policy backdrop is neutral to slightly favorable for REITs, but with some important risks. In today’s report, we take a closer look at the implications of fiscal policy, monetary policy, tax policy, housing as well as a few other issues for the REIT industry.
The weak ADP report and the even weaker non-manufacturing ISM employment component released yesterday may be signs that tomorrow’s employment report is likely to be soft again. Investors typically pay a lot of attention to the employment report’s implications for Fed policy, but should they do the same this time? In the note we explain how the Fed is thinking about the issue, how much weight it gives to weather effects, and we draw our conclusions on the importance of tomorrow’s employment report.
It was reported yesterday that the White House intends to allow people to keep their existing health plans. An announcement may be imminent. Also in today’s report, we comment on Obama’s budget and the Texas primary.
• In light of Nancy’s and François’ pessimistic views on Japan we are often asked why Japanese policymakers insist on Abenomics. Why do they believe it will all work in the end? • For the BOJ and other policymakers it’s all about ending the long period of deflation. If inflation returns to a modest positive level (2%), economic activity will pick up, Japan growth will resume, the stock market will do well, and the debt problem will be mitigated. • Policymakers think that the best way to produce moderate positive inflation is to lift inflation expectations. If that happens, higher … Read More
President Obama doesn’t have a credible military option to respond to the Russian invasion of Crimea. Secretary of State John Kerry said yesterday that the US will work with its allies to isolate Russia, but Putin is not likely to be swayed by the disapproval of the international community. The only real leverage the US has is economic sanctions. Besides the obvious risk of a wider military conflict, the biggest risks for investors are that the US imposes sanctions on Russia that cripple its banking system or that Russia limits its supply of natural gas to Europe, either of which … Read More
Click here to download the slides (PDF) Main Points: – Tax reform unlikely to pass this year. – Who are the winners and losers? – Democratic vulnerability going into midterm elections. Colorado Senate race moves to toss up. – Yellen raised the bar even more for stopping the tapering in March. – ECB on hold next week as a base case – data don’t scream “easing.” – BOJ also on hold for now, but low bar for additional QE. – Gradual, reluctant tightening in emerging markets.
A Closer Look At Camp’s Tax Reform Plan We wrote about House Ways and Means Chairman Dave Camp’s tax reform plan on Wednesday before it was released and when details were still sketchy. In today’s report, we take a closer look at the proposal, especially its impact on different sectors of the economy. The biggest losers are the housing industry, capital intensive companies, alternative energy, and companies dependent on advertising. Multinationals would be helped in the long run. Retailers and others that pay high effective tax rates would benefit. The medical device industry would benefit from the repeal of the … Read More
We received a number of questions from clients on the significance of the EU parliamentary elections in May. In particular, there is concern in the press and among investors that euro-skeptic parties could affect the direction of policy in Europe and thus be a threat to the EU market outlook. In the report we look at poll numbers, electoral rules, and how policy is made in the EU in order to assess the severity of that threat. Also in today’s report, we have an update on the contest for the Senate.
House Ways and Means Committee Chairman Dave Camp will unveil his tax reform plan today at 1:30, although a number of the major elements have begun to leak out during the last few days. His plan, or any other tax reform plan, has virtually no chance of becoming law this year. However, his plan is worth reviewing carefully for a few reasons. First, Camp proposes a special bank tax similar to one once proposed by President Obama, so Camp’s plan could breathe new life into that idea. Second, and much more broadly, the reaction to Camp’s proposal will be a … Read More