Sharing Our Thoughts and Insights


Mortgage Rates Touch 3-Year Low

For those looking to refinance their mortgage (or with children looking to purchase a new home) now may be a great time: the average 30-year, fixed rate mortgage now stands at around 3.56%, a three-year low.

The Market Has New Leadership

The last week has seen a sharp reversal in the best and worst performing stocks. The stocks driving the market gains throughout the year have given way to the laggards over the last few trading sessions.

The Muni Market is Shrinking

Economics 101 tells us that lower supply (all else equal) will result in higher prices. And that’s just what’s happened, as Municipal bond returns have outpaced taxable bond returns over the last ten years (4.1% to 3.9%).

What is the Yield Curve Telling Us?

The inversion of the yield curve (where short-term rates are higher than long-term rates) is one of the most reliable predictors of a recession. As it happens, the Treasury yield curve is currently inverted with the 10-Year yield (1.6%) well below that of the 3-Month yield (2.0%). So does that mean all signs are pointing to a recession?

Companies are Borrowing to Buy Back Stock

Monetary policy (meaning the Federal Reserve lowering short-term interest rates) has become less effective at spurring economic growth in the recent past. One big reason may be the weakening link between company borrowing and company spending on capital expenditures, which is thought to be a major driver of economic growth.

The Dividend Trap

With nearly half of the companies in the S&P 500 now paying a higher dividend yield than the 10-year Treasury rate, it’s tempting to sell bonds and buy high dividend stocks instead.