Thoughts on the Market

Latest Episodes:

Andrew Sheets: Markets 2021 - Using Past as Prologue Jun 17, 2021

Show notes

Although investors often look to the past to assess current market conditions (such as a post-pandemic recovery or rising inflation), one year in particular may serve as an interesting guidepost.

Michael Zezas: For Infrastructure, Go Big or Go Bipartisan? Jun 16, 2021

Show notes

Will negotiations on a U.S. infrastructure deal lead to a bipartisan bill or a Democrats-only bill? The answer matters quite a bit for fixed-income investors.

Graham Secker: European Equities Take a Turn Toward the Micro Jun 15, 2021

Show notes

Over the past few weeks, European equity flows have been at the highest levels in three years. Could a period of consolidation be ahead?

Mike Wilson: A View from the Peak? Jun 14, 2021

Show notes

While the outlook for growth and inflation looks strong through next year, both may disappoint lofty investor expectations—and bring consequences for some stock sectors.

Andrew Sheets: Markets Shrug at “High” Inflation Jun 11, 2021

Show notes

This month’s U.S. consumer price inflation data showed a 5% rise versus a year ago, yet markets seemed unconcerned. A look at why markets could be looking past rising inflation readings.

Reza Moghadam: What Happens When the Euro Goes Digital? Jun 10, 2021

Show notes

The European Central Bank may soon announce the trial launch of a digital euro. Reza Moghadam, Morgan Stanley's Chief Economic Advisor, digs into potential risks and innovations.

Michael Zezas: Preparing to Disconnect Jun 10, 2021

Show notes

With tensions not abating, investors should prepare for a world where these major economies are significantly less integrated. Michael Zezas explains.

Special Episode: What to Do When Everything is Rich Jun 08, 2021

Show notes

Chief Cross-Asset Strategist Andrew Sheets and Head of Fixed Income Strategy Vishy Tirupattur cover a key topic on the minds of many investors: where to invest now?

Mortgage Backed Securities (MBS) and Collateralized Mortgage Obligations (CMO)

Principal is returned on a monthly basis over the life of the security. Principal prepayment can significantly affect the monthly income stream and the maturity of any type of MBS, including standard MBS, CMOs and Lottery Bonds. Yields and average lives are estimated based on prepayment assumptions and are subject to change based on actual prepayment of the mortgages in the underlying pools. The level of predictability of an MBS/CMO's average life, and its market price, depends on the type of MBS/CMO class purchased and interest rate movements. In general, as interest rates fall, prepayment speeds are likely to increase, thus shortening the MBS/CMO's average life and likely causing its market price to rise. Conversely, as interest rates rise, prepayment speeds are likely to decrease, thus lengthening average life and likely causing the MBS/CMO's market price to fall. Some MBS/CMOs may have “original issue discount” (OID). OID occurs if the MBS/CMO’s original issue price is below its stated redemption price at maturity, and results in “imputed interest” that must be reported annually for tax purposes, resulting in a tax liability even though interest was not received. Investors are urged to consult their tax advisors for more information. Government agency backing applies only to the face value of the CMO and not to any premium paid.

Mike Wilson: More Data Doesn’t Always Mean More Certainty Jun 08, 2021

Show notes

New macro data on employment and consumer prices are unlikely to settle market uncertainties about inflation and course of the recovery. Mike Wilson explains.

Andrew Sheets: The Fed’s Fascinating Dilemma Jun 05, 2021

Show notes

The pillars that have supported extraordinary action by the Federal Reserve are now starting to shift. That means support could be withdrawn. The question is, when?

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