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Articles & Updates

  • Fixed Income Market Update
    November 4, 2022 Wednesday afternoon the Fed Statement came out and it seemed, reading between the lines, that perhaps the Fed was changing their tune (Dare we say, Relenting?). As the market breathed a sigh of relief, the press conference started, and we found out Chairman Powell and the Fed are
  • Fixed Income Market Update
    October 28, 2022 The fixed income markets are abuzz with the potential of a Fed Pivot, or the idea the Fed might change from hiking to pausing to cutting. We say, will the Fed just relent? The Fed, focusing on not repeating the mistakes of the 70’s, is quickly raising rates to a
  • Fixed Income Market Update
    October 14, 2022 It’s an old saying and it’s hard to refute. Can you have your cake and eat it too? Sometimes in the fixed income markets, the answer is yes you can. Each day, the market shifts, rates change, and laws and regulations get passed. While these changes present challenges to some,
  • Fixed Income Market Update
    October 7, 2022 Paul Volcker was Chairman of the Federal Reserve Board of Governors from 1979 through 1987. He and his board are widely credited with curbing the high rate of inflation in the late 70’s and early 80’s. He accomplished this by raising the overnight fed funds rate to a level
  • Fixed Income Market Update
    September 20, 2022 The home of the Federal Reserve Bank is on Constitution Avenue in Washington, DC. That’s just a few blocks away from our headquarters so we speak from experience when we say: As the Fed considers a historic third 75 basis point increase, it’s quiet on Constitution Avenue. FOMC participants
  • Fixed Income Market Update
    September 9, 2022 Let me start by expressing our condolences to the Royal Family and the English people for the loss of their monarch, Queen Elizabeth II. She oversaw tremendous change during her 70-year reign, much of it brought on by major discoveries in physics, chemistry and technology. Consider the impact of
  • Fixed Income Market Update
    September 2, 2022 Short and to the point. That’s how Chairman Powell’s annual speech was described. Not known for his brevity, and expected to speak for thirty minutes, the Chairman spoke for a little over eight minutes and the message was clear. Expect higher rates, for a longer period, potentially causing economic
  • Fixed Income Market Update
    July 1, 2022 We said it, the Treasury Secretary said it, and even the Fed Chair has said it, the Fed is behind inflation and needs to do historic interest rate increases to catch up to inflation. But given the potential of another 75-bps increase, the downturn in some commodities and
  • Fixed Income Market Update
    June 17, 2022 Friday the Bureau of Labor Statistics reported the May inflation numbers and they didn’t show any improvement. We have been in this above 4% inflation environment for over a year, and this latest print of 8.6% is the highest since December 1981. So it’s a good question
  • Fixed Income Market Update
    June 10, 2022 Earnings season and investor days always make for great sound bites. No one is better at this than Jamie Dimon at JP Morgan. His wonderful headline: “You know I said there’s storm clouds, but I’m going to change it… it’s a hurricane” Jammie Dimon, JP Morgan Analyst Day But
  • Fixed Income Market Update
    May 27, 2022 What a difference a week makes. Markets shrugged off the higher rate fears, shook off the recession worries and got down to buying. From last Thursday, May 19th through yesterday May 26th, many Bloomberg fixed income indices rallied strongly. Led by the High Yield Index up 2.80%,
  • Fixed Income Market Update
    May 20, 2022 It’s been a record year in fixed income. Just not the kind of record we want to be setting. But with all the increases in rates, worries about recession and the volatility brought about by both, we believe there is good value in some areas of fixed income. This
  • Fixed Income Market Update
    April 29, 2022 As we mentioned last week, over the next year, we think there are three scenarios for the economy and the fixed income market. All three scenarios hinge on the trajectory of inflation. Inflation is either going to peak and cool off, or it’s not peaking or cooling off. If it’s
  • Fixed Income Market Update
    April 22, 2022 It’s been a dreary time in bond land. It seems every day the market just grinds continually lower, wearing on minds, emotions, and portfolios. This was supposed to be the capital preservation part of the portfolio, right? And didn’t the Fed just start raising rates? If we believe the futures market,
  • Fixed Income Market Update
    April 1, 2022 There are many advantages to investing in bonds, but one of my favorites is the ability to forecast the future. I’m not talking about if economy is going into a recession or if the Bengals are going to win the Superbowl, I’m saying given a set of
  • Fixed Income Sector Review
    Written by Peter Baden, CFA, Chief Investment Officer In case the market didn’t hear him at his press conference last Wednesday, Jerome Powell, the Acting Federal Reserve Chairman, gave a very clear speech on Monday at the 38th annual NABE Economic Policy Conference. One early quote: My colleagues and I are acutely
  • Are We Inverted Yet?
    Written by Peter Baden, CFA, Chief Investment Officer The much anticipated day came and the Fed, once again, did not disappoint. Wednesday, March 16th is the start of the next interest rate cycle. By raising the Overnight Fed Funds rate by 25 basis points, to a range of 0.25-0.5% the Fed is no
  • Wall of Worry
    Written by Peter Baden, CFA, Chief Investment Officer As we count the worries on investors’ minds, we can understand the move to reduce risk. Top of the list of worries: A war, worse, a war zone that includes nuclear power plants, in Europe. Next, The decoupling of the Russian and Ukrainian
  • War vs. Inflation
    Written by Peter Baden, CFA, Chief Investment Officer Fixed income markets absorbed a lot of information this week, Inflation, Fed participant speeches and a war in Europe. Of the three Inflation concerns won out. The yield on the 10 year US Treasury started the week at 1.931% and as of this writing
  • What Happens When Rates Go Up?
    Written by Peter Baden, CFA, Chief Investment Officer As we foreshadowed in our earlier updates, the January CPI report was going to be high, and it did not disappoint. The market reaction was swift, with the yields rising across the board. When some Fed governors used speaking opportunities to push to address
  • Individual Bond Portfolios Contrast Record Fund Outflows
    The municipal bond market today is dominated by institutions, large insurance companies and banks are an important part of the municipal bond market. Tax-free municipal bond funds and ETFs have become a much larger percentage of the municipal market over the years. Wealthy investors who previously were sold individual bonds for their portfolios are now becoming more accustomed to purchasing funds and ETFs for their municipal fixed income needs. In addition to the funds, separate account managers like Genoa Asset Management are now playing a greater role in the municipal bond market.
  • Shifting Through Uncertainty
    Written by Peter Baden, CFA, Chief Investment Officer Headlines of the Week “Life is so Uncertain” – Lyle Lovett “Hear I Am” Turning points in the market produce plenty of uncertainty and with it volatility. Let’s review, a few months ago the Fed was keeping rates low, buying bonds, and not
  • Inflation & Weekly Update
    Written by Peter Baden, CFA, Chief Investment Officer Headlines of the Week The Federal Reserve Some Fed meetings are more important than others. The Fed meets next week and it promises to be an interesting meeting. With inflation readings the highest in decades, a confirmed chair, empty seats filled (or soon to
  • January Inflation Update
    Written by Peter Baden, CFA, Chief Investment Officer Headlines of the Week US Bureau of Statistics – CPI “When demand exceeds supply, the price must go up!” Or so my Microeconomics 101 professor used to say. Let’s look at our current inflation situation through that lens. Spring 2020: Pandemic hits, we
  • Fixed Income Sector Review
    Written by Peter Baden, CFA, Chief Investment Officer Sector Review With the Fed tapering and entering a new phase of the rate cycle, we anticipate increased volatility in the markets. With volatility comes opportunity to pick up bonds at good prices and improve our portfolios. We continue to like municipal bonds, improving
  • 2021 Year End Outlook & Update
    All in all, 2021 was a reasonable year. While the bond indices didn’t show much strength, our hard work paid off and we had a good year. As we look into 2022, we expect another challenging year, but we are prepared for it. We are positioning our portfolios to take
  • December Inflation Update
    Written by Peter Baden, CFA, Chief Investment Officer Headlines of the Week US Bureau of Statistics – CPI Retiring “Transitory”… Google “Define: Transitory” you get a quick definition: “not permanent”. Fed Chairman Powell stated this is what they meant by “Transitory”. However, scroll down a bit and Merriam-Webster definition is: “of brief
  • Weekly Fixed Income Update
    Written by Sarah Conwell, Portfolio Manager Headlines of the Week Biden signs temporary funding bill to prevent government shutdown Sen. Warren calls Fed Chair Powell a ‘dangerous man,’ says she will oppose his renomination China Hidden Local Government Debt Is Half of GDP, Goldman Says Two Fed officials depart amid
  • Weekly Fixed Income Update
    Written by Sarah Conwell, Portfolio Manager Headlines of the Week Schumer sets Monday showdown on debt ceiling-government funding bill Evergrande stays silent on its $83 million dollar bond interest payment, leaving investors in limbo The US Treasury yield curve steepened in the week, with the lion’s share of the long-term
  • Weekly Fixed Income Update
    Written by Peter Baden, CFA, Chief Investment Officer Headlines of the Week Social Security COLI Increases, largest in 40 years Tapering on Track Taper now or Taper Later? That is the question on the markets mind. Analyzing the various economic tea leaves, the Fed could easily justify starting the Taper now