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The Week Ahead – A Visit from St. Nicholas

Welcome to “The Week Ahead” where we take a moment to provide our thoughts on what we can expect in markets and the economy during the upcoming week.

“'Twas the night before Christmas, when markets flowed with no care,
Not a creature was stirring, least of all a bear,
Investments and portfolios were looked at with care,
In hopes that high returns soon would be there;
Investors were nestled all snug in their beds,
While visions of bull markets danced in their heads”

Clement Clarke Moore’s 1823 original version of “A Visit from St. Nicholas”, or more commonly known as “The Night Before Christmas”, was pivotal in reframing the Santa Claus that we know today as well as the concept of gift giving. It’s a far cry from the origins of Bishop St. Nicholas from Turkey during the fourth century! It took over 1,500 years for western civilization to reimagine Christmas into the Hallmark holiday that it is today.

It’s not widely known, but Sweden’s central bank, Sveriges Riksbank, is the world’s oldest central bank founded in 1668. It was also the very first central bank to try negative interest rates as a way to stimulate their economy in July 2009. Other than a four-month window in 2014/2015, the Riksbank has implemented a negative interest rate policy… until this past week when they raised rates to 0.00%. Until the Riksbank tried their grand experiment, zero had been long considered the floor for interest rates. Heading into the new decade, the grand experiment continues as Japan, Denmark, and Switzerland continue with explicit negative interest rates and the Euro Zone and Sweden at zero. As the global economy continues to lift itself up from the Great Financial Recession from the prior decade, we will probably need at least another decade to see if the experiment of negative interest rates was successful.

It’s not widely known, but Sweden’s central bank, Sveriges Riksbank, is the world’s oldest central bank founded in 1668. It was also the very first central bank to try negative interest rates as a way to stimulate their economy in July 2009. Other than a four-month window in 2014/2015, the Riksbank has implemented a negative interest rate policy… until this past week when they raised rates to 0.00%. Until the Riksbank tried their grand experiment, zero had been long considered the floor for interest rates. Heading into the new decade, the grand experiment continues as Japan, Denmark, and Switzerland continue with explicit negative interest rates and the eurozone and Sweden at zero. As the global economy continues to lift itself up from the Great Financial Recession from the prior decade, we will probably need at least another decade to see if the experiment of negative interest rates was successful.

A Visit from St. Nicholas – Clement Clark Moore

'Twas the night before Christmas, when all through the house
Not a creature was stirring, not even a mouse;
The stockings were hung by the chimney with care,
In hopes that St. Nicholas soon would be there;
The children were nestled all snug in their beds,
While visions of sugar-plums danced in their heads;
And mamma in her ’kerchief, and I in my cap,
Had just settled our brains for a long winter’s nap,
When out on the lawn there arose such a clatter,
I sprang from the bed to see what was the matter.
Away to the window I flew like a flash,
Tore open the shutters and threw up the sash.
The moon on the breast of the new-fallen snow
Gave the lustre of mid-day to objects below,
When, what to my wondering eyes should appear,
But a miniature sleigh, and eight tiny reindeer,
With a little old driver, so lively and quick,
I knew in a moment it must be St. Nick.
More rapid than eagles his coursers they came,
And he whistled, and shouted, and called them by name;
"Now, Dasher! now, Dancer! now, Prancer and Vixen!
On, Comet! on, Cupid! on, Donder and Blitzen!
To the top of the porch! to the top of the wall!
Now dash away! dash away! dash away all!"
As dry leaves that before the wild hurricane fly,
When they meet with an obstacle, mount to the sky;
So up to the house-top the coursers they flew,
With the sleigh full of Toys, and St. Nicholas too.
And then, in a twinkling, I heard on the roof
The prancing and pawing of each little hoof.
As I drew in my head, and was turning around,
Down the chimney St. Nicholas came with a bound.
He was dressed all in fur, from his head to his foot,
And his clothes were all tarnished with ashes and soot;
A bundle of Toys he had flung on his back,
And he looked like a pedler just opening his pack.
His eyes—how they twinkled! his dimples how merry!
His cheeks were like roses, his nose like a cherry!
His droll little mouth was drawn up like a bow
And the beard of his chin was as white as the snow;
The stump of a pipe he held tight in his teeth,
And the smoke it encircled his head like a wreath;
He had a broad face and a little round belly,
That shook when he laughed, like a bowlful of jelly.
He was chubby and plump, a right jolly old elf,
And I laughed when I saw him, in spite of myself;
A wink of his eye and a twist of his head,
Soon gave me to know I had nothing to dread;
He spoke not a word, but went straight to his work,
And filled all the stockings; then turned with a jerk,
And laying his finger aside of his nose,
And giving a nod, up the chimney he rose;
He sprang to his sleigh, to his team gave a whistle,
And away they all flew like the down of a thistle,
But I heard him exclaim, ere he drove out of sight,
"Happy Christmas to all, and to all a good-night."

Data deck for December 21–December 27

Date

Indicator

Period

December 23

New Home Sales

November

December 24

Durable Goods Orders

November

December 24

Core Capex Orders

November

December 26

Initial Jobless Claims

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Andrew Chan, CAIA, Portfolio Strategist
About the Author
Andrew Chan, CAIA, Portfolio Strategist
Mr. Chan serves on the investment team and is responsible for conducting investment manager research and portfolio construction. As a member of the investment committee, he provides market commentary and investment insights. Mr. Chan’s responsibilities include overseeing client portfolios, calculating risk metrics, conducting the rebalancing of client portfolios, and evaluating the selection of new investment managers. With over 10 years of wealth management experience, Mr. Chan has played key roles across various aspects of investment and wealth management. Prior to joining First Foundation Advisors, Mr. Chan was most recently a portfolio manager at U.S. Trust where, in addition to his daily responsibilities, he served on numerous internal committees including the investment manager committee, the portfolio model committee, and the strategic technology committee. He also served on the in-house strategic consultant committee reporting directly to the President of U.S. Trust. Mr. Chan is a graduate of the Wharton School Executive Program on Investment Management and holds a Bachelor of Arts degree in Business Administration from the University of California, Riverside. He is a Chartered Alternative Investment Analyst (CAIA). Mr. Chan serves on the executive board for CAIA Los Angeles and is the Interim President for the association. Read more