ECB: A cut for credibility
At its monetary policy meeting on the 6 June, the European Central Bank (ECB) cut its key interest rates by 25 basis points (bps). The rate cut was broadly signalled by the central bank and widely expected by investors.
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At its monetary policy meeting on the 6 June, the European Central Bank (ECB) cut its key interest rates by 25 basis points (bps). The rate cut was broadly signalled by the central bank and widely expected by investors.
Singapore and HK interest rates have moved sharply higher over the past few years, abetted by a high correlation with US monetary policy. However, they have echoed rather than mirrored the upward trend in US interest rates.
Falling inflation across APAC has raised expectations of rapid central bank rate cuts to boost flagging domestic growth – however APAC central banks appear reluctant to diverge from the Fed.
With US inflation finally trending downwards, the Federal Reserve (Fed) has pivoted to a more dovish bias, although the timing and extent of future rate cuts remains uncertain. Across the Asia-Pacific (APAC) region, inflation is also declining, raising the prospect of lower regional interest rates. However, the impact will likely be more variable due to country-specific nuances.
With Q1 '24 underway, Kyongsoo Noh answers the top five questions on the minds of liquidity investors.
At its first monetary policy meeting of 2024, the RBA left its OCR unchanged at 4.35%. The decision was in-line with market expectations, although the tone of the accompanying statement was more hawkish than expected.
The BoE held the Bank Rate steady at 5.25% for the fourth consecutive meeting but removed their bias towards the next move being another hike in rates. Notably, the decision was not unanimous as two members continued to vote for a 25 basis point (bp) hike, while one member voted for a 25bp cut leaving six members, including the Governor voting for unchanged rates.
On 29th January, the Monetary Authority of Singapore (MAS) decided to maintain the prevailing rate of appreciation of the S$NEER policy band, with no change to its width nor centre point.
At its first monetary policy meeting of the year on 25 January 2024, the European Central Bank (ECB) kept all key interest rates on hold. This was the third consecutive meeting to conclude with no change to monetary policy, with the last rate hike occurring in September 2023.
BOE voted to maintain Bank rate at 5.25% (6:3 split for hike) again. The Panel maintained its guidance that rates would need to be “sufficiently restrictive for sufficiently long” to curb inflation.
At its monetary policy meeting on 14th December 2023, the European Central Bank (ECB) kept all key interest rates on hold, for a second consecutive meeting. The ECB announced that reinvestments of the Pandemic Emergency Purchase Program (PEPP), will decrease by 50% from July 2024. President Lagarde stated that the Governing Council (GC), will not let its guard down, in the fight against inflation.
The Federal Open Market Committee (FOMC) left the federal funds target range unchanged at 5.25-5.50%, as anticipated. However, the quarterly update for the Summary of Economic Projections (SEP) suggested a dovish bias, with the “dots” pointing towards three cuts for next year, with a rate at the end of 2024 of 4.50-4.75%. The market reacted by increasing expectations for rate cuts in 2024, pricing in cuts more aggressively than the Fed.
When comparing short-term money market strategies with step out strategies such as standard money market or ultra-short duration bond strategies, it’s important to consider the future total return potential rather than just today’s yield.
At their last monetary policy meeting of the year on 5 December, the Reserve Bank of Australia (RBA) left the Overnight Cash Rate (OCR) unchanged at 4.35%. This was in line with market expectations.
Market attention has veered towards other policy options that are at the disposal of the ECB’s Governing Council (GC). One such option, the remuneration of Minimum Reserve Requirements (MRR), has recently come under particular focus. While not widely understood, adjustments to this rate could have significant implications for short term interest rates and liquidity demand.
At its monetary policy meeting on the 7 November, the Reserve Bank of Australia (RBA) decided to raise the Overnight Cash Rate (OCR) by 25bps to a 12-year high of 4.35%. The rate hike, which follows a five-month hiatus was widely anticipated by economists following stronger than expected economic data.
At its November Monetary Policy Committee meeting, the BoE voted to maintain the Bank Rate at 5.25%. The BoE’s Governor Andrew Bailey noted that inflation has fallen, and is expected to fall further this year and next year, while monetary policy is viewed as restrictive.
At its monetary policy meeting on 26 October 2023, the European Central Bank (ECB) kept all key interest rates on hold, the first pause after 10 consecutive rate rises.
At its semi-annual monetary policy meeting on 13 October, the MAS decided to maintain its prevailing monetary policy stance Fig 1a for a second meeting - following five previous upward adjustments. The decision was In-line with expectations, with the central bank leaving the slope, band width, and mid-point of SGD NEER unchanged.
At Michele Bullock’s first monetary policy meeting as the Governor, the Reserve Bank of Australia (RBA) decided to leave the Overnight Cash Rate unchanged at 4.10%. This was the fourth pause in the central bank’s rate hiking cycle.
The FOMC unanimously decided to make no changes to the 5.25%-5.50% federal funds target range. Interest on reserve balances (IORB) and the overnight reverse repurchase agreement (RRP) rate were also left unchanged at 5.40% and 5.30%, respectively
The rise in interest rates over the last two years has been dramatic. UK interest rates have risen at the sharpest pace since the 1980s, while rates in Europe have rapidly increased from negative territory to the highest level since the inception of the euro. Evidently, this sharp rise in rates is good news for corporate treasurers.
At its September 2023 meeting, the Monetary Policy Committee (MPC) maintained Bank Rate at 5.25% in a split 5-4 decision, while unanimously deciding to reduce the stock of UK government bond purchases by £100 billion over the next twelve months.
At its monetary policy meeting on 14 September 2023, the European Central Bank (ECB) tightened monetary policy further, increasing key interest rates by 25 basis points (bps).
For the past three decades, the property sector has been a key driver of Chinese economic growth. While the recent property downturn in China has created challenges for the banks’ operating environment, the banks’ credit profiles likely remain resilient in the future.
On 14 September 2023, the People’s Bank of China (PBoC) announced a broad based 25bps Reserve Requirement Ratio (RRR) rate cut. The timing and the shortness of the notice period was unexpected.
At Governor Lowe’s last monetary policy meeting as head of the RBA, the bank decided to leave the Overnight Cash Rate unchanged at 4.10%. This was widely expected by economists following slightly softer economic data and a recent decline in monthly inflation.
On 15 August 2023, the People’s Bank of China cut its 1-year Medium Term Lending Facility by 0.15% to 2.50% and its 7-day open market operation repo rate by 10bps to 1.80%.
On August 1, 2023 Fitch downgraded the United States of America’s long-term credit rating one notch, from AAA to AA+.
The Bank of England (BoE) opted to raise Bank Rate by 25 basis points (bps) to 5.25%, as a recent cooling in both inflation and the economic outlook allowed it to moderate the magnitude of its hike from the 50bps delivered in June.
At its monetary policy meeting on 1 August 2023, the Reserve Bank of Australia decided to leave the Overnight Cash Rate unchanged for a second month. This follows a cumulative 400bps of rate hikes over the previous fifteen months, which has taken base rates to a decade high of 4.10%.
At its monetary policy meeting on 27 July 2023, the European Central Bank (ECB) tightened monetary policy further, increasing key interest rates by 25 basis points (bps).
The Federal Open Market Committee (FOMC) unanimously voted to raise interest rates 25bps. The new target range is 5.25%-5.50%—the highest level in more than 22 years—yet we may not have reached the peak.
On 20 July 2023, the European Commission published its report to the Council and the European Parliament on the adequacy of the European Union Money Market Fund Regulation.
On 12 July 2023, the US Securities and Exchange Commission (SEC) announced amendments to its rules governing money market funds (MMFs). The new rules will lead to changes for US domiciled MMFs, as well as specific changes impacting institutional (prime and tax exempt) MMFs, and government, Treasury and retail MMFs.
At its monetary policy meeting on the 4th of July, the Reserve Bank of Australia left the overnight cash rate unchanged at 4.10%. This represents the second pause in the central bank’s current hiking cycle.
In a widely anticipated move, the Peoples Bank of China cut its 1-year Medium-Term Lending Facility by 10bps to 2.65% on the 15th of June. The action follows a 7-day Repo cut and a Standing Lending Facility rate cut last week and highlights the central bank’s decisively dovish pivot as the authorities seek to stabilize China’s faltering economic recovery.
At its 13th June Open Market Operation, the People’s Bank of China (PBoC) cut its 7-day Reverse Repo Rate by 10bps to 1.90%. The repo rate is a key tool used by the central bank to ensure adequate market liquidity, this also represents the first repo rate cut since August 2022.
At its monetary policy meeting on May 3, the Reserve Bank of Australia (RBA) surprised the market by hiking its Overnight Cash Rate by 25bps to 3.85%. Justifying its abrupt volte-face, the central bank said “inflation… is still too high and it will be some time yet before it is back in the target range”.
Following its semi-annual monetary policy meeting on April 14, the Monetary Authority of Singapore (MAS) left its prevailing monetary policy unchanged – including the slope, width and center-point of the band – unchanged. This represents the central bank’s first pause since it began tightening its policy in October 2021.
On 4 April, the Reserve bank of Australia (RBA) decided to leave the Overnight Cash Rate unchanged at 3.60%. This represents the first pause by a major central bank and follows a cumulative 350bps of hikes over the past ten consecutive meetings.
On Friday 17th March, the People’s Bank of China (PBOC) announced a broad-based 25bps Reserve Requirement Ratio (RRR) rate cut, releasing additional liquidity into the banking system and reducing commercial bank funding costs.
The European Central Bank (ECB) acted on February’s forward guidance by increasing key interest rates by 50 basis points (bps), despite current market volatility.
At its monetary policy meeting on the 7th of March, the Reserve Bank of Australia (RBA) hiked its Overnight Cash Rate by 25bps to an eleven-year high of 3.60%. The rate hike was widely anticipated following last month’s hawkish pivot.
The HKMA intervened to defend the peg and purchased HKD 19bn on February 14-15. This has reduced its aggregate balance to HKD 77bn, the lowest level in almost three years.
At its first monetary policy meeting of 2023, the Reserve Bank of Australia (RBA) raised its Overnight Cash Rate by 25bps to 3.35%. The move represents the ninth consecutive hike in the current cycle, and the accompanying statement was more hawkish than expected.
The European Central Bank raised its key interest rates by 50 basis points, in line with expectations to a 15-year high of 3.00%. In the accompanying statement and subsequent press conference, the ECB maintained its hawkish tone, signalled an intention to increase rates by a further 50 bps in March.
The Bank of England raised the Bank Rate by 50 basis points to 4.00% in a split 7-2 vote as a tight labour market and continued domestic wage and price pressures justified a tenth consecutive increase.
At their final monetary policy meeting of 2022, the Reserve Bank of Australia raised its Overnight Cash Rate by 25bps to a decade high of 3.10%.
On Friday 25 November, the People’s Bank of China announced a 25bps Reserve Requirement Ratio cut. In the accompanying statement, the PBoC confirmed the RRR cut was part of a package of measures to support economic growth.
After a series of jumbo rate hikes, it appears most investors are anticipating a pivot from the US Federal Reserve. However, the elevated level of inflation and resilience of the economy mean that rate cuts are unlikely for some time.
At its monetary policy meeting on 1 November, the RBA raised the Overnight Cash Rate by 25bps to 2.85%. This was the seventh hike in the current cycle, taking base rates to a nine-year high.
At its semi-annual monetary policy meeting on 14 October, the MAS re-centered the mid-point of the S$NEER up to its prevailing level – approximately a 2% increase – while keeping the slope and width of the policy band unchanged.
At its monetary policy meeting on 4 of October, the Reserve Bank of Australia raised its Overnight Cash Rate by 25 basis points to 2.60%
The Bank of England raised the Bank Rate by 50 basis points to 2.25% in a split 5-3-1 vote as the tight labour market, higher wages and higher domestic inflation justified a seventh consecutive hike.
The front-loading of rate hikes and belief that inflation is expected to peak later this year and then decline back towards the 2–3% range does suggest that the RBA may have reached peak hawkishness.
The recent, aggressive Fed interest rate tightening policy, combined with Hong Kong’s weak economic outlook, moribund Chinese growth and subdued local market sentiment, has pushed the HKD towards the weak side of its convertibility. The HIBOR-LIBOR spread has also widened the most since 2019.
On August 15, the People’s Bank of China announced a MLF rate cut of 10bps to 2.75%. Although small in size, the rate cut confirms the PBOC’s desire to jump-start the economy and sends an important monetary policy signal with significant implications for interest rates and RMB cash investors.
On July 27, the Federal Open Market Committee (FOMC) raised its Federal Funds Rate target range by 75 basis points (bps) to 2.25% - 2.50%. There were no dissenters.
On July 14, the MAS announced it would tighten monetary policy by re-centering the S$NEER policy band upwards. While the timing of the MAS statement was a surprise, the market was expecting further policy actions.
At its monetary policy meeting on July 5, the RBA hiked its overnight cash rate by 50bps to 1.35%. This was also the third rate hike in the current cycle, and the first time ever the central bank has executed back-to-back 50bps hikes, reinforcing its inflation fighting credentials.
On June 7, the RBA surprised the market by raising the Overnight Cash Rate by 50bps to 0.85%. This is the second rate hike in the current cycle, following a 25bps move in early May. The size of the rate hike also affirms the RBA’s desire to get ahead of the inflation fighting curve.
The RBA hiked its Overnight Cash Rate for the first time in over a decade at its 3rd May monetary policy meeting. The hike was more hawkish than expected.
At its semi-annual policy meeting on 14 April, the MAS announced its decision to further tighten monetary policy. The announcement and upward revision to the MAS's growth and inflation outlook will have important implications for Singapore interest rates and cash investment opportunities.
At its monetary policy meeting on Tuesday 5th of April, the RBA left base rates unchanged at a record low of 0.1% whilst acknowledged that “inflation has picked up and a further increase is expected” in the accompanying comments. Its hawkish tilt and giving a clear hint to potential rate rises in the coming months.
On 15-16 March, the Federal Open Market Committee (FOMC) held its two-day meeting and raised its federal funds rate target range by 25 basis points (bps) to 0.25%-0.5%, with one dissenting member calling for a 50bps increase.
At their first monetary policy meeting of 2022, the RBA acknowledged that the economy “remains resilient” despite the recent Omicron outbreak which has not derailed the recovery.
Singapore’s de-facto central bank hiked the slope of the S$NEER policy band, increasing the pace of appreciation. The unexpected hike was triggered by the strong inflation uptrend in recent days as well as a reassessment of Singapore’s growth and inflation expectations in 2022 by the MAS.
On December 7, the PBoC announced an unexpected 50bps Reserve Requirement Ratio (RRR) cut. The broad based cut will release significant liquidity into the financial system, while the resultant confirmation that policymakers are focused on stabilizing growth has boosted investor sentiment. CNY cash investors should pay attention to the PBoC’s rapid pivot from neutral to dovish monetary policy and the implications.
Rising inflation concerns are amplifying developed market rate hike expectations; in contrast APAC central banks have benefitted from more muted CPI. The rationale for this difference has important implications for investors.
During October, the yield on the RBA’s yield curve control (YCC) target reference bond spiraled upwards and closed at 0.775%, well beyond the central bank’s 0.10% target. This was an unexpected reversal for a bond which was historically very stable with minimal central bank interventions, since the RBA first introduced the YCC program in March 2020.
At its semi-annual monetary policy meeting, the Monetary Authority of Singapore surprised the market by raising slightly the slope of the S$NEER policy band, from zero percent previously.
The RBA announced its first tentative step towards tapering and eventual policy normalization.
In June 2021, the People’s Bank of China (PBoC) announced changes to commercial banks’ mechanism for setting the time deposit ceiling from a multiplier method to a basis points method.
On 9 July 2021, the PBoC announced a 50bps RRR cut that will reduce bank funding costs and unleash a substantial quantity of liquidity support. The size of the rate cut surprised the market and confirmed the authority’s dovish pivot.
Investing in professional sports leagues and related businesses. As rules around private equity ownership of sports leagues expand, we review team valuations and profitability, emerging sports categories, streaming and broadcast revenues, the decline of regional sports networks, drivers and comparisons of league parity, relegation and financial pressures in the English Premier League, stadium subsidies, sports betting and other adjacent businesses, antitrust issues, the esports winter, the worst teams that money can buy and the best basketball players of all time.
An update on the COVID-19 crisis as the US prepares to reopen despite having one of the highest infection rates in the world. Additional topics: monoclonal antibodies and anti-viral trials; the growing gap between markets and the economy; S&P 500 earnings haves and have-nots; regional equity performance (Europe loses again) and leveraged loans at a time of rising bankruptcies.
With spring planting season having arrived in Zone 7, it’s a good time to review agriculture from an investor’s perspective. Topics include agricultural price inflation in the wake of Russia’s invasion of Ukraine; public and private equity investments in agriculture, farmland ownership and the drivers of farmland returns; seed bio-engineering designed to reduce consumption of fertilizer, fungicide and water; and some satellite data on the immense agricultural damage occurring in Gaza and Israel. The Appendix addresses the avian flu’s impact on agriculture and the food supply.
Cicadian Rhythms: the fading prospects of a US disinflationary boom; Japan’s structural reform/M&A emergence; and Eye on the Market mailbag responses to questions on Tesla/Musk, GLPs, housing, China, Truth Social and Meta’s latest open source model
The Good, the Bad and the Ugly: on tech valuations, AI, energy and US politics Last week I spoke to the firm’s tech CEO clients at a conference in Montana. This note is a partial summary of that presentation, entitled “The Good, the Bad and the Ugly: an investor lens on tech valuations, AI, energy and the US Presidential Election”.
Electravision. The predominant vision for the future involves the electrification of everything, powered by solar, wind, transmission and distributed energy storage. This vision primarily relies upon the greater efficiency of electric motors and heat pumps vs their fossil fuel counterparts. While the grid is getting greener, electrification is advancing at a much slower pace for reasons related to chemistry, physics, cost, politics and human behavior. Our 14th annual energy paper takes a closer look, and also includes sections on nuclear power, China, hydrogen, “net zero oil” and Gaza’s energy future.
Five Easy Pieces: on Magnificent 7 stocks, open source large language models, the No Labels movement, the Armageddonists and bottom-fishing in Chinese equities.
This Eye on the Market is about all the things that can be true at the same time. The collapse of the political middle in Congress should not be an excuse for everyone else to abandon the ability to believe things that may appear contradictory, but which are all part of a more complicated reality.
Tracking the rebirth of the US consumer with real time data as a function of infection levels and state policy. Additional topics: no evidence yet of material second waves of COVID infection, and a round-up of the latest news on vaccine trials (Moderna, Oxford, Sinovac) and anticoagulants.
Falling US inflation and possible Fed easing are increasing talk of a soft landing rather than a hard landing and bear market. Our 2024 Outlook takes a closer look at equities, fixed income, China, Japan, antitrust, weight loss drugs and ten surprises for 2024.
A review on industry returns in private equity, venture capital, hedge funds, commercial real estate, infrastructure and private credit
Six questions and answers on the intersection between geopolitics, US politics and financial markets
A comparison of NYC to 21 other US cities with respect to urban recovery, commercial real estate, mass transit, crime, outmigration, work-from-home trends, tax rates, economic pulse, fiscal health, unfunded pensions, energy prices, industry diversification and competitiveness.
I asked Chat GPT-4 questions on economics, markets, energy and politics that my analysts and I worked on over the last two years. This piece reviews the results, along with the latest achievements and stumbles of generative AI models in the real world, and comments on the changing relationship between innovation, productivity and employment. The bottom line: a large language model can process reams of text very efficiently, and that’s what it’s made for. But it cannot think or reason; it’s just something I paid for. Upfront, a few comments on oil prices.
Global Resilience to higher rates
The impact of underperforming 2020 and 2021 US IPOs
Comments on mega-cap stocks and artificial intelligence. Then, it’s time for some of my unsolicited letters to Barron’s, MSNBC, “No Labels”, FHFA and more.
Time to retire the US/Emerging Markets barbell for a while
Oh, The Places We Could Go: on the US dollar, reserve currencies and the South China Morning Post
Frankenstein’s Monster: banking system deposits and the unintended fallout from the Fed’s monetary experiment; commercial real estate, regional banks and the COVID occupancy shock; the wipeout of Credit Suisse contingent convertible securities; a market and economic update; and an update on San Francisco, which has experienced the weakest post-COVID recovery of any major city in North America.
Renewables are growing but don’t always behave the way you want them to.
One of these things is not like the other, and that thing is Silicon Valley Bank.
US economy stays warm, large language model battles get hot
The Federal debt and how the Visigoths may try to break the system if no one fixes it.
The End of the Affair. The affair with market catalysts of the last decade is over now, and a new era of investing begins. A look at a world of higher inflation, more regionalized trade and investment and more capital scarcity.
A discussion of the YUCs, the MUCs, FTX and three rules for investors: the Gensler Rule, the Sirens Rule and the Summers Rule. Our 2023 Outlook will be released as usual on January 1st.
A preliminary read on midterm election results given the context of prevailing market and economic conditions.
My list of things I am thankful for this year: CH4, HR4346 and mRNA-1273. Of course, your mileage may vary.
Three reruns for investors. First, in almost every post-war bear market, equity declines preceded the fall in earnings, growth and employment. As a result, we’re more focused on changes in manufacturing surveys than on the other victims of a recession as a sign of the bottom. Second, Graham Allison’s rising power conflict analysis and its historical precedents come back into focus with the latest US policies cutting off high performance semiconductor exports to China. Third, another press article on a small country as a prototype for a renewable future that does not address its irrelevance for larger developed or developing economies.
Three topics this week: the repricing of risky credit, labor markets and a COVID recap. While equities are pricing in a much greater probability of recession now, the credit markets are just getting started. One canary in the coal mine: the Citrix financing, which will be followed by a string of even weaker credits. On labor markets, the Fed is facing the tightest labor supply conditions in decades. Can second chance policies easing the path to employment for people with criminal arrest records help increase the labor supply, or will the Fed have to crush the economy to restore desired levels of wage and price inflation? Lastly, an update on bivalent vaccines and inhalable vaccines, as the latter offers the best chance of actually reducing infection and transmission.
Three topics in this month’s Eye on the Market. First, an update on the Fed, inflation and corporate profits since we believe the June equity market lows may be retested in the fall. Second, a detailed look at what would have to happen for the climate bill’s projected GHG savings to actually occur; the answer matters given the implications for the US natural gas industry. And finally, will all the new IRS agents really stick to auditing taxpayers above $400k? Data from the GAO suggests there may not be enough of them to meet the Administration’s revenue targets.
The global supply chain mess will require increased vaccination and acquired immunity, semiconductor capacity expansion and the end of extraordinary housing/labor supports to resolve. A close look at some very anomalous charts on shipping, semiconductors, inventories, labor shortages, foreclosures and mortality.
Greetings students. We look forward to seeing you back on campus. Your Fall 2021 syllabus is attached. Syllabus update: Biology BI66 “The Origins of COVID” has been cancelled until further notice.
Red Med Redemption: A visual depiction of politics, ideology, vaccine resistance and the Delta variant. Other topics: US economic recovery update, and big tech reliance on acquisitions to fuel growth at a time of rising anti-trust enforcement. We conclude with a new “Investor Odds & Ends” section that covers NYC hotel/office markets and possible changes in personal, corporate and international tax rates.
COVID and the Delta variant; the Fed as firefighter and arsonist; US-China economic divorce picks up steam; and the pig-snake inflation timetable (how long until we know if there’s a permanent wage/price rise).
Every two years, we take a close look at the performance of the private equity industry given its rising share of institutional and individual portfolios. Our findings this year: the private equity industry is still outperforming public equity, but this outperformance narrowed as all markets benefit from non-stop monetary and fiscal stimulus, and as private equity acquisition multiples rise. We examine manager dispersion, benchmarks, co-investing, GP-led secondary funds, the torrid pace of industry fundraising and manager fees in this year’s piece.
The election as referendum on America: how well does the “system” work, and for whom?
The US recovery; The flood of money and market returns; Globalization lives; Reducing COVID mortality through vascular treatments; Realistic timetables for never-been-done before vaccines; Sweden’s COVID experiment is not what you think
In this week’s Eye on the Market, we review topics from our recent client Zoom calls. Topics include: risk of inflation, second waves of infection, the effectiveness of lockdowns and Biden’s taxation and spending agenda.
In this week’s note, we discuss the latest news on US infection trends and reopening plans, Remdesivir trial results and whether US fiscal stimulus is “enough”.
Lockdown relaxation and economic reawakening…are we there yet?
In this week's note, we take a close look at country and regional virus data, and examine the pitfalls of over-extrapolating trends that often reverse.
After the equity rally, P/E multiples are back at around 16x 2021 consensus earnings.
Virus trends and head-fakes, convalescent plasma and U.S. vs. China lockdowns.
There are things the government can try and fix during a pandemic and other things which it can't.
There are some difficult days ahead as quarantines and lockdowns grow. I want to share something with you from John Stuart Mill as we head into the unknown.
A lot of data is being made available on the coronavirus, but most of it requires careful analysis before drawing conclusions.
Confounding almost every forecast we saw last week, Senator Biden appears to have emerged from Super Tuesday with a sizeable delegate lead. Why might the night have turned out so differently from what was expected just a few days ago?
A Coronavirus update: severity, consequences and implications for investors.
Consensus reactions to the Phase I US-China deal are very skeptical, but may be missing the broader point. A brief note on what happened, and the alternatives.
After a very positive year for investors in 2019, we expect lower positive returns on financial assets in 2020 as some Ghosts of Christmas Past reappear.
How a discussion about China and Hong Kong morphed into a chart war about Trump, Hoover, Taft, Rachel Maddow and Anderson Cooper.
While recessions and bear markets are a fact of life, something peculiar happened after the Global Financial Crisis: the rise of the Armageddonists.
A close look at the Progressive Agenda, China’s deteriorating welcome mat in DC and US Tech IPOs.
Michael Cembalest analyzes the performance of over 6,700 domestic and international active equity managers and discusses the challenges they face.
A brief comment on a proposal from leading Presidential candidates to ban hydraulic fracturing everywhere, immediately.
It was a long, hot summer at the Heritage Foundation. An update from the front lines of the Trade War.
Michael went on a search for Democratic Socialism in the real world, and ended up halfway around the globe from where he began.
Michael discusses how he should have taken Trump at his word on tariffs, and the impact of the widening trade war on global growth and equity markets as proposed tariffs approach pre-war levels.
The US-China trade war, prescription drug price legislation and the 2020 election.
Topics: unattainable objectives of the Green New Deal; overview of the world’s decarbonization challenges; Germany’s energy transition; Trump’s War on Science.
This paper discusses trade tensions and the recent tariff impositions on China, and the investment implications.
This paper, written by Kerry Craig, highlights the growing significance and potential risks of private credit markets in enhancing returns and diversification.
This paper summarizes the key highlights from the latest Federal Open Market Committee meeting. (3-min read)
This paper, written by Marcella Chow, highlights the divergence in central bank monetary policies and its investment implications.
In our 2024 Mid-Year Outlook, we address 10 frequently asked questions by investors in the region and beyond. We hope our insights can help you navigate the road ahead, on the way to your investment objectives.
This paper discusses the election results in India, and the investment implications of short-term valuation challenges and long-term positive prospects.
Using selective slides from the Guide to the Markets – Asia to examine the role of fixed income and how it will benefit investors by keeping it as a key investment objective.
This paper, written by Raisah Rasid and Jennifer Qiu, discusses why investors should take an active approach towards Asian equities in mitigating currency risks.
This paper, written by Dr. David Kelly and Jennifer Qiu, discusses investment implications of rising U.S. federal debt and widening deficits.
This paper discusses why U.S. 1Q24 earnings have been better than expected, and broadening profit growth should present opportunities outside of the Magnificent 7.
This paper discusses the broader outlook for inflation and the labor market, following the April jobs report in the U.S.
This paper summarizes the key highlights from the latest Federal Open Market Committee meeting. (3-min read)
This paper, written by Marcella Chow, discusses the recent surges in gold and copper, and why commodity strategies can help protect portfolios when both stocks and bonds are correcting.
This paper discusses the expected delay in the Federal Reserve's rate cut cycle, and when the current wave of volatility could eventually subside.
This paper addresses the latest Chinese economic data and the factors that may contribute to China markets trending higher.
This paper discusses the relative valuation of European equities, and the factors that could suggest a more constructive outlook for the region's equity market.
This paper, written by Kerry Craig, addresses the current performance and outlook of private equity market with subdued exit activity.
This paper, written by Tai Hui, addresses why policy easing amid a soft landing backdrop should be positive for both equities and fixed income.
Insights on the 2024 U.S. general election, potential election outcomes, policy agendas and investment implications to help investors navigate the election cycle in portfolios.
This paper summarizes the key highlights from the latest Federal Open Market Committee meeting. (3-min read)
This paper addresses why strong and consistent earnings growth, structural reforms and the likelihood of political continuity further enhances India's appeal in spite of rich valuations.
This paper, written by Tai Hui and Adrian Tong, discusses the key highlights of the Bank of Japan's March monetary policy meeting and what it means for the economy.
This paper discusses the macro factors in emerging markets that can drive a potential market rally once the Fed starts to cut and the U.S. dollar turns.
This paper summarizes the key objectives set out in the government work report at China’s National People’s Congress, which were broadly in line with expectations.
With monetary policy still at the forefront of the macro landscape in 2024, investors are left wondering how the election might influence Fed policymakers.
Continued demand for AI technologies from mega-cap companies should benefit Asian exporters that are involved in the regional tech supply chains.
This paper, written by Tai Hui discusses why Japanese equities could remain strong despite the potential tightening in monetary policy.
This paper, written by Meera Pandit and Jennifer Qiu, discusses how quality balance sheets and margins continue to support U.S. large caps in spite of favorable small cap valuations.
The Solving for Income presentation uses selective slides from the Guide to the Markets – Asia to examine the role of income and how it will benefit investors by keeping it as a key investment objective.
While recession risks in the US have receded, geopolitical risk, election risk and restrictive monetary policy all threaten the current rally.
Our principle six time-tested strategies for guiding investors and their portfolios through today's challenging markets to reach tomorrow's goals.
This paper, written by Meera Pandit, Nimish Vyas and Stephanie Aliaga, discusses the 4Q23 U.S. earnings and what it means for the Magnificent 7 and the broader markets.
This paper, written by Tai Hui and Jennifer Qiu, addresses the history of monetary easing and our expectations of Fed policy in 2024. (6-minute read)
This paper, written by Raisah Rasid, discusses the expected weakening of the U.S. dollar and the inflation deceleration in Asia, which presents an opportunity in Asia fixed income
International equities are likely to benefit this year from positive structural changes, a weaker dollar, and exciting governance changes.
Presidential elections always add an extra element of uncertainty to investing, and after a halcyon 2023 in equity markets, could come as a shock to investors. On top of assessing the path of the Federal Reserve, the stability of profits and the consumer, and navigating economic resilience vs. recession, investors will have to grapple with the barrage of headlines about the 2024 election.
This paper, written by Chaoping Zhu, discusses the recent Chinese economic data releases and the investment implications.
Although investors may be tempted to invest based on who they think will win the election and how certain policies may be implemented, macro forces often dwarf policy agendas when it comes to sector performance.
This paper, written by Marcella Chow and Adrian Tong, discusses the outlook for Asia high dividend equities in 2024.
Many investors wonder if they can tweak their existing exposures to be either more defensive against volatility or more opportunistic if certain sectors face future policy tailwinds.
This paper, written by Tai Hui, summarizes the factors that could trigger rate cuts and policy outlook with its investment implications. (3-minute read)
This paper summarizes the key highlights from the latest Federal Open Market Committee meeting. (3-min read)
This paper, written by Tilmann Galler and Natasha May, discusses the outlook of small cap stocks and the investment implications.
This paper, written by Chaoping Zhu and Marcella Chow, discusses the outlook of China and policy implications.
This paper, written by Raisah Rasid and Adrian Tong, discusses the outlook of Asia tech and the investment implications.
Coming into 2023, the rallying cry from the asset management community was “Bonds are Back! ”. There were several reasonable assumptions behind this call.
This paper, written by Tai Hui and Meera Pandit, summarizes the potential underlying market and policy implications of 2024 U.S. elections. (3-minute read)
This paper, written by Adrian Tong and Jennifer Qiu, summarizes the recent key central banks' decisions and their implication on asset allocation. (3-minute read)
This paper summarizes the key highlights from the latest Federal Open Market Committee meeting. (3-min read)
This paper, written by Marcella Chow and Adrian Tong, highlights the recent performance of Asia high dividend equities and the factors influencing its outlook with investment implications. (3-minute read)
This paper, written by Raisah Rasid and Adrian Tong, discusses the outlook for Asian assets in the current global yield environment. (3-minute read)
This paper, written by Meera Pandit and Nimish Vyas, discusses our projections for the 3Q23 U.S. earnings season and the investment implications.
This paper, written by Tai Hui, discusses the factors driving oil prices and the Fed policy outlook.
After well over a year of anxiously anticipating an economic recession, the U.S. economy continues to look sound. However, as we enter the “fall of worry” there are several risks on the horizon this autumn: impacts from the UAW strike, rising oil prices, the resumption of student loan payments, and the potential for a government shutdown.
This paper, written by Tai Hui, summarizes the latest round of central bank meetings and discusses outlook for U.S., UK and European economy with its investment implications. (3-minute read)
This paper summarizes the key highlights from the latest Federal Open Market Committee meeting. (3-min read)
This paper, written by Adrian Tong, highlights the driving forces and outlook of oil, food and metal prices, with their implications on policy and growth. (3-minute read)
This paper, written by Jordan Jackson, discusses the outlook for inflation, Fed policy and real rates, as well as the investment implications.
This paper, written by Marcella Chow and Adrian Tong, addresses the key drivers and outlook of Asian domestic demand with its investment implications.
This paper, written by Jennifer Qiu and Adrian Tong, discusses the risks of corporate caution in the U.S. and the impact on the Asia tech sector.
This paper, written by David Lebovitz and Kerry Craig, discusses outlook for real assets, especially in the office space.
This paper, written by Tai Hui, discusses China's property market, deflation risk and the investment implications.
This paper, written by Jordan Jackson, discusses the recent rise in U.S. 10-year Treasury yield and the investment implications.
This paper, written by Chaoping Zhu, Marcella Chow and Jennifer Qiu, discusses the recent China activity data and the investment implications.
This paper, written by Karen Ward and Hugh Gimber, discusses sustainable investing returns performance and ongoing shifts in the landscape.
This paper, written by Tai Hui, discusses the state of the U.S. economy and the investment implications on fixed income.
This paper, written by Kerry Craig, summarizes the previous highlights and upcoming outlook for central banks' meetings with investment implications.
This paper summarizes the key highlights from the latest Federal Open Market Committee meeting. (3-min read)
This paper, written by Tai Hui, discusses the outlook for India equities and the investment implications.
This paper, written by Meera Pandit and Nimish Vyas, discusses the recent U.S. equity market performance, earnings outlook and the investment implications.
This paper, written by Chaoping Zhu, discusses the inflation outlook for China, policy expectations and the investment implications.