Tools and resources necessary to help you make informed investment decisions and build stronger portfolios
Chinese monetary policy is rapidly evolving and there was some changes today following the recent virus outbreak in Beijing. So I though it prudent to reword the final two paragraphs to better account for this. The rest of the blog and the graphs are unchanged.
We examine how ZIRP works, its impacts, likely timeframe, whether we expect rates to go negative (spoiler: we don’t) and options available to liquidity investors.
Our investment team navigated through the recent market volatility and, with the help of our clients, weathered through the market storm.
Hear how Global Liquidity stayed steadfast in our commitment to clients over the past two months.
Libor spreads are elevated, indicating cheapness in the funding markets, but we expect them to normalize in the near to medium term.
Learn from Global Liquidity Portfolio Manager, Aidan Shevlin, about latest monetary policies in Hong Kong and how that impacts HKD interest rates and investors.
Surging demand for U.S. Treasury bills (Tbills), in a “flight to quality” sparked by the coronavirus pandemic, created unusual market conditions.
Without support from central banks in the offshore space, Money Market Funds will likely be slow to get back up to full speed in purchases and duration, writes Olivia Maguire, Global Liquidity Portfolio Manager.
A new rule on calculating the supplementary leverage ratio—a capital adequacy measure—allows expanded balance sheets and potentially greater expansion of quantitative easing.
Olivia Maguire and Joe McConnell evaluate central bank reactions to COVID-19 in the UK and Europe.
Learn from Global Liquidity Portfolio Manager, Kyongsoo Noh, about key differences between the market environment today and 2008.
The Federal Reserve announced new programs on March 23, 2020. Learn from Global Liquidity Portfolio Manager, Kyongsoo Noh, on the latest facilities from the Fed.
Comments on the recent volatility and pace of monetary policy.
Making monetary policy: The Federal Reserve moves in the right direction
COVID-19 has the world on edge: What does this mean for short term fixed income, volatility and cash investing, cash policy.
Libor, the world’s most widely used benchmark for floating rate instruments, is transitioning SOFR.
We have extensive resiliency procedures in place to protect our employees, clients and businesses, ensuring we can continue to operate efficiently in times of stress.
The recent coronavirus (2019-nCoV) outbreak in China has increased investors’ trepidation and financial market uncertainty.
Read the latest review of Global Liquidity market and portfolio commentary across the Americas, Asia Pacific, as well as Europe and UK.
COVID temporarily reduced global CO2 emissions to 2006 levels. In our tenth annual energy paper, we examine when and how renewable energy transitions might result in more permanent reductions. We also analyze the financial, political and environmental risks to US energy independence, and whether stranded asset risk is the primary reason for the lowest oil and gas valuations in 90 years.
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
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.
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.
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.
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.
Michael Cembalest, Chairman of Market and Investment Strategy, has compiled his extensive research on coronavirus.
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.
Answers to questions on the coronavirus, US megacap stocks, the cost of Democratic Healthcare plans, the Iowa caucus and the problem with the student loan system.
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.
The food fight between the President and the Fed Chair could result in too much easing, and the expansion of valuations beyond sustainable levels.
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.
Due to COVID-19 and the discussions around social issues and climate change, Sustainable Investing (SI) is more relevant today than ever before.
The past few weeks have seen COVID-19 case growth accelerate in parts of the United States, with the total number of confirmed cases now well above 2.5 million.
Since the start of the year, the U.S. dollar has appreciated by roughly 1%, continuing a near-decade long trend that was only briefly interrupted in 2017.
One of the best trades to put on in the aftermath of the financial crisis was going long high yield. Spreads blew out to nearly 18% in November 2008, implying a default rate of almost 30%. Looking back, this is far from what actually materialized, as default rates on U.S. high yield peaked at a level of 11% in November of the following year. With the Federal Reserve (Fed) becoming increasingly active in credit markets, we have been getting more and more questions on the outlook for high yield; the bottom line is that while valuations are not terribly compelling, the near-term path for credit spreads may be tighter.
Over the past 15 years, investors have been frustrated with the performance of European equities.
At the end of last week, it looked like the equity market pullback that everyone had been expecting was finally beginning to materialize.
The Federal Open Market Committee (FOMC) met this week and provided investors with a fresh set of economic and interest rate projections after a six month hiatus.
While fundamentals– valuations, earnings and economic growth – dominate in the long run, the short run is a different matter.
Investors have had to process a torrent of information and wild swings in sentiment so far this year.
The spread of the coronavirus and its impact on global economic activity has materially changed the investment outlook for 2020. In this piece we provide a framework for tracking infection rates globally and monitoring the impact on economic activity.
The S&P 500 has marched steadily higher from its March 23rd low against a backdrop of investor skepticism. In previous posts, we have discussed how this rally is being driven by three things.
The balance sheet of the U.S. Federal Reserve (Fed) has increased by 2.9 trillion USD since the start of March, meaning that in just over eleven weeks it has grown more than it did in the five years following the Financial Crisis.
Global governments have been swift and bold in supporting their economies, building a bridge to get consumers, small businesses and corporates over the present abyss to the other side. Given the unknown breadth and depth of the abyss, more stimulus may be required.
Year-to-date, emerging market (EM) equities are down -17.6%, as a combination of the COVID-19 recession and the oil price shock has led to downward revisions to earnings expectations, as well as weaker currencies relative to the U.S. dollar.
Ultimately, the Fed’s next step will be dictated by the pathway of the virus, says Dryden.
Investors looking to the equity market for income should focus on sectors with healthy balance sheets and minimal exposure to the COVID downturn, says Lebovitz.
During the first three weeks of March, investors stampeded out of riskier markets and rushed to safe assets. In the process, 100 billion USD flowed out of emerging market (EM) stocks and bonds –more than three times the outflows seen during each of the previous three risk-off periods.
The next president will necessarily have a different policy agenda now given the events that have unfolded than he would have at the beginning of the year.
Infrastructure resiliency during the COVID-19 crisis
The first quarter earnings season, thus far, can be helpful in building expectations for how things may evolve during the rest of the year, says Lebovitz.
Global markets have roiled in the face of COVID-19 and social distancing, and many investors are looking to “pick up the pieces,” eagerly hunting for the next big opportunity.
While many changes are likely to emerge, one clear trend, with far-reaching macro and market implications, is the increase in leverage, says Azzarello.
Earlier this week, oil prices turned negative for the first time in history, with WTI trading as low as -$37 a barrel.
Over the past two months investors have digested the COVID-19 shock: the fast spread of the virus around the world, the social distancing measures implemented and the resulting economic and earnings recession.
1Q20 earnings season will provide an important first look at how the ongoing pause in global activity is impacting corporate earnings.
The industries most impacted by social distancing account for 20% of payroll employment, and consumer spending across those industries account for 20% of GDP.
With the equity market having hit its last new high on February 19th of this year, the depth and speed of the market drop has been ferocious.
Today’s objectively complicated credit market may be an excellent source of future portfolio growth, says Dryden.
The recent U.S. equity market drop and subsequent swings in prices have been dramatic.
Ultimately, how high the unemployment rate gets is dependent on one key question: will American small business fire its workers, says Manley.
Initial claims for unemployment insurance surged to the highest level ever: 3,283,000, spiking from a slightly revised 282,000 last week.
This paper, written by Dr. David Kelly, reviews the U.S> relief bill and its investment implications.
The U.S. Federal Reserve (Fed) has pulled out its alphabet bazooka in an effort to ensure sufficient liquidity and the smooth functioning of financial markets, while also providing credit to businesses that are affected by the spread of COVID-19 and the stall in global economic activity.
As economists continue to revise down their 2020 GDP estimates, a lot of clients have been asking us about the potential impact on earnings.
This past Sunday, the U.S. Federal Reserve (Fed) fired a last desperate salvo in an attempt to stabilize financial conditions, the second emergency inter-meeting cut in two weeks.
Coming into this year, we expected an improvement in global economic growth, as 2019’s policy uncertainty clouds dissipated.
The COVID-19 crisis confirms, once again, the value of a diversified portfolio, says David Kelly.
It is important to avoid trying to predict the future; rather, clients are best served by monitoring the present situation and maintaining composure.
There is not a clear answer. However, what we can provide perspective on, is where we are finding value, according to David Lebovitz.
Former Vice President Joe Biden made a surprise comeback during the Super Tuesday contests, paving the way for a two-person race to the Democratic nomination.
Even with this Fed action, there will likely be calls for fiscal action to support to businesses suffering from the response to virus fears, says David Kelly.
Sentiment, and valuations, are likely to keep markets relatively contained until there is clarity about the extent and length of the outbreak, says Tyler Voigt.
Equity investors spend a lot time looking for where earnings growth will be strong; what doesn't get as much attention is what happens after they're generated.
"Equity investors spend a lot time looking for where earnings growth will be strong; what doesn't get as much attention is what happens after they're generated."
Taken at face value, the fall in job openings is concerning and warrants careful monitoring.
AUM growth and focus by investors globally suggest interest and adoption of sustainable investing is unlikely to subside anytime soon, says Samantha Azzarello.
Investors should consider policies could impact markets and the economy after of the 2020 election.
Financial markets have fallen sharply on concerns of the coronavirus, a respiratory illness first identified in Wuhan, China, spreading globally.
Equity market valuations have risen substantially in recent months, with the forward P/E ratio of the S&P 500 now at a level of 18.6x.
Investors are now asking whether inflation could return, threatening the rally in financial markets.
Buying the dip - the coveted strategy (almost) all investors like to employ.
Rising geopolitical tensions with Iran have led to some fears over potential oil supply shocks out of the Middle East.
Rising geopolitical tensions with Iran have led to some fears over potential oil supply shocks out of the Middle East.
