In hindsight, it was obvious it wouldn’t last. Low interest rates — the result of shifts in the global economy, economic stability, low inflation and monetary policy — couldn’t stay at zero forever.
With all that extra intelligence, there will be a need and a desire to undertake many new projects, ranging from innovative theatrical productions to more efficient and densely packed solar panels. These new projects could also herald a world of much cheaper and greener energy, which would further increase humankind’s ability to manipulate the natural environment. Land will thus become more valuable.
The demise of a major bank illustrates the global tensions in the financial sector.
Beyond the near-term turmoil, there may need to be a re-evaluation of the regional banking model in the United States, according to a recent panel hosted by Stephen Dover, Head of Franklin Templeton Institute.
As we discussed last week in Looking to the Futures, natural gas prices have been plagued by the perfect storm of lower demand and higher production throughout the withdrawal season.
Six of eight indexes on our world watch list posted gains through March 27, 2023. France's CAC 40 finished in the top spot with a YTD gain of 9.34%. Germany's DAXK finished second with a YTD gain of 8.33%, and Tokyo's Nikkei 225 moved to third with a YTD gain of 5.30%. India's BSE SENSEX finished last with a loss of 5.24% YTD.
The Federal Reserve raised short-term interest rates by another quarter point on Wednesday.
The economic signals and a host of geopolitical risks confronting investors suggest that 2023 could be as challenging as 20022 for both stocks and bonds.
For all of you following the banking crises in the US and Europe, and asking why this is all happening again, I have bad news: Regardless of what laws are passed, or which regulations are issued, banking crises will recur — and not infrequently.
Review the latest Weekly Headings by CIO Larry Adam.
Stock and bond markets were shaken by the recent banking crisis in the US and Europe.
Recently I saw someone share a clip from their weather app. It said, “Rain expected at 3 pm,” right above a little graphic showing a 30% chance of rain at 3 pm. What’s wrong with that picture?
The U.S. dollar remains the world’s top reserve currency for now, though its share of global central banks’ official holdings has slipped in the past 20 years. By contrast, the yuan’s share of official holdings has more than doubled since 2016.
China’s economy is in the early stages of a gradual, consumer-led recovery. In this issue of Sinology, Andy Rothman outlines why China’s opportunities outweigh risks.
Following recent efforts by central banks and regulators to alleviate the banking crisis, Franklin Templeton Institute’s Stephen Dover and Lukasz Kalwak discuss their thoughts on the implications and outlook for the banking industries in the United States and Europe.
Yields on 10-Year Japanese Government Bonds have fallen by about a third over the past two weeks, as shown in the chart below.
To help understand the current market volatility arising from the collapse of banks in the United States and Europe, Head of Franklin Templeton Institute Stephen Dover provides his answers to three crucial questions.
Stocks fell and volatility rose this morning as banking sector worries persist.
The Federal Reserve raised interest rates by a quarter percentage point and signaled it’s not finished hiking, despite the risk of exacerbating a bank crisis that’s roiled global markets.
Both the leading indicators of growth and liquidity continue to suggest growth will slow as 2023 progresses.
Easing financial conditions globally have made Morgan Stanley “outright bullish” on growth stocks in Asia and emerging markets versus their value peers.
A Singapore-based fintech investment firm is close to raising $100 million to back finance and blockchain startups in China and Southeast Asia.
Some of the world’s biggest investors are looking beyond interest-rate hikes, bank failures and the threat of recession to one of the greatest fears of all money managers — missing out on the next big rally.
CIO Larry Adam outlines the positive events that are outweighing negative developments and looks at dynamics to focus on in the week ahead.
The simplest thing that can be said about current financial market and banking conditions is this: the unwinding of this Fed-induced, yield-seeking speculative bubble is proceeding as one would expect, and it’s not over by a longshot.
Chief Economist Eugenio J. Alemán discusses current economic conditions.
Steve Chiavarone doesn’t want to scare anyone, but what he remembers most from the last banking crisis was how sure most people were that it wouldn’t happen.
Markets have been trading as if the end of the world is at hand – but what most participants see, behind the recent financial turmoil and contagion fears, is a still-strong US economy, the MLIV Pulse survey shows.
Portfolio Manager Andy Acker explains why the healthcare sector could offer an attractive combination of defense and growth in today’s market.
UBS Group AG agreed to buy Credit Suisse Group AG in a historic, government-brokered deal aimed at containing a crisis of confidence that had started to spread across global financial markets.
Robust risk management is essential for fixed income investors. In his latest commentary, Marcus Moore explains why our sustainable investing team considers ESG factors as material business risks, similar to the traditional risks they also analyze.
Franklin Templeton Investment Solutions explores the shared macro concerns that set the stage for the recent banking crisis, its ripple effects on the broader economy and implications for multi-asset investing.
The strongest force standing in the way of nuclear energy is the antiquated, irrational fear of it.
Sixty-six million Americans currently receive monthly benefits from Social Security, which, if nothing changes, is expected to be insolvent by 2035 at the latest. It’s time for Americans to take a greater role in their own retirement planning.
The full story of SVB is still unfolding, but we offer some initial reactions.
Jamie Dimon and Janet Yellen were on a call Tuesday, when she floated an idea: What if the nation’s largest lenders deposited billions of dollars into First Republic Bank, the latest firm getting nudged toward the brink by a depositor panic
U.S. equities are lower as pressure has returned to the banking sector, which remains top of mind.
The market gyrations are not rooted in a banking crisis, but in financial cracks from rapid rate hikes.
Portfolio manager Peeyush Mittal and research analyst Swagato Ghosh say India has a fiscal playbook to chart a path of stability and growth.
Implications of SVB and Credit Suisse on the European banking sector—check out highlights from our recent panel discussion with Kim Catechis, Investment Strategist with the Franklin Templeton Institute.
Treasury Secretary Janet Yellen told Congress on Thursday that the US banking system remains sound, seeking to reassure lawmakers, depositors and investors amid concerns about how the sector is regulated.
Financial market volatility has followed the collapse of Silicon Valley Bank. Stephen Dover, Head of Franklin Templeton Institute, shares his thoughts on possible implications outside the United States.
What our experts think about today's market action.
U.S. stocks are falling in pre-market trading as recent banking turmoil on this side of the pond made its way to Europe.
If marked to market, assets purchased during quantitative easing are in the red.
Government debt yields plunged globally as mounting financial-stability concerns prompted bond traders to abandon bets on additional central-bank rate hikes and begin pricing in cuts by the Federal Reserve.
101 Lesson of Structural growth versus recovery growth investing.
China can match the US in artificial intelligence thanks to the expertise of companies from Alibaba to Baidu, joining a global tech transformation that will dwarf the mobile revolution, according to industry pioneer Kai-Fu Lee.
Some of the world’s top money managers are sitting on a windfall after the collapse of Silicon Valley Bank spurred the biggest rally in US Treasuries since the early 1980s.
Senior Sovereign Analyst Jon Levy shares his analysis of the European Central Bank’s plans to unwind its largest quantitative policy measure, how it could affect markets and how it compares to previous policy changes.
Silicon Valley Bank became the biggest US lender to fail in more than a decade, creating fears of contagion in tech and finance sectors in the US and around the world.
Can India capitalize on supply chain realignment to build its manufacturing sector?
U.S. stocks are extending last week's sharp declines that have come amid worries regarding the ultimate impact on the banking sector of the recent collapses of SVB Financial and Silvergate Capital.
If a picture is worth a thousand words, this will be the “longest” letter I’ve sent you in a while, as there are quite a few pictures. It may also be the most wide-ranging.
Like face recognition, artificial intelligence (AI), mRNA vaccines and other modern technology, Bitcoin is a key component of the ongoing, rapidly accelerating digital transformation.
Review the latest portfolio strategy commentary from Mike Gibbs, managing director of Equity Portfolio and Technical Strategy.
U.S. equities are modestly higher in pre-market action following the February labor report that was only modestly above estimates.
Head of Portfolio Strategy David Dali explains why it’s an opportune time to add emerging-market exposure.
U.S. stocks are higher, paring weekly losses though the markets remain choppy following this week's hawkish Congressional testimony from Fed Chairman Jerome Powell.
Investors focusing on climate change often overlook Chinese firms.
The problem with speculation is that there’s usually a gap between the underlying risk and the inevitable outcome.
History shows a high risk of recession when central banks fight inflation.
Investors in emerging markets (EM) have endured a decade of poor performance. But things may be changing. Based on The Economist magazine’s data comparing hamburger prices across countries, many EM currencies look cheap today—as they did 20 years ago before an extended rally of EM stocks and bonds.
High-yield investors beware. Junk bonds that were financed at low, fixed rates will eventually mature and, according to Jeffrey Gundlach, weak issuers that cannot refinance at higher rates will default.
For decades since the end of the Cold War there have been very limited restrictions on foreign investments by US investors compared to those of other countries.
Junior debt issued by banks is normally one of the riskiest types of fixed-income in the US and Europe. It’s typically not backed by collateral and in the event of a crisis it only gets paid back after other bonds.
The planet’s billionaires are nearly $2 trillion poorer this year!
Alessio de Longis spent the last three months loading up on risk in his $1.1 billion Invesco Global Allocation Fund. Now, he’s winding down those positions and reversing course back to safety.
European stocks have outperformed this year as China’s economy restarts and the energy shock proved less severe than expected.
A revised approach to Northern Ireland will lower trade tensions in Europe.
US job growth probably moderated last month after a blistering January pace, while the unemployment rate likely held at a 53-year low, illustrating a labor market that’s proved mostly impervious to the Federal Reserve’s massive interest-rate hikes.
More women in senior roles will support the long-term success and sustainability of emerging markets.
With bonds and stocks once again falling in unison, cash is the ultimate refuge.
Lufthansa’s blockbuster report is just the latest signal that commercial aviation, one of the hardest-hit industries during the pandemic, may be ready to make a landing again in investors’ portfolios.
While the sanctions regime imposed on Russia has dented its economy, it is far less severe than those imposed on North Korea and Iran, which included penalties on third-party countries. Imposing secondary sanctions could tighten the screws on Putin, but also accelerate deglobalization.
Hedge funds and proprietary trading firms are beefing up agricultural markets expertise by hiring traders as big swings in prices have made even relatively niche corners of commodities trading lucrative during the past year.
Economic growth and inflation have surprised to the upside so far in 2023, not only thanks to the reopening of the Chinese economy, but also due to the resilience of the labour markets.
Markets this month were unable to build upon January's momentum following speculation that the central bank will continue with interest rate hikes.
Medical Properties Trust’s dividend at the 2022 rate of $1.16 is safe even if Prospect, its third-largest operator, does not pay a single cent in 2023.
Last week, I spoke at the Mississippi CFA Society’s annual forecasting event.
Maybe UFOs are carrying wealthy aliens wanting to buy a lot of stuff and boost our economy. More likely, those forecasting a no landing have a false sense of optimism that the economy will continue to be resilient.
The US 30-year yield rose to the highest level since Nov. 16, Thursday, joining the rest of the Treasury market in offering investors a return of at least 4% after another batch of strong labor-market data.
China has pledged to invest an additional $1.9 billion in the country’s biggest maker of memory chips, a deal that may herald a renewed influx of government capital into an industry hemmed in by US sanctions.
January’s optimism about the bond market seems like a long time ago.
"We forgot that war is history’s favourite driver of inflation." -Niall Ferguson
In recent years we have witnessed a surge in sovereign bond defaults in emerging markets.
Strength in employment and inflation has caused markets to raise the implied terminal rate while still expecting the Fed to normalize policy – which is different from easing – in 2024.
Asian/European Markets
Biden Has to Learn the Same Lesson as SVB
In hindsight, it was obvious it wouldn’t last. Low interest rates — the result of shifts in the global economy, economic stability, low inflation and monetary policy — couldn’t stay at zero forever.
How AI Will Make Land More Valuable
With all that extra intelligence, there will be a need and a desire to undertake many new projects, ranging from innovative theatrical productions to more efficient and densely packed solar panels. These new projects could also herald a world of much cheaper and greener energy, which would further increase humankind’s ability to manipulate the natural environment. Land will thus become more valuable.
The Consequences of Credit Suisse
The demise of a major bank illustrates the global tensions in the financial sector.
From A Deep Dive Into The Banking Sector
Beyond the near-term turmoil, there may need to be a re-evaluation of the regional banking model in the United States, according to a recent panel hosted by Stephen Dover, Head of Franklin Templeton Institute.
Natural Gas Woes Continue
As we discussed last week in Looking to the Futures, natural gas prices have been plagued by the perfect storm of lower demand and higher production throughout the withdrawal season.
World Markets Update: March 27, 2023
Six of eight indexes on our world watch list posted gains through March 27, 2023. France's CAC 40 finished in the top spot with a YTD gain of 9.34%. Germany's DAXK finished second with a YTD gain of 8.33%, and Tokyo's Nikkei 225 moved to third with a YTD gain of 5.30%. India's BSE SENSEX finished last with a loss of 5.24% YTD.
The Fed Waffles
The Federal Reserve raised short-term interest rates by another quarter point on Wednesday.
First Quarter 2023 Economic Review and Forecast
The economic signals and a host of geopolitical risks confronting investors suggest that 2023 could be as challenging as 20022 for both stocks and bonds.
Regulation Can’t Prevent the Next Financial Crisis
For all of you following the banking crises in the US and Europe, and asking why this is all happening again, I have bad news: Regardless of what laws are passed, or which regulations are issued, banking crises will recur — and not infrequently.
Market and Economic Dynamics to Keep an Eye On
Review the latest Weekly Headings by CIO Larry Adam.
From Anomaly to Opportunity: High Yields on Short Bonds
Stock and bond markets were shaken by the recent banking crisis in the US and Europe.
Recession Odds Rising
Recently I saw someone share a clip from their weather app. It said, “Rain expected at 3 pm,” right above a little graphic showing a 30% chance of rain at 3 pm. What’s wrong with that picture?
Is This The End Of The Petrodollar?
The U.S. dollar remains the world’s top reserve currency for now, though its share of global central banks’ official holdings has slipped in the past 20 years. By contrast, the yuan’s share of official holdings has more than doubled since 2016.
Sinology: Opportunity and Risk
China’s economy is in the early stages of a gradual, consumer-led recovery. In this issue of Sinology, Andy Rothman outlines why China’s opportunities outweigh risks.
How Is the SVB and Credit Suisse Crisis Affecting the US and European Banking Industry?
Following recent efforts by central banks and regulators to alleviate the banking crisis, Franklin Templeton Institute’s Stephen Dover and Lukasz Kalwak discuss their thoughts on the implications and outlook for the banking industries in the United States and Europe.
What are JGBs Trying to Tell Us?
Yields on 10-Year Japanese Government Bonds have fallen by about a third over the past two weeks, as shown in the chart below.
The Crucial Questions
To help understand the current market volatility arising from the collapse of banks in the United States and Europe, Head of Franklin Templeton Institute Stephen Dover provides his answers to three crucial questions.
Markets Again Under Pressure
Stocks fell and volatility rose this morning as banking sector worries persist.
What are JGBs Trying to Tell Us?
Yields on 10-Year Japanese Government Bonds have fallen by about a third over the past two weeks, as shown in the chart below.
Fed Hikes Quarter Point, Signals It Still Expects Higher Rates
The Federal Reserve raised interest rates by a quarter percentage point and signaled it’s not finished hiking, despite the risk of exacerbating a bank crisis that’s roiled global markets.
The Growth Slowdown Is Not Over Yet
Both the leading indicators of growth and liquidity continue to suggest growth will slow as 2023 progresses.
Morgan Stanley Turns ‘Outright Bullish’ on Asian Growth Stocks
Easing financial conditions globally have made Morgan Stanley “outright bullish” on growth stocks in Asia and emerging markets versus their value peers.
GLP-Backed Fund to Raise $100 Million for Asian Fintech Deals
A Singapore-based fintech investment firm is close to raising $100 million to back finance and blockchain startups in China and Southeast Asia.
Biggest Fear for Trillion-Dollar Funds Is Missing Next Rally
Some of the world’s biggest investors are looking beyond interest-rate hikes, bank failures and the threat of recession to one of the greatest fears of all money managers — missing out on the next big rally.
Incremental Progress Emerging in the Banking Sector Fallout
CIO Larry Adam outlines the positive events that are outweighing negative developments and looks at dynamics to focus on in the week ahead.
Edge of the Edge
The simplest thing that can be said about current financial market and banking conditions is this: the unwinding of this Fed-induced, yield-seeking speculative bubble is proceeding as one would expect, and it’s not over by a longshot.
A Difficult Job Becomes Even More Difficult
Chief Economist Eugenio J. Alemán discusses current economic conditions.
Bank Crisis Survivors Remember How Fast the Dominoes Can Fall
Steve Chiavarone doesn’t want to scare anyone, but what he remembers most from the last banking crisis was how sure most people were that it wouldn’t happen.
US Economy Has Investor Backing as Bank Risks Grow
Markets have been trading as if the end of the world is at hand – but what most participants see, behind the recent financial turmoil and contagion fears, is a still-strong US economy, the MLIV Pulse survey shows.
Two Sides of Healthcare, One Strong Investment Case
Portfolio Manager Andy Acker explains why the healthcare sector could offer an attractive combination of defense and growth in today’s market.
UBS to Buy Credit Suisse in $3.3 Billion Deal to End Crisis
UBS Group AG agreed to buy Credit Suisse Group AG in a historic, government-brokered deal aimed at containing a crisis of confidence that had started to spread across global financial markets.
Sustainable Investing: Opportunistically Managing Risk
Robust risk management is essential for fixed income investors. In his latest commentary, Marcus Moore explains why our sustainable investing team considers ESG factors as material business risks, similar to the traditional risks they also analyze.
A Multi-Asset Perspective on Recent Bank Turmoil: Don’t Lose Sight of the Macro Story
Franklin Templeton Investment Solutions explores the shared macro concerns that set the stage for the recent banking crisis, its ripple effects on the broader economy and implications for multi-asset investing.
Lies, Damn Lies, and Visions of Nuclear Catastrophe
The strongest force standing in the way of nuclear energy is the antiquated, irrational fear of it.
Pension Reform Showdown: Will The U.S. Follow France’s Bold Retirement Age Changes?
Sixty-six million Americans currently receive monthly benefits from Social Security, which, if nothing changes, is expected to be insolvent by 2035 at the latest. It’s time for Americans to take a greater role in their own retirement planning.
Silicon Valley: The Consequences of a Bank's Failure
The full story of SVB is still unfolding, but we offer some initial reactions.
How First Republic Bank Received a $30 Billion Lifeline
Jamie Dimon and Janet Yellen were on a call Tuesday, when she floated an idea: What if the nation’s largest lenders deposited billions of dollars into First Republic Bank, the latest firm getting nudged toward the brink by a depositor panic
Banking Sector Uncertainty Keeps Pressure on Stocks
U.S. equities are lower as pressure has returned to the banking sector, which remains top of mind.
No 2008 Redux, But Recession Coming
The market gyrations are not rooted in a banking crisis, but in financial cracks from rapid rate hikes.
India’s Balancing Act
Portfolio manager Peeyush Mittal and research analyst Swagato Ghosh say India has a fiscal playbook to chart a path of stability and growth.
European Banking Sector—Taking Stock After Silicon Valley Bank and Credit Suisse
Implications of SVB and Credit Suisse on the European banking sector—check out highlights from our recent panel discussion with Kim Catechis, Investment Strategist with the Franklin Templeton Institute.
Yellen Seeks to Reassure Congress on Banks Amid Oversight Angst
Treasury Secretary Janet Yellen told Congress on Thursday that the US banking system remains sound, seeking to reassure lawmakers, depositors and investors amid concerns about how the sector is regulated.
Banks and the Butterfly Effect—the Global Ramifications
Financial market volatility has followed the collapse of Silicon Valley Bank. Stephen Dover, Head of Franklin Templeton Institute, shares his thoughts on possible implications outside the United States.
Bank Worries Strike Again
What our experts think about today's market action.
Stocks Falling as European Banking Worries Flare Up
U.S. stocks are falling in pre-market trading as recent banking turmoil on this side of the pond made its way to Europe.
Central Bank Portfolios Are Underwater
If marked to market, assets purchased during quantitative easing are in the red.
Fed Traders Price In 100 Basis Points of Rate Cuts From May Peak
Government debt yields plunged globally as mounting financial-stability concerns prompted bond traders to abandon bets on additional central-bank rate hikes and begin pricing in cuts by the Federal Reserve.
Chinese Internet – the Boom and Bust Story
101 Lesson of Structural growth versus recovery growth investing.
China Can Quickly Catch Up to US AI, Says Venture Veteran
China can match the US in artificial intelligence thanks to the expertise of companies from Alibaba to Baidu, joining a global tech transformation that will dwarf the mobile revolution, according to industry pioneer Kai-Fu Lee.
Fidelity, Schroders Win Big on Treasuries Bets as Markets Swoon
Some of the world’s top money managers are sitting on a windfall after the collapse of Silicon Valley Bank spurred the biggest rally in US Treasuries since the early 1980s.
Can the ECB Teach an Old Dog New Tricks?
Senior Sovereign Analyst Jon Levy shares his analysis of the European Central Bank’s plans to unwind its largest quantitative policy measure, how it could affect markets and how it compares to previous policy changes.
Here’s How SVB’s Collapse Is Reverberating Around the World
Silicon Valley Bank became the biggest US lender to fail in more than a decade, creating fears of contagion in tech and finance sectors in the US and around the world.
India Seeks More Manufacturing
Can India capitalize on supply chain realignment to build its manufacturing sector?
Stocks Remain Under Pressure as Banking Worries Remain
U.S. stocks are extending last week's sharp declines that have come amid worries regarding the ultimate impact on the banking sector of the recent collapses of SVB Financial and Silvergate Capital.
Thousand-Word Equivalents
If a picture is worth a thousand words, this will be the “longest” letter I’ve sent you in a while, as there are quite a few pictures. It may also be the most wide-ranging.
Bitcoin Is A Key Component Of The Great Digital Transformation
Like face recognition, artificial intelligence (AI), mRNA vaccines and other modern technology, Bitcoin is a key component of the ongoing, rapidly accelerating digital transformation.
Weekly Market Guide
Review the latest portfolio strategy commentary from Mike Gibbs, managing director of Equity Portfolio and Technical Strategy.
Stocks Trying to Battle Back From a Two-Day Rout
U.S. equities are modestly higher in pre-market action following the February labor report that was only modestly above estimates.
Add Emerging Market Strength in Global Weakness
Head of Portfolio Strategy David Dali explains why it’s an opportune time to add emerging-market exposure.
Stocks Chipping Away at Weekly Losses
U.S. stocks are higher, paring weekly losses though the markets remain choppy following this week's hawkish Congressional testimony from Fed Chairman Jerome Powell.
China’s Green Enablers Deserve a Place in Equity Funds
Investors focusing on climate change often overlook Chinese firms.
Pushing Your Luck
The problem with speculation is that there’s usually a gap between the underlying risk and the inevitable outcome.
Hard to Achieve a Soft Landing
History shows a high risk of recession when central banks fight inflation.
Are Cheap Burgers in Emerging Markets a Good Sign for Investors?
Investors in emerging markets (EM) have endured a decade of poor performance. But things may be changing. Based on The Economist magazine’s data comparing hamburger prices across countries, many EM currencies look cheap today—as they did 20 years ago before an extended rally of EM stocks and bonds.
Gundlach: We Could Have the Worst Default Cycle Ever
High-yield investors beware. Junk bonds that were financed at low, fixed rates will eventually mature and, according to Jeffrey Gundlach, weak issuers that cannot refinance at higher rates will default.
The US and China: The Tech Cold War Continues
For decades since the end of the Cold War there have been very limited restrictions on foreign investments by US investors compared to those of other countries.
Risky Is Now Safe in Bond Market Upset by Soaring Inflation
Junior debt issued by banks is normally one of the riskiest types of fixed-income in the US and Europe. It’s typically not backed by collateral and in the event of a crisis it only gets paid back after other bonds.
Newsletter Volume 16, No. 1 February 2023
The planet’s billionaires are nearly $2 trillion poorer this year!
How a Billion-Dollar Invesco Fund Did a U-Turn After Hot Inflation Data
Alessio de Longis spent the last three months loading up on risk in his $1.1 billion Invesco Global Allocation Fund. Now, he’s winding down those positions and reversing course back to safety.
Europe: Sticky Inflation Favors Income
European stocks have outperformed this year as China’s economy restarts and the energy shock proved less severe than expected.
The New Brexit Protocol
A revised approach to Northern Ireland will lower trade tensions in Europe.
US Jobs Report and Powell Testimony Take Center Stage
US job growth probably moderated last month after a blistering January pace, while the unemployment rate likely held at a 53-year low, illustrating a labor market that’s proved mostly impervious to the Federal Reserve’s massive interest-rate hikes.
The Value of Women Across the Board
More women in senior roles will support the long-term success and sustainability of emerging markets.
BofA Strategists See Cash Back in Vogue With Markets on Edge
With bonds and stocks once again falling in unison, cash is the ultimate refuge.
Airline Stocks Are Soaring Over The Negative Headlines, Lifted By Positive Earnings
Lufthansa’s blockbuster report is just the latest signal that commercial aviation, one of the hardest-hit industries during the pandemic, may be ready to make a landing again in investors’ portfolios.
Why the Russia Sanctions Are Missing the Mark
While the sanctions regime imposed on Russia has dented its economy, it is far less severe than those imposed on North Korea and Iran, which included penalties on third-party countries. Imposing secondary sanctions could tighten the screws on Putin, but also accelerate deglobalization.
Crop Traders in High Demand at Hedge Funds Looking to Cash In on Commodities
Hedge funds and proprietary trading firms are beefing up agricultural markets expertise by hiring traders as big swings in prices have made even relatively niche corners of commodities trading lucrative during the past year.
Bonds Haven’t Been This Attractive Since 2008
Review the latest Weekly Headings by CIO Larry Adam.
Navigating A Turbulent Environment: EM IG To The Rescue
Economic growth and inflation have surprised to the upside so far in 2023, not only thanks to the reopening of the Chinese economy, but also due to the resilience of the labour markets.
Fed's Path to Cooling Inflation Continues to Loom Large
Markets this month were unable to build upon January's momentum following speculation that the central bank will continue with interest rate hikes.
Medical Properties Trust: 11.26% Yield – The Risk is Priced In
Medical Properties Trust’s dividend at the 2022 rate of $1.16 is safe even if Prospect, its third-largest operator, does not pay a single cent in 2023.
The Indexing Bomb
Last week, I spoke at the Mississippi CFA Society’s annual forecasting event.
The "No Landing" Scenario is as Likely as UFOs
Maybe UFOs are carrying wealthy aliens wanting to buy a lot of stuff and boost our economy. More likely, those forecasting a no landing have a false sense of optimism that the economy will continue to be resilient.
Central Bank Portfolios Are Underwater
If marked to market, assets purchased during quantitative easing are in the red.
Entire Treasury Market Yields at Least 4%, Now Including 30-Year
The US 30-year yield rose to the highest level since Nov. 16, Thursday, joining the rest of the Treasury market in offering investors a return of at least 4% after another batch of strong labor-market data.
China Plans to Inject $1.9 Billion Into Top Memory Chipmaker
China has pledged to invest an additional $1.9 billion in the country’s biggest maker of memory chips, a deal that may herald a renewed influx of government capital into an industry hemmed in by US sanctions.
Fading Hopes of a Fed Cut Wipes Record $327 Billion From Bonds
January’s optimism about the bond market seems like a long time ago.
One Year On
"We forgot that war is history’s favourite driver of inflation." -Niall Ferguson
The Many Faces of Sovereign Default
In recent years we have witnessed a surge in sovereign bond defaults in emerging markets.
Data Alters Market's Expectations for Peak Policy Rate But Not Outlook for Fed Cuts
Strength in employment and inflation has caused markets to raise the implied terminal rate while still expecting the Fed to normalize policy – which is different from easing – in 2024.