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Entries Tagged as 'The Markets'

Could The Fed End The Stock Rally?

July 12th, 2017 · No Comments

The Fed could trigger a recession and a considerable stock market selloff if it tightens too much. We doubt there is much need for that given the fact that inflation is still very well behaved. In fact, in a world plagued by deflationary forces and high debt levels, a little inflation isn’t actually much of […]

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Tags: Monetary policy · The Markets

Populism, Trade And The Markets

July 10th, 2017 · No Comments

Much of our prosperity in general and shareholder returns in particular depend on the global economic order of relatively free trade and capital flows. That order has been singled out as the source of stagnation by an increasingly populist movement. While there are indeed groups left behind from the disruption caused by trade, it is […]

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Tags: The Markets

Volatility To Return?

July 9th, 2017 · No Comments

After a period of unusual calm, markets are getting a little more volatile. We think such volatility was always going to come, given the long period of unusual stability. This is informed by vertigo after strong gains, retreating central banks, tax cuts going nowhere and the prospect of trade troubles. And while we’re alarmed about […]

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Tags: The Markets

Cash Is Piling Up In The Corporate Sector

June 11th, 2017 · Comments Off on Cash Is Piling Up In The Corporate Sector

The corporate world, especially the biggest firms, are enjoying record profits and cash balances in the developed world. Whilst they have been saving more, they have invested less which has added to the decline of economic growth in the developed world. One can legitimately ask whether companies have been too frugal and should boost investment […]

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Tags: The Markets

The Political Risk To Stocks

June 11th, 2017 · Comments Off on The Political Risk To Stocks

The US economy generates a lot of wealth but a large majority isn’t sharing in it. This has already led to one political semi-revolt. But what will happen if that revolt, which led to the Trump presidency, doesn’t deliver? It remains very much to be seen whether unleashing capitalism, given the economic circumstances, will lead […]

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Tags: The Markets

Is This A Bubble?

June 2nd, 2017 · Comments Off on Is This A Bubble?

Stocks are expensive, but in and of itself, this isn’t necessarily a problem. As long as bond yields stay benign and there is no recession or other dramatic economic event, stocks will tend to go up. What is a problem is the quality of earnings. Is This A Bubble? | Seeking Alpha

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Tags: The Markets

Bond market’s recession warning is at odds with stock market near record highs

June 1st, 2017 · Comments Off on Bond market’s recession warning is at odds with stock market near record highs

Stocks are near record highs, driven by surging tech shares, a sharp contrast with the bond market, where interest rates have been sinking on worries the economy just isn’t getting enough juice for growth to pick up.The S&P 500 also is just a short hop to record territory, and it too tells a very different […]

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Tags: The Markets

PIMCO: 5 key policy areas will test markets over the next 5 years

June 1st, 2017 · Comments Off on PIMCO: 5 key policy areas will test markets over the next 5 years

Pimco analysts Richard Clarida, Andrew Balls, and Daniel Ivascyn cite “insecure stability” as a key factor that will affect policy decisions around the world. “Over our five-year secular horizon we believe that the global economy will be ‘driving without a spare tire’ as the Fed raises rates and shrinks its balance sheet,” write the Pimco […]

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Tags: Economy · The Markets

Dow 40,000!

May 20th, 2017 · Comments Off on Dow 40,000!

A pundit argues that the S&P can double in five years, or sooner; we kick the tires of the reasoning behind this. One part of the argument seems actually reasonable – the flattened and elongated business cycle – although even then we think his prediction is a stretch. It’s the second part of the reasoning […]

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Tags: The Markets

What Will Keep The Rally Going?

April 18th, 2017 · Comments Off on What Will Keep The Rally Going?

The market rally has stalled on diminished outlook for a Trump reflation and a surprising softening in US economic data. It’s understandable, given the length of the rally and the stretched valuations. But it’s difficult to see any clear catalyst propelling stocks higher in the near future, this is more a market for stock pickers […]

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Tags: The Markets