Does Australia control its destiny?
Last month, there was probably no one more surprised than Australian Prime Minister, Scott Morrison – or “ScoMo” – to which he is commonly referred. ScoMo had just won a decisive victory in Australia’s general election against an opponent that was the short-odds favourite in the betting markets.
The Cresting U.S. Tax Tailwind
U.S. law makers delivered one of the most powerful tailwinds to corporate profitability in many decades by implementing the “Tax Cuts and Jobs Act” (TCJA) which commenced at the start of 2018. While the centrepiece of the legislation was the headline reduction to the statutory tax rate from 35% to 21%, there were several other changes that […]
Power to the US Consumer
Amidst the backdrop of a ten-year economic expansion, recent indicators of a softening in US consumer spending do not feel unreasonable. However, when breaking down the fundamentals of the US consumer, whose spending drives the aggregate economy, they appear as strong as ever. GDP is aggregate economic demand, defined as the total value of everything […]
Around the world in six charts
As 2019 is now well and truly underway, we thought it was timely to provide a quick summary of our near-term global economic observations. As readers will know all too well, at Montaka we pay close attention to global macro trends, despite seeing ourselves primarily as bottom-up investors. While every stock thesis – both long […]
What does a trade war “win” look like?
President Trump’s decision on Sunday to extend the March 1st deadline for a trade deal between the US and China was interpreted favourably by investors as an indication that progress was being made on the discordant trade negotiations which have whipsawed global equity markets over the last several months. But to redress the full list of […]
Is an EU/China trade war next?
At Montaka, we believe there are five major forces that will significantly shape investment returns over the coming decades. One of these relates to the “New World Order” that is currently emerging. Whether it’s the uprooting of norms by President Trump, the UK’s decision to leave the EU, China’s rise as a state-dominated economy, or […]
Signals from the bond markets
Through the course of 2018, major central banks, such as the Fed and the ECB, were gently tightening monetary conditions following the strength of the global economy in 2017. Economic growth had improved and inflation expectations had recovered back towards target levels following nearly a decade of monetary stimulus. Tightening in the US can be […]
Central Bank Liquidity and the Repricing of Risk (Part II)
As we began discussing in Part I of this blog entry, the research team at Montaka Global recently explored some of the major dynamics occurring in the fixed income markets, how they may impact stocks and potentially reveal some perspectives on what may lay ahead in 2019. Below is the continuation of that conversation, highlighting […]
Central Bank Liquidity and the Repricing of Risk (Part I)
The research team at Montaka Global recently explored some of the major dynamics occurring in the fixed income markets, how they may impact stocks and potentially reveal some perspectives on what may lay ahead in 2019. Below is a summary of some of the key thoughts and observations that we explored. Central Banks are Tightening […]
The Tariff Shakeup
The tariffs that the U.S. has imposed on China have featured heavily in the media. This retreat from the notion of globalization – a tenet that has guided trade discussions for the past few decades – is harming the relationship between the U.S. and China, and is creating immense uncertainty for companies. Less well-understood is […]