Brexit’s Week of Mayhem
This week British members of parliament are debating Prime Minister Theresa May’s 585-page Brexit draft withdrawal agreement. Although it was approved at a special EU Brexit summit in Brussels last month, May faces an uphill battle in the UK with over 100 Conservative and Democratic Unionist MPs denouncing the deal before debate had even begun. […]
Crinkles in the Credit Market
There are countless nuance and peculiarities stitched into the fabric of every financial market across the world; from equities, commodities, foreign exchange and credit, there are an abundant number of imperfections. Today we will explore a few crinkles in the credit markets, a topic of particular interest given the credit cycle has likely crested with […]
When a political landscape crumbles
When the political status quo of such an important economic and diplomatic power comes to an end, global investors take heed. Of course, we are not talking about the United States. Or even China. Or even Britain for that matter. We are, of course, talking about Germany. Germany, alone, is a US$3.7 trillion per annum […]
WHAT’S UP IN THE STOCK MARKET?
With just a trading day left in October 2018, US stocks look set to record their worst result in a calendar month since February 2009 – when the global financial crisis was in full swing. This prompts a few important questions for investors: were stocks so expensive that a correction was due? Are stocks expensive […]
What Rhymes With GFC?
Minutes from the U.S. Federal Open Market Committee (FOMC) meetings (i.e. the Federal Reserve), can generally cure even the most stubborn insomnia. So as we parsed the most recent set of minutes (September 2018) and read through usual subjects such as how tight the labor market is, what interest rate trajectory might look like and […]
How Deep is Your Market?
The collective performance of the stocks of Facebook, Amazon, Apple, Netflix and Google (now Alphabet) has been sensational over the last few years. Combined with their sheer scale, the stocks of these companies have therefore accounted for the bulk of the US equity market’s gains in this time. So, it comes as no surprise that […]
An American butterfly flaps its wings
The last few months have not been great for Australian investors. Mortgage rates have been increasing (despite no change in the RBA’s cash rate), thereby increasing the debt-servicing requirements of one of the most indebted household sectors in the world. Meanwhile, the Australian dollar has been depreciating, at least against the US dollar, representing an […]
Playing Chicken: The Fed vs the Bond Market
Filtering through the endless stream of information and data that we are constantly bombarded with can be an overwhelming task, particularly in the financial markets. Separating signal from noise is made even more challenging as one person’s signal, may be another person’s noise and vice-versa. There is perhaps no better example in the market today […]
The US is warming while China is cooling
We have written extensively about the evolving nature of the US-China relationship. There are multiple dimensions to this – including political, trade policy and defence policy. But it is also important to keep an eye on the aggregate health of the respective economies. These are the two largest economies in the world (indeed, the Chinese […]
China’s economic “aggression” through the lens of Trump
The US is officially in a tit-for-tat trade war with China. On June 18, President Trump stated the following: “On Friday, I announced plans for tariffs on $50 billion worth of imports from China… However and unfortunately, China has determined that it will raise tariffs on $50 billion worth of United States exports… Therefore, today, […]