Markets

The Market Thinks the BoJ is In Play September 22, 2023

Posted by Steven Vannelli, CFA in Economy, Markets, News

The Bank of Japan met last night to cap off a week of central bank activity. From their policy statement: “The Bank decided, by a unanimous vote, to set the following guideline for market operations for the intermeeting period. The short-term policy interest rate: The…

Read More

A Consumer Credit Cycle Has Begun September 05, 2023

Posted by Steven Vannelli, CFA in Economy, Markets

With government stimulus over, accumulated savings starting to become depleted, rents soaring, and student loans about to switch back on, it appears a credit cycle has begun where borrowers struggle to fulfill their financial commitments. In the charts below, we identify the overall delinquency rate…

Read More

Dysfunction in China August 15, 2023

Posted by Steven Vannelli, CFA in Economy, Markets, News

Today was a disaster for Chinese economic data. In the table below, we can see that every single data point missed consensus expectations in the wrong direction. Activity undershot expectations across the board. Data for China has been trending down for most of the year,…

Read More

BOE Doves Take Hawkish Stance June 23, 2023

Posted by Knowledge Leaders Team in Economy, Markets

The Bank of England surprised market participants yesterday morning when they raised the Official Bank Rate by a full half point to 5.00%. The move caught traders off guard as the BOE had chosen to raise rates by only a quarter percentage point at each…

Read More

Hanging Tough? AI Sentiment Shows Hawkish Fed June 22, 2023

Posted by Knowledge Leaders Team in Economy, Markets, News

After yesterday’s testimony by Fed Chair Jerome Powell to the US House of Representatives I analyzed its sentiment on key issues compared to his previous four FOMC policy statements, using ChatGPT. The table below shows the results. Unsurprisingly, ChatGPT left the sentiment for both inflation…

Read More

BoJ Taking it Easy June 21, 2023

Posted by Steven Vannelli, CFA in Economy, Markets, News

Today the minutes of the April 27-28, 2023, Bank of Japan meeting were released. Below in italics are the top ten highlights generated by our AI engine. The Bank of Japan (BoJ) has been conducting purchases of various financial instruments and providing funds without setting…

Read More

More Misconceptions about Japanese Equities June 20, 2023

Posted by Knowledge Leaders Team in Economy, Markets

Continuing last week’s discussion on the role of minority interest in Japanese equity returns, below we perform the same correlation test on universes of DM Americas and EMEA companies. To recap, we tested the following metrics, drawn from each company’s fiscal year-end reports and stated…

Read More

Are European Assets Reflective of Financial Conditions? June 09, 2023

Posted by Knowledge Leaders Team in Markets

The Euro Stoxx 50 Index is up about 13% year-to-date. Not a bad return for a region whose largest economy is in recession, and whose second largest is facing one of the worst inflation fights in decades. Perhaps the attention-grabbing nature of large economic releases…

Read More

Misconceptions about Japanese Equities June 09, 2023

Posted by Knowledge Leaders Team in Markets

Investor activism in Japanese companies has been the subject of a fair amount of recent conjecture. Specifically, foreign investors have been concerned about the relative prevalence of minority interest, the ghosts of fading Keiretsus on Japanese companies’ financial statements. This, combined with significant insider shareholding…

Read More

Warming to Duration May 30, 2023

Posted by Steven Vannelli, CFA in Markets

Leading into the weekend, where the debt ceiling had not been settled, markets were exhibiting very interesting positioning. To start, US Treasuries across the maturity spectrum were hugely out of favor. Net speculator positioning in options and futures were as short as they have every…

Read More

Investors Only Have Eyes for Cash May 22, 2023

Posted by Knowledge Leaders Team in Markets

If you are starting to have a case of déjà vu around the current debt ceiling negotiations, you are not alone. In 2011, markets were relatively flat during the year before Congress and the White House (temporarily) buried the hatchet with the passage of the…

Read More

There is Something Rotten in China May 22, 2023

Posted by Steven Vannelli, CFA in Economy, Markets

One metric I look at fairly often for various countries is the relationship between the performance of stocks vs. bonds. The idea is straightforward enough: when stocks are outperforming bonds, it tends to be associated with a growing economy. When bonds are outperforming stocks, it…

Read More