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…
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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…
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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,…
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In our Quarterly Strategy Update, we explore the changes that have been occurring in Japan and why we hold a favorable investment stance toward Japanese equities in the Knowledge Leaders Strategies. To download slides in PDF, please click here.
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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…
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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…
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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…
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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…
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Few were surprised when the ECB made a 25bps rate hike announcement yesterday. The move was aligned with analyst expectations, and in the face of 6.1% year-over-year Euro Area inflation, there was little room for ECB President Christine LaGarde to follow US Fed Chair Jerome…
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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…
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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…
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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…
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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…
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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…
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It would appear that the decline in European natural gas prices has contributed to an increase in Eurozone GDP estimates for the year. Once prices crossed below $50, GDP estimates began to rise, and now the consensus expects .6% GDP growth from the Eurozone this…
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