• The compression of yields, inflation expectations, and volatility in Q2 was “the best of all possible worlds” for risk assets, but we suspect it is on borrowed time. Our near-term outlook has turned more cautious for risk as odds build that the next 10% move is lower, not higher. •  The premium investors pay […]

• Our near-term outlook remains bullish, but our sentiment has been trimmed despite growth prospects for the current year that remain outstanding. •  Future headwinds to risk appetites are beginning to crystallize. The move higher in equities may persist over the near term, but we suspect that it is the underlying move higher in borrowing […]

It is a struggle to find anyone not pleased to kiss 2020 goodbye. The year was one full of COVID-19 related tragedy and unavoidable change, affecting health, employment, social well-being, and societal norms. Political strains also surfaced, ranging from diplomacy with China, UK-Europe Brexit, and a US election process that left few South of the […]

Benchmarking risk in a fast-moving world is rarely straightforward. This task today is more difficult than usual given a host of uncertainties ranging from the path of the Covid-19 pandemic, the durability and breadth of the embryonic rebound in growth, and now an election in the US that promises to be the most tumultuous in […]

Synchronized global central bank & fiscal policy stimulus in Q2 was breathtaking. Near term, it is stunting the carnage caused by Covid-19, including economic growth plunging at a rate not seen since the Great Depression. It is also an affirmation of the jaw-dropping power of printing money and the impact across asset markets, both explicitly, […]

Why Stock Markets Went Down and Then Bounced Up As the Hammer strategy to combat the Covid-19 virus evolved to prioritize health through physical distancing, whole chunks of the global economy shut down.¹ ¹ See our article Covid-19 – Hammer & Dance Trend Rethink at  https://authenticasset.com/perspectives/ Stock markets gasped, plummeting from peaks around Feb. 20th, […]

The Ghosts of People Past The suppression strategy against the virus is still intensifying more than it is easing. Acting quickly and aggressively with physical distancing brings down the hammer on the transmission speed, the first part of The Hammer and The Dance eloquently described by Tomas Pueyo¹. ¹ https://medium.com/@tomaspueyo/coronavirus-the-hammer-and-the-dance-be9337092b56 The battle against the spread […]

The last quarter of 2019 placed an exclamation point on what was a banner year for risk assets. More defensive allocations to fixed income also performed well, primarily due to a Federal Reserve that engineered a historic pivot from raising rates to delivering three rate cuts. Central banks to the rescue once again! In addition, […]

The Fed Pivot – from Swagger to Stagger Three themes that took root a year ago remain familiar; sluggish global trade exacerbated by China-US trade tensions, evidence of a maturing economic cycle in North America and beyond, and stock market volatility flowing on the Trump news cycle and spiking on unheralded neck wrenching tweets. Noting […]

Windfall to bondholders Interest rates globally have collapsed. US 10-year government bonds now yield 2.0%, down from 2.5% at the end of Q1 2019. Incredulously, 10-year Greek government bonds are also now yielding just 2%, despite having credit ratings that are of speculative grade. These yields look meagre until alternatives are considered. Following the US […]