Aging States – Economic Suffering Ahead?

The International Monetary Fund (IMF) has warned this week, in the latest World Economic Outlook report, that a number of developed economies - including Britain, Japan and the US - risk economic contractions as the balance of ageing populations hangs heavy against output generating ability. Highlighting that over coming [...]

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Tesla – The Beginnings of a Downward Spiral?

Although not entirely new territory for the electric car maker, the last few weeks have been quite the roller coaster ride for Tesla. Short investors, currently in no small number, and many vocal commentators have been flagging the mighty cash flow challenges for the automobile pioneer over the past [...]

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What Is Next After Libor Explained

The majority of investors are well acquainted with benchmark analysis and selection when it comes to gauging the all-important performance of investments and investment managers. Most also watch interest rate moves closely in anticipation of future impact – helping assess competing assets’ yields, determine price forecasts, fair value, mortgage payments, [...]

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BAML: Risk-Off Sentiment Gathers Pace

Although the decision of the US Fed to raise rates by 0.25% to a target range of 1.5% to 1.75% came as little surprise to investors, it has had the power to add to a growing risk-off rhetoric. Further to this, in no small part fuelled by the political [...]

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US Equities – Investor Nervousness Intensifies

Although Wall Street continues to boast outperformance against competing asset classes YTD for 2018, there are signs in the market that investors are growing nervous when it comes to US equities. Posting the first quarterly loss since 2015, the end of Q1 2018 has seen the S&P stumble from [...]

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ESG + Quants – A Match Made In Heaven?

Although still relatively niche, investment allocations based on ESG (environmental, social and governance) based motives are growing. While these investments offer investors conscience-based return alongside their monetary gains, there are solid arguments from a portfolio theory perspective to support this shift in allocations – specifically a new source of [...]

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UBS – Excessive Leverage in US Corporates

Seeking, at the very least, inflation-beating returns in a persistent low interest rate environment has meant fixed income investors have turned to more creative, arguably riskier, investment allocations over the past few years. Famed for their commensurate risks, US junk bonds and leveraged loans soared in volumes through 2017 [...]

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China’s 2018 Fiscal Stimulus – Do Or Die

With yesterday’s announcement from President Trump of a 25% US import tariff on $60billion of Chinese goods, the spectre of a global trade war looms larger. 2 As the world’s two largest economic powerhouses go head-to-head can we expect a severe turnaround in economic growth forecasts for the near to [...]

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BoAML: Investors Yet to Act on Fears

Recently released findings from the monthly BoAML Global Fund Manager Survey (FMS) suggest that although investors are yet to reach fear territory deep enough to affect allocations materially, “cracks in the bull case” are emerging.1 The main concerns have been highlighted as growing risks of global trade war, stagflation, [...]

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China Growth Lower, But Debt Much Higher

  Chinese policymakers are continuing to work to reform the country's financial system and meet concerns about China's ability to be able to sustain its tremendous amount of borrowing. The latest effort by policymakers is an increase in the ability of Chinese regional and local governments to issue bonds in order [...]

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Top 5 it is – Narrowing Opinion?

Faced with sizeable uncertainty, investors and investment managers alike often incorporate economic principles and research in formulating an opinion, and more importantly a position, in the market. However, according to newly released research from the Department of Economics of Brown University, these investors would be wise to keep the [...]

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Man Of Steel

March 1st 2018 was the day that President Trump set into motion a contentious discussion of a potential global trade war – following his announcement of new tariffs on steel and aluminium imports that would be implemented as soon as next week. President Trump announced steel tariffs of 25% and [...]

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CTAs Extend Hold on Oil

According to recent research from Goldman Sachs, trend following CTA’s have been driving recent market declines in oil – repeating a trend that materialised across Q1 of last year. 1 However, unlike 2017, this year GS argues long speculative positioning has been driven by a solid fundamental backdrop – [...]

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Emerging Markets – Buyer Beware

Riding on the back of dollar weakness EM currencies have been good to investors over the past year and a half. However, inflation is lurking and with it threatens to bring this buoyant EM period to its end. In addition, recent research from Capital Economics forecasts that currencies of [...]

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While leverage continues to drift higher in the market, it appears investors are happy to accept lower levels of premium on credit-based assets

Almost four years ago the US Securities and Exchange Commission and US Federal Reserve implemented capital reserve requirements such that collateralized loan obligation (CLO) sponsors would be required to invest capital in the CLOs they manage – a structural change designed to align the interests, and more importantly, the [...]

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