For an entire generation of investors, the market has been underpinned by falling rates, increasing leverage, and relative geopolitical stability. But today all those tailwinds are becoming headwinds. Adrian Warner, Managing Director and CIO of Avenir Capital lays out the challenge ahead and a strategy to tackle it. Show More
A question I am being asked a lot at the moment is: Where are we in this most atypical of economic cycles? I tend to think we are in the late cycle of the economic recovery, as suggested by data points such as the Fidelity Leading Indicator. Valuations only tell... Show More
Over the past month our leading indicators of the industrial cycle have shown signs of peaking. The real question is whether this suggests the industrial cycle is merely temporarily interrupted and rapid global growth will soon return; whether we are through the fastest phase of acceleration in the cycle, and... Show More
Howard Marks expressed concerns over a range of different assets and indicators in his last memo, which caused quite a media uproar. So he’s expanded and clarified some of his views. More interesting though, was his change of opinion on Bitcoin. His key quotes from this new memo are below. Show More
With the consensus slowly but surely shifting to expect rate hikes from the RBA, it's worth thinking about the impact of RBA hiking cycles on asset markets. One asset class we recently looked at is Australian credit spreads - we took a look at a few different drivers, and the... Show More
The PortfolioDirect resource sector macro portfolio model shows position reductions resulting in a continuing buildup in cash. The underlying macro analysis suggests that global growth momentum has not been enough to start a meaningful market re-balance leaving metal prices at the mercy of exchange rate movements https://www.livewiremarkets.com/wires/31607 and, consequently, at... Show More
“Less room for error” is the sombre message in the latest review of the world economy from the International Monetary Fund. Global growth forecasts for 2016 and 2017 show a very slight acceleration but, over repeated forecast rounds, the Fund’s outlook has become progressively less optimistic. For those investors looking... Show More
Decisions about interest rates by the U.S. Federal Reserve last week (and monetary policy moves by the ECB a week before) have done more to highlight the challenging cyclical outlook confronting the resources industry. Neither Europe nor the USA, together accounting for 28% of global output, shows signs of contributing... Show More
Metal price movements appear consistent with the evolution of historical cycles. The first upgrade to the cyclical positioning in over two years - albeit very minor - using the PortfolioDirect cyclical indicators was made this week. Show More
Global growth rates anchored at less than 4% imply that metal inventories continue to rise for the foreseeable future. There is no near term cyclical upturn. Growth and exchange rates have been moving in the wrong direction for a cyclical improvement in metal markets. This week’s PortfolioDirect investment report... Show More
At the end of May, the gap between current metal prices and the historical benchmark against which PortfolioDirect judges cyclical positioning (see chart) had widened. The flow of metal usage statistics (see livewire from 7 days ago https://www.livewiremarkets.com/wires/27305 ) indicates a rising chance that usage growth in 2015 will be... Show More
Several indicators of raw material usage released in the last few days add to the evidence of a slowing cyclical adjustment in metal markets. The change in tempo is not surprising since metal markets usually need an acceleration in global growth to perform at their best. The World Steel Association... Show More
