The US market has become more complex. Earnings have been strong during 2017 but multiples are highly elevated, meaning there are increasingly fewer opportunities. One of the biggest risks for markets would have to be US equities. It’s more than 50% of the MSCI World Index, and where many people... Show More
Precious metal prices have been in full retreat the past few weeks, with the price of gold declining toward USD $1300oz. This pullback has had a number of drivers including an easing of the ‘safe haven’ bid as markets fade the rhetoric to do with Korea, the USD catching a... Show More
Commodity prices have defied pessimism and rallied solidly over recent months on the back of improved Chinese economic prospects, stability on the European political front, some degree of acclimatisation to Trump-related government volatility in the USA - and a weaker US dollar. Show More
Some of the brightest economic and investment minds in the business debated the big macro-economic issues at our latest Crestone Investment Forum. Read on for insights from Jacob Mitchell, Brett Gillespie, Vimal Gor, Dr Phillipp Hofflin, Robert Mead, Dr Michael McCorry, and Stephen Halmarick. Some of the key takeaways are... Show More
It's worth reflecting upon the staggering level of international debt. Financial crises are invariably caused by debt. The Bank of International Settlement (BIS) has recently warned that a new financial crisis is looming. Part of this is simply its job and it's routinely warning against this. But it does have... Show More
Gold’s best friends at present are the US Federal Reserve and Donald Trump. The US dollar is weakening as the opposition of two more Republican senators to the US healthcare bill this week meant the measure is effectively dead in its current form. Show More
Tim Toohey, former Chief Economist at Goldman Sachs, was the #1 rated economist on the Greenwich survey for 13 years. Earlier this year he teamed up Brett Gillespie Portfolio Manager of Ellerston Capital's new Global Macro Fund. Livewire spoke with Tim about his strong view on how US rates could... Show More
As the Fed meets to make its June monetary policy decisions, the consensus (and my view) is that they will hike interest rates again. This will add to the interest rate differential support for the US dollar and driver further policy divergence. This comes at a time where the US... Show More
We are used to the experience of economic developments influencing and sometimes determining political events. This past year we have seen political events influencing markets and economic forecasts more than usual. The rise of the populists as a reaction to the specific disaffection with wage stagnation, immigration and terrorism is... Show More
When the US Federal Reserve (“the Fed”) Chair announced the much anticipated increase in the Federal Funds or cash rate on 15 March, she noted that the Fed intended to maintain the size of its balance sheet through this calender year. In other words the Fed would, for at least... Show More
One of most reliable early warning indicators of an impending equity bear market is the shape of the US yield curve. When short-term interest rates are higher than long bond yields, it is a sign that monetary policy is tight enough to choke off growth in the economy and company... Show More
Today’s news headlines scream about a world of almost unprecedented political and economic policy uncertainty, yet measures of equity volatility are falling. How do we explain this inconsistency? Show More
Bond-king Bill Gross labelled global central banks’ $12 Trillion balance sheets as ‘methadone’ for investors, as they continue to crave debt and low rates. Without it, he says the US economy would sink into recession. “A 2.45%, 10-year U.S. Treasury rests at 2.45% because the ECB and BOJ are buying... Show More
This time last year, JCB Advisory Board Economist, Saul Eslake warned of the risks of a Yuan devaluation: “A large devaluation of the Yuan would add renewed impetus to the deflationary pressures that policymakers in advanced economies are hoping will ebb this year.” This proved prescient as markets saw a sharp... Show More
In The Australian Financial Review I argue that the best traders make money through consistent short-term investing rather than via irregular long-term bets given volatility and uncertainty scale with time and in this context reflect on the incredible net returns produced by the world's greatest investor, Renaissance Technologies, which have... Show More
The Dow Jones at record levels doesn’t reflect a robust underlying economy - it’s in many respects a reflection of an equity market that’s simply pumped full of Fed-administered hot air. Many ordinary Americans haven’t enjoyed the fruits of a runaway sharemarket – in fact their situation has deteriorated. The... Show More
I saw a US election analyst commenting that "the mainstream media got the mainstream wrong." Seems to be the way in the modern age - perhaps too much attention is paid to social media discussion to try and gauge voter mood. Many who feel marginalised are too busy working 3... Show More
The risk of a US recession next year is rising fast. Early warning indicators from US 'flow of funds' data point to an incipient squeeze, the long-feared capitulation after five successive quarters of declining corporate profits. Yet the Fed has set the course for a rise in interest rates in... Show More
The Federal Reserve managed to out-dove the markets yet again in September and now view interest rates as only ‘moderately accommodating’. Given how quickly their estimates of the neutral rate are falling they may well have completed the tightening cycle after only 1 hike. The clear message from the three... Show More
It is always dangerous to fight the Fed and that is what we have been doing this year. World economic growth continues to disappoint despite the benefit of lower energy costs. Corporate earnings in most parts of the world have continued to fall and now the US is experiencing falling... Show More