Current Topics

Expanded 2016 US Election Commentary

Topic: US, 11/9/2016

The voters have spoken and Donald Trump will be America’s next President. The Republicans will keep both houses of Congress, losing only a handful of seats. S&P 500 futures plunged in overnight trading, but short-term volatility is normal and US markets have since stabilized, closing the day after elections in positive territory. Markets move most on the gap between reality and expectations. People fear Trump’s campaign pledges, but politicians’ promises rarely become reality.

China's Long March Toward Freer Markets

Topic: Emerging Markets, 9/16/2016

China’s economic miracle—its 30-plus year path of rapid advance and development to become the world’s second-largest economy—is often seen as uniquely Chinese, an isolated case of policymakers luckily pulling all the right levers to conjure growth. To us, though, a longer perspective shows China’s miracle bears broad similarities to Taiwan’s, Korea’s and Japan’s (with some admittedly Chinese characteristics). We believe a look at how China’s “miracle” resembles those before it—and at some key differences—can add valuable perspective on its present situation and the likely path forward.

Brexit – Initial Market Commentary

Topic: Europe, 6/29/2016

The British people have officially voted to leave the European Union (EU). While Scotland, Northern Ireland and London supported remaining in the EU, Wales and the remainder of England overwhelmingly voted to leave. At final tally, 52% voted “Leave” versus 48% “Remain”. This piece breaks down the intricacies of the Brexit decision and analyzes the variables behind the uncertainty clouding the markets.

Retail Recession Label Does Not Fit

Topic: US, 5/26/2016

In the Q1 2016 earnings season, some department stores reported weaker-than-expected results with news of declining sales and profits. Media was quick to dramatize the reports with cries of a US “retail recession” and assertions that the consumer is tapped out —all bad signs for US growth looking forward. However, in this piece, we would humbly suggest that is incorrect.

Brexit – Potential Market Impact

Topic: Europe, 5/20/2016

On June 23rd, a public referendum will decide whether the United Kingdom remains in the European Union (EU). Britain’s possible exit from the EU, popularly named “Brexit”, has been the subject of heated debate with a number of high profile supporters on either side. This piece examines the likelihood of Brexit discusses potential implications for equity markets.

FI on False Fears

Topic: Emerging Markets, 3/28/2016

An in-depth analysis that debunks prevailing fears around China’s Debt & GDP growth, US oil industry debt, and the Fed’s balance sheet.

EM Corporate Debt

Topic: Emerging Markets, 2/18/2016

A summarized analysis that puts EM corporate debt into perspective and reveals the portion denominated in USD.

How Real is China's GDP?

Topic: Emerging Markets, 10/23/2015

Chinese GDP beat expectations in Q3, growing 6.9% y/y--the country's lowest growth rate since 2009. While this figure exceeded the financial media's expectations, it also spawned questions regarding its accuracy, and the reliability of Chinese data in general.

Will the UK's Referendum Impact Markets?

Topic: Europe, 10/22/2015

By the close of 2017, the United Kingdom (UK) is scheduled to hold a referendum on whether or not to stay a member of the European Union (EU). While some expect the United Kingdom's European Union referendum to roil equity markets, we believe this is unlikely.

An Unfavorable Climate For Energy Stocks

Topic: US, 8/17/2015

After rebounding in June, West Texas Crude (WTI) began decreasing and in August reached a six-year low. Energy firms are depleting cash reserves. Their earnings and revenues are declining, and a few struggling firms are beginning to sell assets or enter bankruptcy. Despite contrary assertions, it is too early to bottom fish in Energy.