The VP Research Blog
A blog about financial markets and the VP investing framework
The Big Imbalance – US-China
The US and China recoveries are tied at the hip. Both countries responded to the pandemic in ways that suited them, with the consequence the global trade imbalance is now essentially a bilateral one between the US and China. The plunge in global trade has reduced...
Inflationary Build-up in EMs
As has been the case in developed markets, policymakers in emerging markets have been quick to deliver monetary stimulus in the face of an unprecedented global health pandemic. While necessary to avert a deeper drawdown in economic activity, the indiscriminate...
Global Outlook – August 2020 [VIDEO]
This is a recording of our monthly Global Outlook call for clients, recorded on August 13th, 2020. Key themes: - Investment theme #1: bullish commodities and oil - Investment theme #2: prefer cyclicals vs defensives - Investment theme #3: volatility hedges -...
Average Inflation Targeting – The Swedish Experience in 1931-32
Last week the Fed made a pivotal change to its inflation framework. As expected the central bank is now moving away from an inflation target to an implicit price-level target. Sweden is the only other country to have had experience of price-level targeting, in the...
Signs of Long-term Damage in Jobs, Investment and Trade [VIDEO]
Simon and Aaran discuss hysteresis and the labor market and the rights part of the market to invest in. (recorded August 21st)
Fed No Longer the “Only Game in Town” for Stocks
US equities are beginning to behave more normally. The average pairwise correlation across S&P 500 stocks has plunged (top-left chart), which tells us that stocks are starting to move independently from one another and are no longer driven to the same extent by...
Structural Inflation Back Drop ==> Buy Dips in Gold
Inflation breakevens have been rising and real yields have been falling this year, boosting gold and silver prices. Gold and silver prices corrected this week and last week as the reflation narrative gained traction, with 10y yields rising to their highest level...
Looming Lockdowns and Wait-And-See Markets [VIDEO]
Tian and Simon discuss VP's most recent Leading Indicator Watch ("Lockdown Lottery") and our August Macro Snapshot. (recorded August 7th)
Lockdown Threat = A Two-Speed Economy and Market
Inequalities that existed before this crisis have been amplified by it. One place where this is prominent is in markets. Interest-rate sensitive sectors are seeing a marked outperformance due to their heightened sensitivity to liquidity. Technology has also benefited...
Company Story
