12 Years of VP vs Noise
Sharing the ideas and experiences that have influenced our work
Elections Come and Go
The US presidential election on Tuesday is currently the number one event risk for US equities. But investors should focus on two more important underlying themes: positioning and reflation. Markets haven’t whole-heartedly embraced the reflation trade as money...
Don’t Fear the Rise in Yields
The last few weeks have seen US yields breakout to the topside of the tight range they have been trading in. The market narrative is that yields have been boosted by more clarity on the US election - a Democrat win with a mooted $3.5 trillion stimulus package in the...
Too Big to Care
The antitrust report published last week by a House of Representatives subcommittee has set the wheels in motion to tackle anti-competitive behaviours in Big Tech. We think it has little immediate effect for investors today, but the risks are mounting....
Turkey and Hungary’s Harbinger Hikes
Given the scale of demand destruction in the wake of the global health pandemic, central banks should be nowhere near tightening monetary policy. For those that are, policy rate hikes are indicative of intensifying currency stresses and risks of a destabilising...
ECB’s Focus Shifting to Bank Lending
The ECB has repeatedly stressed the primacy of its PEPP asset-purchase program in tackling the economic impacts of Covid, despite the importance of the bank-lending channel for the European economy, given the high degree f financial intermediation. The decision taken...
What They Will Do vs What They Should Do
Governments are becoming very concerned about the resurgence in virus cases seen since summer. In context, the rise in cases should not be too alarming. More testing means more cases will be found, and the relatively high false positive rate for the most common tests...
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 -...