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COVID-19 versus the Policymakers

Jun 22, 2020

6:37 am

• COVID-19 hits new peaks as markets maintain high valuations • Engagement of policymakers leaves markets sanguine about the risks • Equites driven by liquidity and momentum not valuation • The working-off of the government debt mountain is a challenge for the future not for now COVID-19 is turning out to be just another test…

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Has the Fed Cancelled Bankruptcy?

Jun 15, 2020

8:55 am

• The Fed risks creating distorted signals with its bond support program • Hertz in bankruptcy raises equity!! • Investors increasingly have to turn to equities for income even allowing for dividend cuts • Government bond yields below equity yields and inflation “A company for carrying out an undertaking of great advantage, but nobody to…

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Does That Change Everything?

Jun 8, 2020

6:48 am

• Massive surprise on US employment favours risk assets • With waves of powerful policy response still flowing investors will be upbeat • We expect an ongoing rotation into assets that have underperformed • We expect Europe and emerging markets to play catch up • Growth stocks may struggle due to higher long-term interest rates…

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Divergence in Reality

Jun 3, 2020

3:37 am

Global reopening, a ray of hope “Finally!” is the emotion that springs to our minds as large part of the globe shifts gears from managing through a lockdown to re-emergence. Notwithstanding personal fears, just having the option of mobility is a big trigger for the hope of normalcy. But one look at the accompanying chart…

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