Photo credit: Sam valadi The world is becoming increasingly faster, and so do markets. However, this seems to be getting a bit extreme. The market went from total euphoria in February to extreme depression in March, and now, at the beggining of April, it seems ready to come back with a vengeance. In February, the… Read More Is this a bull market in the making?
Picture credit: Federalreserve One thing is for sure, the Fed under J. Powel is a very different beast. Yes, his predecessors started the unconventional monetary policies that have become the norm. However, Powel has brought it to a whole different level by nationalizing the whole credit market (not the whole, but close). From an economic… Read More This is a game changer: The Fed is buying Junk
Summary Assessing the duration of the lockdown is the real key to understand the impact on the economy. Industries a with high proportion of fixed costs will be more vulnerable to a long stint. We assess the possible impact of the lockdown on US automakers. Make no mistake. The current crisis will be life-threatening to… Read More Who’s going bankrupt? Assessing The COVID-19 Impact On US Automakers
Photo credit: Federalreserve The credit market will be pivotal during the current crisis. In 2008, we had a problem in the credit market (Subprime mortgages), which made financial institutions move into credit tightening mode. Soon, that start cascading into the real economy. The current environment inverts that relation. The problems start with the real economy… Read More Keep an eye on the corporate credit market during the COVID-19 crisis
Source: Philip Taylor Gold underperformance during periods of panic is not new. If you look at the great financial crisis, you’ll see that the same happened then. The gold price peaked in July and then went on to lose 27% of its value. Source: Seeking Alpha More interestingly, gold then started a rally until 2011.… Read More Gold underperformance during panics is not new
Below, I share a video made by Bridgewater staff. The video is already a bit old (recorded on February 26, 2020). However, I think it does a great job explaining the social and economic impacts of the COVID-19 pandemic. It’s really worth seeing.
Summary A couple of weeks ago, I proposed that the virus would make an impact on the economy, and, by default, on the complacent market. Now, it seems like the virus is spreading out of China, and the biggest world economies are activating the debate around stimulus. Big organizations will likely get access to the… Read More Coronavirus Might Just Turn Into A Quantitative Tightening Event
Summary The virus seems more contagious, but less fatal than the SARS 2003 outbreak. The fact that it might be more contagious increases the likelihood of negative economic impact. With the stock market near all-time highs, we wonder if investors will maintain the confidence from end of 2019. Photo credit: Eelke The year has started… Read More Thoughts on the Coronavirus, and its impact for investors
Jim Rogers is one of my biggest influences in the markets. Although I am not a contrarian, I like his contrarian instinct. He is very commonsensical, making justice to his Southern roots. In the interview below, he talks about global economies and shares his vision about the next few years. His narrative hasn’t changed much… Read More Jim Rogers on Global Markets
Summary The auto industry has been dealing with compressed earnings multiples for some time now. The market identifies traditional automakers as value traps. Automakers will need to break into growth segments of the industry to invert the perceptions. The new Ford Mustang Mach-E might be Ford’s answer to that problem. Note: Originally published on Seeking… Read More The Mustang EV Might Be Ford’s Ultimate Multiple Decompressor