It has been a couple o though weeks for people who think that economics should matter for asset valuations. Therefore, I’ve decided to start a wrap-up on wall street humor. Probably, an effective way to keep sane. I’m already guessing that Wall Street Bets (WSB) on Reddit will be a major supplier: This one on… Read More Wall Street Comic Relief
Summary Tankers were the trade du jour back in April. It was a hit-and-run trade, and now stock prices have corrected heavily. However, it seems that, with all the commotion around negative oil prices, investors have neglected a changing narrative in the industry. Photo: Mark Rain Article also featured on Seeking Alpha Ok, so tankers… Read More Changing The Narrative On Tankers
Summary The Fed’s move to placate the high-yield corporate bond market reinforced my conviction in the gold trade. Gold has performed very well. So well, that we are considering to take it to another level. We reviewed a set of gold producers to understand the most likely to benefit from the gold uptrend. Original post:… Read More Playing The Fed Stimulus With Gold Miners
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