E.g., 16-12-2018
E.g., 16-12-2018
We have found 11634 results.
View by: Grid List
Sort by: Relevancy Date
  • Please login, request a trial or contact our sales team for more information

    Gavekal Dragonomics

    Seizing The Moment For Artificial Intelligence

    As the US and China try to position themselves for technological leadership, both are now focusing on artificial intelligence. In this piece, Andrew answers the questions of the moment: What is artificial intelligence anyway? Why does China seem to be doing so well in artificial intelligence? And how should we think about this US-China rivalry?

    1
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Fade The US Dollar Rally

    If a week is a long time in politics, then three months is an eternity in the foreign exchange market. Three months ago, sentiment towards the US dollar reached a nadir after US Treasury secretary Steven Mnuchin expressed his desire for “a weaker US dollar”. Over the following weeks, the US currency duly weakened. But since mid-April the dollar has staged a rally, with the DXY index gaining 3.5% as the market has noted the increase in US long...

    1
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Strategy Monthly: Living With US-China Strategic Rivalry

    A gaggle of US cabinet officials are in Beijing this week for talks aimed at lowering the temperature on US-China trade relations. While there may be an agreement to temporarily delay the huge tariffs each side has threatened to impose on the other, there is no chance of bridging the real rift between the two countries, which arises from China's technological and geopolitical ambitions. A trio of aggressive strategies launched by Xi Jinping...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Dragonomics

    Punishing People, Not Institutions

    The strategy behind China’s financial overhaul is becoming clear. It is helping banks by allowing an extended transition to a new set of rules. But prosecutions of executives are also ramping up. This is the opposite of what some Western countries did after the 2008 crisis: people, not institutions, are paying the price for financial risk-taking.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Why A Curve Inversion Matters

    Investors are increasingly obsessed about the flattening of the US yield curve, leading to talk of the dreaded “I” word. This is not surprising as inversions have usually been followed by a US recession and attendant equity bear market.

    5
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The American Growth Dynamic

    It is clear from data released on Friday that the US economy remains set on an expansionary and inflationary trajectory. Growth in 1Q18 came in at a stronger-than-expected 2.3%, while the US employment cost index rose 2.8% YoY to a high for this cycle. Even as consumer spending comes off the boil, US firms, in what looks like a classic late-cycle pattern, are responding to bottlenecks by investing more in their capital stock. We continue to see...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Europe’s Coiled Spring Currency

    There was a neat circularity to yesterday’s press briefing by Mario Draghi. The European Central Bank was happy to stick with its monetary accommodation as growth data had softened and the euro was pleasingly weaker. Hence, as German exporters go through one of their periodic bouts of angst and confidence readings pull back across the eurozone, the logic runs that the euro could now slide further. This would especially seem to be the case as...

    3
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Portfolio Construction In The Time Of An Inflationary Reserve Currency

    In today’s Daily, Charles argued that the key focus of economic conflict between the US and China may end up being over currencies rather than trade spats. He advised investors to monitor the price of treasuries as expressed in gold to see how that struggle is playing out. In this piece, he tells unconstrained investors how to hedge a portfolio in light of the US dollar being subject to inflationary policymaking. Spoiler alert: the answer also...

    3
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Upcoming Monetary War, With Gold As An Arbiter

    When President Trump was recently asked if he was starting a war in traded goods with China, he countered that the US had lost that struggle 20 years ago. As the US retains a comparative advantage in technology, such arguments have led some to conclude that the world’s two biggest economies will fight their next economic battle in this new theater. That may be true, but for me the real fight will be less about trade than a struggle for dominance...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Dragonomics

    Constructive Make-Believe On The Korean Peninsula

    With North Korea suddenly seeming happy to negotiate with its old adversaries, some analysts reckon the regime is buckling under US pressure. Yanmei says this is wishful thinking. Kim Jong-un probably believes he has achieved nuclear deterrence—and he is most unlikely to relinquish it. China and South Korea just want to avoid a US military strike.

    2
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Why India’s Growth Is Not Jobless

    India desperately needs to create jobs if it is not to squander what may be the biggest “demographic dividend” in economic history. On the face of things, it looks to be blowing that opportunity, as in recent years the size of the workforce has actually shrunk. In this piece, Tom argues that the raw data obscures a picture that while not ideal, is far better than it looks.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Still Bond Bears

    Matching its 2013 peak, the world’s most-watched interest rate—the US 10-year treasury yield—yesterday touched 3%. Concerns are now high that it will soon move higher, perhaps much higher. For perspective, the US 10-year hit 3.75% in 2011, 4% in 2010 and 5% in 2007. In this cycle, we think yields will break above 3% and then march upwards. In short, we remain bond bears and continue to recommend keeping duration short. Today, we want to...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Dragonomics

    Dangerous Dealing Along The Belt And Road

    In countries involved with China’s Belt-and-Road Initiative, there is a growing realization of the risks to signing up for the scheme. As debt has mounted and fears of economic dependence have increased, a backlash has begun. But as Tom explains, the lure of easy Chinese capital is a dangerous habit that many countries will struggle to kick.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Policy And Productivity In The USA

    If President Trump is to accomplish his stated goal of renewing American economic greatness then an absolute requirement is for productivity growth to be pushed above its current miserable level of 1%. To an extent, the economic cycle is helping him, as a tightening jobs market is pushing up wages and creating incentives for firms to add labor-saving capital investments. I would also point to three structural developments, which, although not...

    1
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Emerging Markets And Energy

    We all know, don’t we, what defining characteristics the emerging markets have in common? Of course we do. Emerging markets are developing countries on course to become advanced economies, typically with the assistance of powerful demographic tailwinds. But although they enjoy rapid growth over the long term, their institutional architecture is still under construction. As a result, emerging equity markets are more volatile than those of the...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Dragonomics

    New Jobless Rate, Same Old Problems

    China has moved to rid itself of a longstanding statistical embarrassment, replacing its discredited unemployment data with a new survey based on international standards. But as Ernan explains, the old problems have not gone away: the new jobless rate is still implausibly low and stable, and likely still subject to political manipulation.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    A Japanese Sandwich

    Shinzo Abe played a fair amount of golf with Donald Trump in Mar-a-Lago, but unlike other US allies he got no trade concessions. The talk is again of the Japanese prime minister being a busted flush who may have to resign. Last month, I said such an outcome should not derail Japan’s recovery and corporate prospects (see Abenomics After Abe). The same logic applies to fears of escalating US-China trade tensions upending Japan’s recovery.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Message From Credit Markets

    Over the last three weeks US high yield credit spreads have collapsed by 100bp—a tightening that far exceeds the 10bp narrowing in investment grade spreads over the same period. Coming after a marked widening in the Libor-OIS and Ted spreads over February and March, this fall in credit spreads is clearly encouraging. It supports our contention that the widening of Libor spreads was an idiosyncratic anomaly, and nothing investors should be overly...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Dreaming Of A Better India

    In a year’s time, 900 million Indians will be eligible to go to the polls in India’s general election. Two-thirds of them are likely to cast a vote, including 200 million aged under 30. Youth politics in India matters as nowhere else: the world’s biggest democracy has nearly as many young voters as the rest put together. So what do young Indians want, and who will they vote for?

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Dragonomics

    Keeping Credit Growth On Track

    China’s central bank has tweaked monetary policy to soften the slowdown in credit growth. The RRR cut continues its strategy of managing liquidity to limit the economic impact of the campaign against financial risk. Other data for March still point to a moderate growth slowdown in 2018, particularly given the continued strength in property.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Audio & Transcript — Gavekal Research Call April 2018

    During yesterday’s monthly call, Arthur Kroeber addressed rising geoeconomic and geopolitical tensions between the world’s two biggest economies. He argued that US moves against China ran far deeper than trade tariffs as actors across the political spectrum in Washington were intent on changing China’s basic economic model, something that Beijing will likely fiercely resist. Much of his focus was on the tech sector, which is front-and-center of...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Dragonomics

    A First Step Towards Easing

    The Chinese central bank is no longer in full policy tightening mode. That’s good news for Chinese bank shares. Shortly after government statisticians released economic data for the first quarter on Tuesday, the People’s Bank Of China announced a 100bp reduction in bank reserve requirement ratios. For big banks, this reduces the proportion of their deposits they are required to lodge as reserves at the central bank from 17% to 16%. In gross...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Learning To Love The Loonie

    There are plenty of reasons to dislike the Canadian dollar: disappointing economic data, a frothy real estate market, over-exposed banks, the fact that the Canadian team failed to get either the men’s or the women’s ice hockey gold at the winter Olympics, and a prime minister who dresses up like the Thompson twins when he travels to foreign countries.

    3
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    No Time To Give Up On Europe

    Even as winter descended in January, the economic climate seemed decidedly balmy. Eurozone growth for 4Q17 came in at 2.7% YoY, while the year’s first PMI peaked at a post-2006 high of 58.8. Investors liked the idea of deflation finally being slain and a possible earlier-than-expected normalization of monetary policy. Alas the fun didn’t last as a series of data disappointments punctured an equity rally that had been led by financials. My bet is...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Hong Kong Seminar — April 2018

    At Gavekal’s seminar in Hong Kong this week, Arthur Kroeber, Rosealea Yao and Nick Andrews presented their latest views on the brewing trade war between the US and China, Chinese growth and the property market outlook, and how to capture European growth.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    A Different Analytical Approach

    I have read with great interest the arguments put forward here by Anatole that equities are in a “structural” bull market. Having listened closely to his presentation at Gavekal’s London seminar, I now understand where our main point of difference lies. Anatole argues that we are in a bull market that began in 2013 when US stocks broke above their long-established trading range and which continues to this day (see This Is (Still) Not Peak: It’s...

    5
  • Please login, request a trial or contact our sales team for more information

    Gavekal Dragonomics

    The Changing Language On Leverage

    China’s policymakers have for the first time called for reducing the total debt-to-GDP ratio. This shift has raised worries that monetary policy could get tougher, on top of the tightening of financial regulation that is already underway. In this piece, Long explains that no shift in policy is imminent; if anything, easing is getting more likely.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Future Of Facebook

    For someone infamous for his social awkwardness, Mark Zuckerberg acquitted himself relatively well in his two days of testimony before US Congressional committees. Certainly investors thought so. After sliding -14.5% over February and March, shares in Facebook rallied 5.3% over two sessions on Tuesday and Wednesday. The short term market reaction notwithstanding, Zuckerberg’s public grilling clearly signals that the user-as-product, advertising-...

    5
  • Please login, request a trial or contact our sales team for more information

    Gavekal Dragonomics

    What Inflation Means For Margins

    As China’s producer price inflation cools and its consumer price inflation picks up, one might expect corporate margins to be fattening, as cost pressures wane and pricing power strengthens. In fact, the opposite is true: margins have been fat, and are now getting tighter. In this piece, Thomas explains how inflation really affects margins.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    La France En Grève

    Once again, French public sector workers are en grève—on strike. In the last couple of weeks, railway workers, air traffic controllers and teachers (and their students) have walked out in protest against Emmanuel Macron’s structural reforms. Inevitably such broad opposition to official policy has prompted memories of 1995, and even 1968. But as Cedric explains, times have moved on, and today the public is more ready than ever before to...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    US Budget Deficits And Long Term Interest Rates

    On Monday the Congressional Budget Office published its latest projections for the US economy and government finances, incorporating for the first time the effects of December’s tax cuts. With government revenues set to fall from 17.3% of GDP last year to less than 17% over the next five years, and spending expected to grow from 20.8% to more than 22%, the CBO projects that the US budget deficit will expand from 3.5% of GDP last year to more...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    After Constructive Engagement

    Separating signal from noise in the ongoing US-China trade dispute continues to be a thankless task. Trade war fears rose late last week thanks to an offhand threat from President Donald Trump to impose tariffs on another US$100bn of imports from China. They ebbed early this week when Trump reversed course and said a deal was likely soon, and Chinese president Xi Jinping delivered a speech promising a reduction in automobile tariffs and market...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The New Source Of Market Risk

    Believe it or not, there was good news, as well as bad, from the US markets last Friday. The bad news was obviously Donald Trump’s threat to escalate the trade war with China and the equally aggressive response from Beijing. The good news was the fall in March’s US payrolls growth to just 103,000 from February’s upwardly-revised 326,000. This slowdown has eliminated, at least until after the summer, the risk of an unexpected Federal Reserve...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Why To Buy India’s Battered Banks

    India’s central bank surveyed the landscape and yesterday painted an upbeat picture. It argued that the investment cycle may be turning, while inflation, the sub-continent’s constant bugbear, is becalmed. With Indian equities off -6% in 2018, this would seem a decent reentry point. The problem is public sector banks, for even as a US$32bn recapitalization is rolled out and bad debt is cleaned up, investors remain spooked by an outlandish scandal.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Reasons To Buy The Dip

    After spending many years as Gavekal’s equity permabull, I joined Charles and Louis last December in warning of the risks to what was then a roaring, and accelerating, bull market. But my way of thinking about these risks was rooted in a different analytical framework, and so I have come to a different conclusion about how investors should respond to this latest sell-off (for Louis’ take, see Following Yesterday’s Pullback). With the lows of mid...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Dragonomics

    Video: Making Sense Of China's New Era

    In this lively presentation from our recent London seminar, Tom Miller outlines the dramatic political changes that have been taking place in China. He explains what Xi Jinping’s new status means for economic policy and governance, and how the links between the Communist Party and the state are being strengthened.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    US Auto Sales: No Longer A Growth Driver

    Strong US auto sales in March mask a stagnating longer term trend and rising auto loan delinquencies. Happily, as KX explains, neither has broader implications for overall US consumer demand. Although auto sales may no longer be contributing to US growth, rising bad loans in the sector do not prefigure a wider consumer credit crisis.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Dragonomics

    How Steel Survived The Battle For Blue Skies

    It’s been a wild winter for China’s steel industry, with huge swings in output and prices. The main culprit is the aggressive official campaign to reduce air pollution—and the industry’s creative responses to it. Their back-and-forth has not hurt underlying growth much, but the resulting volatility in steel prices is not going away.

    1
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Ready For A Further P/E Derating

    I see but through a glass darkly. Sometimes, however there are glimmers of light. Four months ago, in early December, I examined the signals being broadcast by the various investment rules I have long followed and concluded that: “While global markets have been stable for the past 18 months, we may soon be entering a period of greater instability.”

    6
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Following Yesterday’s Pullback

    Two weeks ago I looked back at Enron’s collapse in 2001 and asked whether a crash-and-burn at Tesla or Uber would be this cycle’s catalyst for a fundamental re-assessment of business models. But perhaps my sights were set too low, as this roll-over was triggered not by a cash-burning profligate flaming out, but by turmoil engulfing the Facebook gorilla, and by extension the likes of Google and Snap, which rely on “the user being the product”.

    2
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Strategy Monthly: Navigating In Choppy Waters

    With its latest sell-off, the S&P 500 capped two months of volatility by moving officially into correction territory: down -10% from its January high, and below its 200-day moving average for the first time in two years. Is this the end of the long US equity bull market? In this edition of our Strategy Monthly, we offer three perspectives on how investors should position themselves in these more volatile times.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Abenomics After Abe

    It’s been a rough few weeks, both for Japanese prime minister Shinzo Abe and for the Japanese stock market. Reelected just five months ago, Abe is facing growing demands for his resignation after an influence-peddling scandal that has been bubbling away for the last year boiled over with leaks about an official cover-up. In response, Abe’s approval rating has slumped towards 30%, traditionally a level from which Japanese prime ministers struggle...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Video: Can The EM Run Last?

    In this video interview Joyce discusses why profits should drive a maturing cycle in EMs that increasingly favors commodity-focused markets outside of Asia, and the risks to such a benign scenario.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Can EMs Survive A Trade War And Keep Thriving?

    A US-China trade war would disrupt trade, likely drive up inflation and potentially spark a general risk-off move in markets. This scenario would be pretty terrible for emerging markets, but Joyce reckons it is a tail risk and the general outlook remains decent. In this chartbook, she reviews EMs' vulnerability to a trade bust and explains why profits should drive a maturing cycle that increasingly favors commodity-focused markets outside...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Dragonomics

    Macro Update: Centralization Amid Conflict

    In our latest chartbook, Chen Long outlines a relatively positive cyclical economic picture for China, with steady macro policy, strengthening financial regulation, and further political centralization. The risks to this outlook are tightening property policies, a local government funding squeeze and the looming threat of a US-China trade conflict.

    5
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    On Protectionism

    As the US toughens up its negotiating stance on trade, it seems that ghosts from the Great Depression haunt the land. The men of Davos can be heard to intone gravely that President Donald Trump is aping Herbert Hoover, and as in the 1930s, the global economy may go into a tailspin. I am struck that our cherished elites have discovered a form of government intervention that they do not like, especially given their support for so many other “...

    2
  • Please login, request a trial or contact our sales team for more information

    Gavekal Dragonomics

    The Pain Of Power Producers

    The rebound in commodity prices since 2016 has been a boon for much of China’s industrial sector—but coal-burning power plants have been big losers. Coal prices cannot go much higher without causing serious financial distress. This means that policy should now be shifting to favor power producers, by ensuring coal prices do not climb further.

    1
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Don’t Fret About Libor

    A disproportionate increase in Libor relative to other benchmark short term rates over recent months has got many observers flustered. In this concise paper, Will and KX dig down to the cause of the increase, and explain what it does and doesn’t mean for portfolio investors.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Why Aren’t Bond Investors Panicking?

    Once again, the volatility that rocked global financial markets in recent days was at least as interesting for what it didn’t tell us as what it did. Amid growing protectionism, rising rates and fiscal irresponsibility in the US government, the biggest and most important financial market of all—the US treasury market—isn’t bothered.

    7
  • Please login, request a trial or contact our sales team for more information

    Gavekal Dragonomics

    Trade Wars: A China Expert Roundtable

    Last week’s sharp equity market sell-off followed the US effectively threatening China with a trade war. In this report, Arthur, Long and Andrew address China’s capacity to strike back and explore what it means for the relationship between the world’s two biggest economies.

    1
Show me: results