E.g., 11-12-2017
E.g., 11-12-2017
We have found 11138 results.
View by: Grid List
Sort by: Relevancy Date
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Towards ECB Stealth Tightening?

    As the eurozone’s economy picks up, the European Central Bank finds itself facing a dilemma. In order not to freak out financial markets and push long-dated yields sharply higher, which could threaten to trigger a new financial crisis, it has promised to continue its quantitative easing program of asset purchases until at least September 2018, and not to raise policy rates until well after the end of those purchases. Yet as inflationary...

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

    Gavekal Research

    Our 2017 Holiday Reading List

    History, far from being over, looms large in this year’s Gavekal holiday reading list. From failing empires in the Middle East to Europe’s ceaseless struggle for dominance and Asia’s inability to bury ghosts, our writers consider how the past is shaping our future. As befits a research firm, we have lots of economics with a tour of the stagnation debate and an assessment of the threats and benefits offered by artificial intelligence. We consider...

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

    Gavekal Research

    Avoiding Equity Duration Risk

    Last week, Louis argued persuasively that investors should shorten portfolio duration in response to the prospect of further central bank monetary tightening, the potential threat of rising inflation in 2018, and the stretched valuations of long-dated assets (see Have We Just Glimpsed Growth Stocks’ Achilles’ Heel?). This goes not just for fixed income investors, but equity investors too.

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

    Gavekal Dragonomics

    The End Of The Preschool Boom

    China’s busy and ambitious parents have driven a huge boom in private preschools, with the number of students roughly tripling over the past decade. But the sector is now clouded by allegations of child abuse, which will only strengthen a shift to tougher regulation and public provision of preschools. For now, the private preschool boom is over.

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

    Gavekal Research

    What the US Yield Curve Really Says

    Since 1968, the US economy has suffered seven recessions, each preceded by an inversion of the yield curve. It thus makes sense to ask if such an upending of the link between time and interest is necessary for a recession to occur. A follow-on question might be whether a recession cannot happen so long as the yield curve shape is “normal”. With the US yield curve flattening by the day Charles seeks to answer these questions.

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

    Gavekal Research

    Asia’s Triple Merit Scenario Lives

    Last week, the Bank of Korea raised its benchmark interest rate for the first time in six years and other Asian central banks seem likely to follow suit. This is not especially surprising given the ongoing global expansion and tightening moves by the Federal Reserve, which have narrowed short-rate differentials for Asian currencies. The worry, as elucidated by Anatole last week, is that such an expansionary scenario threatens the delicate “not...

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

    Gavekal Research

    Turning The Page On The Eurocrisis

    You can be forgiven for having missed yesterday’s not so momentous news that Portugal’s finance minister Mario Centeno is taking over the presidency of the Eurogroup of finance ministers. Yet, look a little closer and this switch may, in fact, signify the end of the eurocrisis and a move onto the next phase of eurozone development.

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

    Gavekal Dragonomics

    The Deleveraging Progress Report

    Can China manage corporate deleveraging without a credit crunch? Leverage ratios improved in 2015 and 2016, but progress has been more mixed in 2017, as companies borrowed more but raised less new equity. In 2018, Thomas expects stable or modestly deteriorating leverage ratios, with slowing growth somewhat offset by recovering equity issuance.

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

    Gavekal Research

    Positioning For US Tax Reform

    What’s not to like about tax cuts? Quite a lot as it turns out. Although the final shape of US tax reform has yet to be settled, there are enough common points between the House and Senate bills to allow Will and KX to conclude that the likely tax cuts will prove inflationary, and could prompt a more aggressive stance from the Fed. Despite some undoubtedly positive macro outcomes, the implications for investors are not exactly bullish.

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

    Gavekal Research

    Strategy Monthly: The Long Cycle Continues

    As equity markets everywhere continue to trade higher, money managers are getting increasingly nervous about how long the rally can last. In December’s Strategy Monthly, Anatole argues that we are still only half-way through a secular bull market that can last through the end of the decade. With further US rate hikes on the cards, barring any nasty surprises non-US markets are likely to outperform going forward. The only fly in the ointment is...

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

    Gavekal Research

    From A Ferrari To A Jeep

    When I turned 70 (I am still struggling with the fact that I now have a “7” handle), the Gavekal partners had the good idea of bringing into the firm some very bright “quants” and giving them a simple mandate: quantify and qualify the various investment rules that I have been using for decades (somewhat sporadically, and often with biases that I myself sometimes struggled to acknowledge).

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

    Gavekal Research

    Equities, The Yen And The BoJ’s Exit

    Last month Bank of Japan governor Haruhiko Kuroda participated in an ECB panel on the importance of communications as a tool of monetary policy. He seems to have taken the message to heart. In the couple of weeks since, scarcely a day has gone by without Kuroda or one of his colleagues on the BoJ’s policy board talking publicly about the “reversal rate”, hinting heavily that the central bank is looking to dial back its ultra-accommodative stance.

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

    Gavekal Research

    Goldilocks And The Ten Grizzly Bears

    Over the last fortnight, Anatole has written lengthy pieces on why he remains structurally bullish and how investors should play this trend. Today, he takes a realistic look at factors that could disrupt his generally upbeat assessment of the global economy and markets. This piece is a journey into Anatole’s darker side.

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

    Gavekal Dragonomics

    The Rental Housing Solution

    China’s government has a new priority for the housing market: boost the quantity and quality of rental housing. As more middle-class Chinese are priced out of top-tier cities, promoting rentals is a new attempt to address housing affordability. In this piece, Rosealea explains the latest policy push and how it will affect property developers.

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

    Gavekal Research

    Have We Just Glimpsed Growth Stocks’ Achilles’ Heel?

    The best scene in HBO’s hit show “Silicon Valley” had brash billionaire Russ Hanneman explain to start-up CEO Richard Hendricks that the first goal of his tech firm should be to avoid booking sales: “If you show revenue, people will ask ‘how much?’ and it will never be enough” (see clip). This scene crystallizes the observation that in recent years investors have been rewarded in spades for loading up on “long-dated assets”. And it has been a...

    4
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Behind Eurozone Credit Growth

    The eurozone credit cycle is accelerating. Data released yesterday showed loans to non-financial companies grew at 2.9% YoY in October, the fastest rate since June 2009, while loans to households were up 2.7% YoY for the third month running. The pick-up in lending to private businesses bodes well for eurozone growth and markets next year, with respondents to the European Central Bank’s bank lending survey indicating that investment and...

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

    Gavekal Research

    India Macro Update: The Pain Before The Gain

    India reports its third quarter GDP tomorrow and in this chartbook Udith and Tom offer their assessment of the economy. They expect the official numbers to show a pick-up in growth due to firms restocking after the rollout of the new Goods & Services Tax and think this trajectory will continue through to next year. They advise investors to stick with richly-valued equities, treat bonds cautiously and not worry too much about a currency...

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

    Gavekal Research

    Video: The Pain Before The Gain

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

    Gavekal Research

    What Retail Apocalypse?

    With so much US retail activity going online, a CNN headline over the weekend asked if this “Black Friday” might be the last. That is good news for the newly-minted US$100bn man at Amazon and bad news for old-style chains like JC Penney, Sears, and Kmart, which face constant downsizing pressure. But what about more broadly for the economy?

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

    Gavekal Research

    A Regime Change For Oil?

    Every US or global recession in the past 50 years has been preceded by a doubling or more of oil prices, but not every doubling of oil prices has been followed by recession. While even US$70/bbl probably does not pose a serious risk to the world economy, any rise above US$70 could spark a combination of inflationary pressure and reduced demand that proves lethal to global financial conditions and growth.

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

    Gavekal Dragonomics

    The Chinese Consumer: Outlook & Trends 2017

    In our annual review of the Chinese consumer, Ernan outlines the short-term outlook and longer-term trends in household spending. This chartbook explains why consumption growth has been a bit disappointing in 2017, why the outlook for 2018 is better, what are the drivers of consumption upgrading, and how the transition to online is playing out.

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

    Gavekal Research

    The Bull Market And The Yield Curve

    Keeping up with a runaway bull is no easy task. Which may explain why so many investors remain unenthusiastic participants: the market is old and increasingly unattractive, but holding back could cost them their careers. Yet, the upward march of global equity markets continues relentlessly (for reasons reviewed in recent articles. Today, some 84% of markets around the world are up over the past 12 months in local currency terms. Historically,...

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

    Gavekal Research

    Not All Bank Recaps Are Created Equal

    A month ago, India outlined a US$32bn plan to fix its publicly-controlled banks’ bad debt problem, sparking a more than 30% rally in their share prices. The plan remains under wraps, but the “round tripping” approach will see deposits lent to the government as recapitalization bonds and then injected back into banks as fresh capital. The question is whether India’s effort is credible enough for banks to both write off debt and have enough...

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

    Gavekal Research

    Don’t Panic Over Chinese Equities

    The A-share equity market suffered its biggest one-day sell-off this year yesterday. But Chen Long argues that conditions in fact still remain benign for Chinese equity investors. The earnings outlook is favorable, the market is cheap by global standards, and international investors are beginning to trim their longstanding underweight.

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

    Gavekal Research

    Fake Brexit? Or No Brexit?

    The British economy since the Brexit referendum is often likened to the suicide jumper who leaps off a 20-storey building, shouting “so far, so good” as he falls past the 10th floor. This comparison is unfair to suicides. The real message about economic performance from the government’s annual budget statement yesterday was “so far, so bad”. While a minority of economists and investors—plus a large majority of Conservative politicians—share...

    10
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    New York Seminar — November 2017

    At Gavekal's November seminar in New York Louis Gave, Arthur Kroeber, Cedric Gemehl and Anatole Kaletsky presented their macro outlooks and investment recommendations.

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

    Gavekal Dragonomics

    A Mixed Report From Steel Country

    This winter's anti-pollution campaign in north China is for real, but it will have a mixed impact on the steel industry. But the pollution campaign also involves a suspension of many construction projects, which will reduce demand. Rosealea's recent field trip to the steel hub of Tangshan suggests that both the supply and demand cuts are beginning to bite.

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

    Gavekal Research

    Investing For Constrained Insurers

    At Gavekal we have a sizable number of European Union insurance companies among our clients. Over the last three months, I have visited more than a few of them to outline my current investment recommendations, for example that investors should buy the Japanese stock market. Typically in these meetings, the investors have listened carefully and then regretfully shaken their heads, saying: “I’m afraid we can’t do it—for regulatory reasons”.

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

    Gavekal Dragonomics

    Towards A Single Asset Management Regime

    For the first time, China is to bring its highly heterogeneous RMB100trn asset management industry under a single regulatory umbrella. New rules published last week promise to increase transparency, curtail leverage and reduce complexity and hidden risks, especially in the booming business in so-called “wealth management products”. However, writes Chen Long, the draft regulations contain a number of omissions, ambiguities and loopholes which, if...

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

    Gavekal Research

    Dodging Late-Cycle Refinancing Risk

    By most generally accepted metrics, the US economy is in the late stages of its cycle and any further overheating raises the chances of a recession. The issue is really one of timing. Will Denyer’s Wicksellian model and my US business cycle indicator are both flashing orange rather than red, suggesting that the US is edging towards the recession frontier, but not yet at it. We have both advised investors to dial back on US risk, but are not much...

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

    Gavekal Research

    Who Needs A Government?

    What would it take to make you put more risk on the table in the final month of a year that has generally produced decent investment returns? It helps to have a synchronized global economic recovery that relies on multiple engines of growth and a US-tested monetary policy framework that seems to work as advertised. Yet the potential for disappointment, starting with US tax reform, appears to be growing. Add to that list an outbreak of political...

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

    Gavekal Research

    How Much Slack In The Eurozone?

    It is a core contention of the bullish view on Europe espoused by Anatole and Cedric that the eurozone’s recovery is running four or five years behind the US economic cycle and that there is still plenty of slack left in the eurozone economy. But is there really as much as the bulls believe?

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

    Gavekal Research

    A Turkish Vortex

    For a country that relies on the kindness of strangers to fund its economy, Turkey, under Recep Tayyip Erdoğan, has been going out of its way to alienate allies and capital providers. Its relationship with the US has been on a downward trajectory for months and things are not much better with the European Union. This matters because the pieces are in place for a classic balance of payments and financial crisis in Turkey. This much is clear from...

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

    Gavekal Research

    Asset Allocation For The Global Bull Market

    On Monday Anatole outlined his fundamental reasons to believe that the world is enjoying a global bull market that still has years to run. Today he reviews the investment recommendations that flow from his thesis, and examines how investors can best play the unprecedented divergence of the US business cycle from the cycles in Europe and the emerging markets.

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

    Gavekal Research

    Living With A Nuclear North Korea

    A special envoy of Chinese president Xi Jinping will head to North Korea in what is being billed as a gesture of solidarity and friendship between the two countries’ communist parties. Coming just days after Donald Trump’s visit to the region, the move appears to give the lie to Trump’s assertion that he successfully convinced Xi to “use his great economic influence” to press North Korea to give up its nuclear weapons.

    4
  • Please login, request a trial or contact our sales team for more information

    Gavekal Dragonomics

    Decent Growth Risky For Bond Yields

    China’s economic data for October confirms that the moderate slowdown in growth is continuing as the housing cycle fades and government spending weakens, even as corporate earnings benefit from higher-than-expected inflation. Chen Long now sees an increasing risk for domestic bond yields in this combination, though it is bullish for equities.

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

    Gavekal Research

    Too Much Forward Guidance?

    It should be an ideal environment for equity investors. Europe yesterday published stronger than expected growth figures for the third quarter, with German GDP expanding 2.8% YoY, and even laggard Italy growing 1.8%. That performance raises the possibility of faster earnings growth even as the European Central Bank is proposing to stretch out its stimulative asset purchases through the third quarter of next year and keep interest rates in...

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

    Gavekal Research

    The Consequences Of Saudi Arabia

    Our new monthly Loser Report aims to identify things that investors should avoid, whether countries, sectors, themes or asset classes. In this second instalment Louis looks at the tumult affecting Saudi Arabia and assesses the ricochet effect across the Middle East and beyond. He wonders whether regional currency pegs could be set to topple and whether a major industry centered in Europe and the US could be a major victim of the shakeout.

    8
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Brexit, The Pound And UK Stocks

    When it comes to Brexit, I suspect that one of the few things about which Anatole and I agree is that the negotiations between London and Brussels have so far bordered on the farcical, and that the internal squabbling within the UK’s governing Conservative Party has hardly been conducive to raising the tone. Beyond that we part company. Anatole believes the Brexit talks are approaching a critical juncture for investors in UK assets—a view he...

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

    Gavekal Dragonomics

    Three Retail Takeaways From 11.11

    It was a busy weekend for China’s online retailers, who reported huge sales numbers for their November 11 promotional events. Alibaba’s aggressive strategy is helping uphold its dominance even as market growth slows, and online retail integrates with offline. In this piece, Ernan cuts through the wave of publicity with three simple points.

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

    Gavekal Research

    Reading China’s Financial Opening

    Over the next five years Beijing says it will progressively relax—and eventually scrap—the restrictions it currently imposes on foreign ownership of Chinese financial institutions. In practical terms, this is unlikely to prove a great game-changer for the industry, but it is still a significant move with positive implications for Chinese equities.

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

    Gavekal Research

    This Is (Still) Not A Peak: It’s A Global Bull Market

    It was almost five years ago that Anatole started to shout loudly that the US equity market had achieved a clear breakout from its more than decade long bear market trading range. His advice has been to stick with the trend. In light of this year’s near across-the-board upward moves in risk assets globally, it would be tempting to back away from this positioning. However, in this piece he argues that the bull market is now going global and so it...

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

    Gavekal Research

    Video: Escaping The Indian Funk

    Udith presented on India during Gavekal's Hong Kong seminar in November. This video also includes relevant excerpts from the question and answer session.

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

    Gavekal Research

    Selling India’s Housing Dream — Part II

    When Indians visit China for the first time, it often comes as a shock: China is more materially developed than they could ever have imagined. And when Chinese visit India for the first time, it too comes as a shock: India is even more chaotic, dirty and materially backward than they had been told!

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

    Gavekal Research

    Audio & Transcript — Gavekal Research November Call

    In our monthly research conference call yesterday, Will Denyer outlined his case that demographic factors explain much of the decline in interest rates over the last 30 or so years. His point is that we are nearing a turning point in the global demand-supply relationship for loanable funds and the overall direction of interest rates should be higher.

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

    Gavekal Research

    Contradictory Signals On US Corporate Credit Risk

    US high-yield spreads have widened by 39bp over the last three weeks. Nevertheless, by long term historical standards, they remain exceptionally tight, indicating that the bond market is pricing in remarkably little US corporate credit risk. That message is at odds with the tale being told by the US equity market, which is signaling that corporate credit risk is on the rise. Only one of them can be correct. There are good reasons to think it may...

    4
  • Please login, request a trial or contact our sales team for more information

    Gavekal Dragonomics

    From Tianjin, Affordable Luxuries

    The surging population of affluent Chinese households is a key global market for all kinds of luxury goods. Foreign brands have done well in this boom, but the market is getting more competitive as local firms up their game. Thomas and Ernan report from Tianjin on two very different companies that are both succeeding in high-end niche markets.

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

    Gavekal Research

    The Truth About Euro-Dollar

    At the time of writing, a five-year zero coupon treasury bond is priced at about 90 while a comparable German zero sells for 101.9. This absurdity reflects the fact that for all the talk of incipient European inflation, German five-year yields are still negative. Hence a fellow buying-to-hold such a German bond today is guaranteed to lose money, at least in euro terms.

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

    Gavekal Research

    Saudi Arabia’s Shifting Sands

    For the last three years the dominant narrative in the oil market has concentrated on the fundamentals of supply and demand. Geopolitical risk has been a minor—and transient—sideshow. All that changed at the weekend, when Saudi Arabia’s 32-year-old crown prince Mohammed bin Salman, or MbS as he is known, exercised his authority as the head of the kingdom’s newly-established anti-corruption commission to take down a broad swathe of the Saudi...

    4
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    A Brave New, New World?

    The traffic has been one-way. Since mid-August, the Philly semiconductors index is up 23%, the Nikkei 225 by 18%, the S&P energy index by 14% and the S&P materials index by 10%. In other words, all “deep-cyclicals” and “price monetizers” are ripping higher. So what to make of this?

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

    Gavekal Research

    All Pomp, No Circumstance

    President Trump’s 12-day trek through Asia promises much pomp and little circumstance. Since his administration has no strategic vision for the region and has chosen to abandon many of the tools of diplomacy in favor of overblown rhetoric and empty threats, there is little chance of material progress on any important economic or security issues.

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

    Gavekal Research

    Equities When The Dollar Declines

    The US dollar has strengthened over the last couple of months. But the relative maturity of the US cycle, the US dollar’s overvaluation, and the prospect for changes in monetary policy stances outside the US all argue for US dollar depreciation over the medium term. Against this bearish backdrop, KX examines the characteristics of equities that tend to outperform when the US currency is depreciating.

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

    Gavekal Dragonomics

    The View Into 2018

    The Chinese economy has experienced a nice cyclical recovery since 2016, but now most forecasters are expecting a loss of momentum in 2018. So how is this slowdown likely to play out? In this piece Chen Long lays out his case for a gradual cooling in both real and nominal growth that will not spook global markets.

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

    Gavekal Research

    The Pain In Spain

    To date, the situation in Catalonia reminds that a political imbroglio does not have to morph into an economic crisis. It all depends on the context. Recent data shows that Spain’s economy has broadly shrugged off the secession drama being played out in Barcelona and Madrid.

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

    Gavekal Dragonomics

    The Politicians Behind A Big Data Boom

    A local politician named Chen Min’er rose to prominence last week with his promotion to the Communist Party’s ruling Politburo. Chen’s main claim to fame is his transformation of Guizhou, one of China’s poorest provinces, into a supposed powerhouse of “big data.” But Chen’s real skill was in using political leverage from his ties to Xi Jinping.

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

    Gavekal Research

    The US Investment Environment

    House Republicans put forward their tax reform bill and Jerome Powell was put up to replace Janet Yellen at the Federal Reserve. On the face of it, this all seems like good news for markets. US firms may soon get a permanent tax cut on domestic earnings and mostly keep Uncle Sam away from their foreign earnings, while the prospect of a Taylor-rule adjustment to interest rates has been dodged as Powell seems set to maintain a path of gradual...

    4
  • Please login, request a trial or contact our sales team for more information

    Gavekal Dragonomics

    Housing & Construction Review 2017

    In her annual overview, Rosealea summarizes the outlook for the housing market and construction activity in China. This concise chartbook reviews the drivers of growth in 2017, digs into the key indicators and explains the core scenario for 2018: a modest correction in housing sales and prices, and a gradual slowdown in construction activity.

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

    Gavekal Research

    Keep Calm And Suck It Up

    The Bank of England is expected to turn tail today by raising interest rates for the first time in a decade. What follows is a particular worry for homeowners, who since 2008 have seen interest payments on mortgages fall by as much as -95% due to 550bp of rate cuts. After all, the specter of a disorderly Brexit looms, businesses are threatening to move out of the UK and economic growth has slowed to a miserly 1.5%. I am relaxed about this...

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

    Gavekal Research

    Debating The Eurozone Recovery

    Over the last two years, Nick and Cedric have held similar views about the eurozone’s economic situation. In recent months, however, they have started to diverge on whether this framework still describes Europe’s situation. The upshot is that while Cedric is bulled up, Nick has begun to think the recovery is running out of road.

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

    Gavekal Research

    A Different Order Of Political Risk

    Investors in big technology companies, both US and Chinese, are waking up to political risk. In Washington yesterday, senators hauled lawyers for Facebook, Google and Twitter over the coals for carrying foreign-funded political advertisements during the 2016 presidential election campaign in contravention of US law. Meanwhile in China, the government is demanding representation on the boards of big internet companies, including Tencent, Alibaba...

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

    Gavekal Research

    Strategy Monthly: How Much Longer For Low Rates?

    For decades fixed income and equity markets have enjoyed a secular bull market, propelled higher by low real long term interest rates, depressed by a glut of global savings. In this Strategy Monthly, Will Denyer updates his Capital Provider Ratio, a powerful demographic tool which indicates that the growth of global excess savings has peaked, and that the glut will soon begin to dry up, with far-reaching consequences for global asset markets.

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

    Gavekal Research

    Selling India’s Housing Dream — Part I

    India’s economy is in a slump, laid low by a chronic lack of investment and weak job creation. How can India both revive growth and generate jobs for millions of low-skilled workers? Tom argues that one answer lies in the construction sector, specifically the mass buildout of affordable housing.

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

    Gavekal Research

    False Dawn For The Dollar — And Oil

    Last week the US dollar broke out of its summer trading range and hit its strongest level against the euro and the yen since July. The Brent oil price broke through US$60/bbl to a two-year high. And even sterling seemed to be on the verge of strengthening beyond its post-French election trading range against the euro. How should investors respond to all these breakouts?

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

    Gavekal Dragonomics

    The Reconstruction Of The Administrative State

    The clear message from the Communist Party Congress is that Xi Jinping has political primacy for the foreseeable future. But what does Xi want to do with all his power? In this piece, Andrew summarizes three of the more concrete policy trends Xi signaled at the Congress. Behind all three is a drive to strengthen the apparatus of the Party-state.

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

    Gavekal Research

    The Unconvincing Pick-Up In US GDP

    US third quarter GDP growth came in on Friday at 3% QoQ annualized, much higher than the expected 2.6% rate. The strength of the headline number sparked optimism that the US economy had successfully shrugged off any negative impact from hurricanes Harvey and Irma, and certainly did nothing to discourage equity investors, as both the S&P 500 and the Nasdaq Composite rode buoyant earnings to new highs.

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

    Gavekal Research

    London Seminar — October 2017

    Anatole argued that the investment environment should remain upbeat given predictable monetary policy and a global cyclical upturn. Chen Long contended that China’s post-Party Congress slowdown should be gradual. Cedric made a bullish case for European equities, while Charles presented Gavekal’s latest artificial intelligence investment tools.

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

    Gavekal Research

    Tapering Without The Tantrum

    Mario Draghi yesterday confirmed the European Central Bank’s decision to opt for a “slower for longer” approach to winding down its quantitative easing program of asset purchases. His announcement outlined a threefold approach to ECB tapering:

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

    Gavekal Research

    Video: After Abe's Election Victory

    Despite poor personal approval ratings, last weekend prime minister Shinzo Abe scored a convincing victory in Japan’s general election. In this short video interview Neil examines what the prospect of five more years of “Abenomics” policies means for Japan’s economy, corporate sector and stock market.

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

    Gavekal Research

    US Equity Exposure For The Late Cycle

    The US equity bull run continues even as the US economy issues an increasing number of late cycle indicators. For investors who want to maintain exposure to the stock market but are getting nervous that the economy may soon turn down, KX examines the characteristics that allow stocks to outperform in the late stages of the cycle.

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

    Gavekal Research

    Bitcoin And Money

    Philosophically, I have often argued that an asset’s value can derive from just two sources. It can be scarce like a jewel, or useful like a tool. It is customary to measure these values using “money”, which offers a unit of account, a medium of exchange and a store of value. When “national money” forms the backbone of a banking system, it is usually guaranteed by a central authority. Yet, the real question about money has always been whether it...

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

    Gavekal Research

    India’s Sly Bank Recap

    So here’s a conundrum. As finance minister, you preside over a slowing economy with banks and corporates that have giant holes in their balance sheets. You may have stellar demographic “tail winds”, but private sector investment has stalled. Your headache is a gaping fiscal deficit and a credit rating one notch above junk status. You notice, however, that your banks are flush with cash.

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

    Gavekal Research

    After Xi’s Coronation

    China’s Communist Party concluded its conclave with a decisive validation of Xi Jinping’s personal leadership, granting him a status and authority unmatched by any Chinese political figure in recent history, and setting the stage for him to exert that power for many years to come.

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

    Gavekal Research

    Corporate Japan’s Cash Mountain

    Shinzo Abe’s thumping victory in Sunday’s Japanese general election set the seal on the local stock market’s unbroken run of gains. AfterAbe’s Liberal Democratic Party and its Komeito coalition partner together secured a comfortable two-thirds majority in Japan’s lower house of parliament, Monday saw the Nikkei 225 close higher for an unprecedented 15th day in a row just whisker short of a 21-year high.

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

    Gavekal Dragonomics

    Unmixing The Signals Of The Industrial Cycle

    China’s business cycle indicators are sending mixed signals in 2017: PMI surveys show a steady acceleration, even though housing is cooling, while the official indicator of industrial value-added has been strangely volatile. In this piece, we clear up the confusion, and show that industry is indeed tracking the gradual slowdown in construction.

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

    Gavekal Research

    The Curious Case Of European Optimism

    This weekend saw Madrid announce emergency measures over Catalonia, upping the chance of a declaration of independence being made in Barcelona. Yet despite the worst Spanish political crisis since the 80s, markets have mostly shrugged. After eight years viewing all glasses as half-empty, investors in eurozone assets have since the Brexit vote seemingly turned into congenital optimists.

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

    Gavekal Research

    The (Austrian) Empire Strikes Back

    The weekend’s news hardly bolsters confidence that Europe’s technocrats are in competent command of the continent’s political situation. In Spain, hundreds of thousands took to the street to protest central government rule over Catalonia. Meanwhile in unofficial referendums, millions of citizens in two of Italy’s wealthiest regions voted overwhelmingly in favor of greater political and fiscal autonomy from Rome.

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

    Gavekal Dragonomics

    The Housing Slowdown Stays Contained

    China’s housing downturn is here: September data showed nationwide property sales declining for the first time since 2015. But the government’s attempt to cool sales and prices while limiting the impact on the real economy is working. While growth will certainly slow further, this manageable slowdown will not require policy to loosen anytime soon.

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

    Gavekal Research

    Back Away From Buyback Plays

    From a cyclical peak of US$161bn in 1Q16, US corporate share buybacks fell to US$120bn in 2Q17. But although buyback activity is down, it is not out. In the past few weeks companies including Walmart, HP and Allergan have announced new share repurchase programs. The question for investors is whether they should chase these buyback plays.

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

    Gavekal Research

    The New Era Of Chinese Socialism

    In his first term, Xi Jinping has been nothing if not ambitious. So it is not surprising that, in a speech to mark the start of his second term, he announced a series of ambitious goals. It is more surprising that, in Xi’s “new era” of Chinese socialism, the pursuit of national greatness will no longer be centered around economic growth.

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

    Gavekal Research

    Experiences, Not Things

    It is a core Gavekal belief that good money management is more about “avoiding losers” than “picking winners”. Yet sell-side research focuses almost entirely on identifying winners. This leaves an avenue for a small, independent firm like ours to lean the other way and help clients identify “losers”.

    27
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Video: Which Messenger To Believe?

    After Louis wrote up today’s Daily on the strange dichotomy between strong growth and moribund yields, we sat down to quiz him further on how this contradiction gets resolved. In this short video, he explains why the bond market is the thing that will probably have to give.

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

    Gavekal Research

    The Growth And Yield Dichotomy

    Of the 45 economies tracked by the OECD, all 45 are expanding, and 33 are seeing an acceleration in their rates of growth.Simply put, both official economic data and market prices are pointing the way towards economic growth—which probably explains why a “data-dependent” Federal Reserve is intent on tightening monetary policy.

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

    Gavekal Research

    Video: Demographics And The Savings Glut

    Slow-moving demographic trends have a big impact on asset prices. For the last 35 years, the age structure of the world’s population has created a global savings glut which has propelled secular bull markets in both equities and bonds. Now that demographic tailwind is fading. In a few years it is likely to reverse.

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

    Gavekal Research

    Japanese Inflation: Hiding In Plain Sight?

    In Gavekal’s latest Strategy Monthly, Charles set out the reasoning that underpins his bullish call on Japan’s economy, currency and equities. In a nutshell, he outlined how Japan is finally emerging from the Fisherian “secondary depression” which followed the economy’s great boom and bust of the 1980s and 1990s. Growth is enjoying its longest sustained run in years. And with the private sector growing faster than overall GDP, corporate profits...

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

    Gavekal Research

    The Savings Glut’s Long Life And Slow Death

    Slow-moving demographic trends have a big impact on asset prices. For the last 35 years, the age structure of the world’s population has created a global savings glut which has propelled secular bull markets in both equities and bonds. Now that demographic tailwind is fading. In a few years it is likely to reverse. In this paper Will introduces a new measure, the Capital Providers Ratio, which relates the impending demographic shifts to the...

    22
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    MV=PQ And Fed Policy

    It’s probably not advisable for the chairman of a macroeconomic research firm to admit this, but the Federal Reserve has me thoroughly confused. My analysis of the likely outcome from a particular central bank policy is often wrong, but I generally have a fairly clear idea of the objective. In the case of Janet Yellen’s Fed, which is preparing to exit its quantitative easing program, I don’t really understand its ultimate aim.

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

    Gavekal Dragonomics

    The Good Kind Of Capital Outflow

    China’s government has been gradually restricting the ability of households and companies to move money out of the country, with one big exception: outbound portfolio investment is actually getting more support not less. As the Connect schemes with Hong Kong ease worries about capital flight, they have become the preferred channel for outflows.

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

    Gavekal Research

    Don’t Count On A Miracle

    Do animal spirits in the US live after all? As profits have picked up, firms’ capital spending has rebounded from contraction territory in 2015-16 to a perky 6.7% QoQ rise in 2Q17. A range of business surveys suggest the trend was sustained through the third quarter. Much is at stake, for if capital spending can break out of its post-2008 range, it is just possible that a productivity surge can follow, lifting underlying economic growth. KX...

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

    Gavekal Research

    Why A Jamaican Outcome Is Best

    Electoral math says there is little alternative in Germany to a “Jamaica coalition” and Angela Merkel has made it clear this is her plan. Investors are unimpressed and have pushed the euro lower on worries that a government comprised of Christian Democrats, Liberals and Greens augurs a more nativist Germany that will turn away from its European partners, and in particular a certain eager beaver in Paris. My initial reaction to the election...

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

    Gavekal Research

    Asia’s Best Story Tops Out

    On the face of it, the Philippines offers one of Asia’s best economic stories. Whatever you think of Rodrigo Duterte’s war on drugs, growth remains decent at about 6.5%, big tax reforms are in the offing and after years of promising action, infrastructure may soon actually get built. This has unfolded with public debt falling from more than 65% of GDP in 2006 to 42%. And yet the Philippine peso has slid -8% since Duterte took office in June last...

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

    Gavekal Research

    A Post-Reform China

    The 19th Congress of the Chinese Communist Party will decide whether Xi Jinping emerges as the head of a more “presidential” system of government, or whether the current collective system holds sway. Either way, Arthur argues that hopes for a new burst of reform in the Congress’s aftermath are probably mistaken.

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

    Gavekal Research

    Audio & Transcript — Gavekal Research October Call

    In yesterday's monthly call Charles Gave outlined his bullish view on Japan. He argued that Japan has exited its long debt trap and is about to start a new cycle that will be substantially driven by capital spending. The fact that corporate Japan is sitting on US$4trn of domestic savings means this expansion can be funded without borrowing and so the risk of an interest rate shock is negligible. He also argued that the Bank of Japan is on...

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

    Gavekal Research

    How To Play A Vertiginous Europe

    Led by Germany, the latest hard European economic data yesterday came in strong pretty much across the board. And with Catalonia’s regional government seemingly stepping back from the brink in its stand-off with Madrid, the euro managed to move higher. So how best to play the European economic recovery—from the inside or the outside?

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

    Gavekal Research

    Japan’s Fiscal Consolidation Deferred

    Kibo no To, the Party of Hope founded last month by Tokyo governor Yuriko Koike, will not win next week’s general election in Japan. And the chances that it will win enough seats in Japan’s lower house of parliament to be invited to join the Liberal Democratic Party of prime minister Shinzo Abe in forming a coalition government are slight; at this stage probably no more than 25%. Nevertheless, Koike’s upstart party is already having an impact on...

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

    Gavekal Dragonomics

    A Restrained Boom In Land Sales

    Even as China’s housing market has cooled, the market for land has been heating up. Land sales to developers are up 10% so far in 2017, after declining for the past three years, and prices are up 50-100%. In this piece, Rosealea argues that such signs of froth are deceptive: land sales are still historically low and developers quite conservative.

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

    Gavekal Research

    A Portfolio For The Monetary Cycle

    Every US recession since the 1960s has been preceded by the combination of a fall in true money supply growth relative to real GDP growth, and a fall in the unemployment rate below NAIRU. In this paper, KX constructs a model portfolio which reduces exposure to risky assets in response to these signals, and finds that it offers investors superior risk-adjusted returns.

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

    Gavekal Research

    Buying The British Bluff

    You have to admire the British for the hand they are playing with Brussels over Brexit negotiations. Press attention may be focused on infighting within the governing Conservative Party, but the key losers in this game of bluff are European Union negotiators, who face the technocratic horror of not knowing who is calling the shots back in London. Far from leaving the British team emasculated, this stance allows it to effectively duck out of...

    10
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    An Odd Bull Market

    When supermarket checkout clerks lecture their customers on the merits of leveraged ETFs, investors can be forgiven for thinking the bull market has finally passed its “shoeshine boy” moment. But although there is no shortage of late cycle indicators out there, Louis argues that for several reasons, the current run-up may still have further to go.

    12
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Trouble With Eurozone ROEs

    Economic sentiment in the eurozone is riding high, probably too high. The European Commission’s industrial and consumer confidence indexes are each close to the peaks they recorded in 2000 and 2007. Such high levels suggest overconfidence rather than rational expectations. Moreover, as far as investors are concerned, there are good reasons to be skeptical about the potential of European equity markets to outperform—largely to do with the...

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

    Gavekal Research

    The Rather Lame US Dollar Rally

    The year is far from over but when the time does come to close the books, it seems likely that the sudden weakness of the US dollar this year will count as one of 2017’s biggest surprises. Most investors started the year with a distinct bullish bias on the dollar, and a consequent bearish bias against emerging markets (an outlook we did not share, see for example our January 19 piece Trump’s Declarations On The Dollar). However, instead of...

    6
Show me: results