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Gavekal Research
Arthur Kroeber, Will Denyer, Louis Gave, Andrew Batson
Jun 30th 2020
Webinar: Global Investment Roundtable, June 2020
Yesterday Louis Gave, Will Denyer and Andrew Batson joined Arthur Kroeber at the Global Investment Roundtable. They discussed the economic growth and market situation in the US, the state of the Chinese recovery, and what a post-Covid-19 world might look like.
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Gavekal Research
Will Denyer, Tan Kai Xian
Jun 29th 2020
From Bullish To Neutral
There has been a lot of talk about how the rally in US markets has been driven entirely by irrational sentiment. We disagree, and have since late March argued that the rebound in risk assets was rational. Our assessment rested on four financial and economic pillars. Today a reexamination of these pillars suggests a moderation of our bullish stance.
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Gavekal Research
Will Denyer
Jun 26th 2020
What's US$1.6trn More Or Less?
As three months ago, the prime case for holding US risk assets is the liquidity support provided by policymakers. But while liquidity conditions remain extraordinarily easy, and will continue to do so as long as inflation expectations remain depressed, in one respect at least the potential of surplus liquidity to push asset markets higher may have been exaggerated.
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Gavekal Research
Will Denyer, Tan Kai Xian
Jun 17th 2020
The US Consumer Has Legs
Another day, another upside surprise from the US data. For investors, the key question is whether this recovery will continue, or whether May’s bounce-back in consumption will prove a one-off flash in the pan, extinguished by a second wave of infections and long term unemployment. Happily, there are good reasons to expect the consumption recovery to have legs.
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Gavekal Research
Will Denyer
Jun 09th 2020
A Fed Reality Check
Ahead of the FOMC meeting that concludes Wednesday, there has been a growing volume of chatter that the Federal Reserve is moving to scale back its easing measures. The talk has been further amplified by May’s surprisingly strong employment report, with some commentators even warning of an imminent taper tantrum in the markets.
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Gavekal Research
Will Denyer
May 29th 2020
Excess Money And Where To Find Value
US cash balances have exploded in recent months and at some point a portion of this “excess” is likely to be deployed into financial markets. That may help push asset prices up further, but Will argues that fairly extreme valuations mean not all asset classes will rise together.
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Gavekal Research
Will Denyer, Tan Kai Xian, Yanmei Xie
May 21st 2020
Webinar: US Outlook (May 2020)
In yesterday's webinar, Will Denyer, Tan Kai Xian and Yanmei Xie joined Simon to discuss the outlook for the US and answer viewer questions as the country tries to return to normal after Covid-19 lockdowns.
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Gavekal Research
Will Denyer, Tan Kai Xian
May 18th 2020
The Upside For Autos And Housing
As the US begins to reopen for business, some segments of the economy will bounce back faster than others. Among the more vigorous will be the auto and housing sectors, where activity will be lifted by a favorable combination of tailwinds. Investors should consider positioning for a strong recovery in both the automobile and residential construction sectors.
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Gavekal Research
Tan Kai Xian, Yanmei Xie, Will Denyer
May 11th 2020
Breasting The Trough
The apparent divergence between the stock market and economic reality continues to widen. Equity investors are focusing on the expected effects of the Federal Reserve’s massive liquidity injections once states emerge from lockdown. The risk to this rosy view is that the easing of restrictions could cause an infection increase so severe that new lockdowns are imposed.
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Gavekal Research
Yanmei Xie, Will Denyer
Apr 22nd 2020
The Fiscal Fix
Barely a month after launching a US$2trn rescue package, the US is poised to release yet more fiscal stimulus to tackle the economic fallout of the Covid-19 crisis. The Senate has passed legislation to top up funding for a small business loan program and the House should follow suit on Thursday. Will this latest cash injection be enough to stop massive bankruptcies? Probably, but the program will remain a messy work in progress in need of more...
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Gavekal Research
Will Denyer, Louis Gave
Apr 22nd 2020
Webinar: Outlook For The US Economy And Global Markets
In Tuesday's webinar, Will Denyer reviewed the economic situation in the US and suggested how investors should position their portfolios, and Louis Gave presented his global macroeconomic view, taking into account the remarkable developments in the oil market.
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Gavekal Research
Will Denyer
Apr 09th 2020
Video: The US Economic Response
The US government has promised unprecedented support to individuals and businesses who face loss of income as a result of Covid-19. Will Denyer weighs the measures to see if they will be enough to sufficiently limit the economic damage wrought.
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Gavekal Research
Will Denyer
Apr 09th 2020
This Is Not A New Monetary Era
Central banks across the developed world are cranking up their printing presses to buy huge amounts of public debt that is being issued to support companies and individuals. The worry is that this causes high inflation down the track, or that it means the fiscal and monetary management functions of governmens are merging. The way I approach this issue is through two simple questions.
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Gavekal Research
Andrew Batson, Rosealea Yao, Will Denyer
Apr 07th 2020
Webinar: Looking Through The Lockdowns
Andrew and Rosealea discussed China’s slow return to normal, the state of the property and construction sector, and warned of the global demand shock China will face due to Covid-19. Will outlined his view on asset allocation in light of the shock to the US economy and the asset price adjustments that have taken place so far.
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Gavekal Research
Will Denyer, Nick Andrews
Apr 06th 2020
The Atlantic Divide
Second order economic effects from the Covid-19 outbreak are ripping through industrialized economies, with soaring unemployment, shuttered industries and a fall in corporate profits. While China has eschewed large-scale government support, Europe and the US have adopted massive fiscal and monetary responses. These Western initiatives do, however, differ in key respects and when lockdowns finally end, one or other approach will likely have...
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Gavekal Research
Yanmei Xie, Will Denyer, Tan Kai Xian
Mar 30th 2020
Is US$2trn In Fiscal Support Enough?
Will the US$2trn fiscal packiage prove big enough? The initial market reaction might have suggested that it won’t. However, if extreme lockdowns last no longer than a month or two, the fiscal package may well succeed in its twin objectives of averting mass business failures and preventing a big rise in long term unemployment.
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Gavekal Research
Will Denyer
Mar 26th 2020
The Case For Corporate Bonds
Although the US spread of Covid-19 continues to accelerate, in the near term markets have been encouraged by promises of heavy fiscal support for the US economy and the Federal Reserve’s plans to take risk off private sector balance sheets, including by buying corporate debt. Is now the time to increase exposure to risk assets?
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Gavekal Research
Will Denyer, Yanmei Xie
Mar 24th 2020
The Importance Of The Fed’s Big Guns
On Monday, the US Federal Reserve rolled out some of its heaviest artillery. In a move reminiscent of the moves in March 2009 which finally succeeded in stabilizing markets, it both relaxed accounting rules for banks and launched a whole suite of programs designed to take risk off private sector balance sheets, including by buying corporate bonds.
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Gavekal Research
Udith Sikand, Will Denyer
Mar 19th 2020
The Dollar Squeeze Intensifies
Policymakers in the world’s biggest economic blocks are responding to the current crisis with fiscal and monetary “shock and awe”. Yet even as the much maligned European Central Bank joined the asset purchase party, markets have continued to crater. For all the coordinated economic responses to the coronavirus pandemic, there has been no serious effort to free up the offshore market for US dollars.
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Gavekal Research
Will Denyer
Mar 16th 2020
The Fed’s ‘Whatever It Takes’ Moment
While other US government agencies tackle the coronavirus crisis, the Federal Reserve has promised ample liquidity and functioning credit markets. Its “whatever it takes” plan is to ensure that US dollars are available at home and abroad, US credit markets remain liquid and solvent companies and individuals are not stopped out.
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