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Gavekal Research
Will Denyer
Feb 25th 2021
Video: Bitcoin—Money Or Snakeoil?
Will Denyer examines the forces behind the eye-watering run-up and eye-popping volatility of bitcoin, and delves behind the near-term moves in crypto-currency markets to ask whether bitcoin and its ilk will ever gain traction as a unit of account, means of exchange or store of value.
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Gavekal Research
Will Denyer
Feb 24th 2021
It’s A Policy-Driven Market
US bond yields are rising as the growth outlook is boosted by the vaccine roll-out and sustained monetary and fiscal stimulus. US value stocks and the sectors hit by Covid restrictions are ripping. Growth investors, in contrast, are spooked about this situation, as much of their worth comes from earnings discounted far into the future. The investors' reactions to Federal Reserve Chair Jay Powell’s Congressional testimony on Tuesday reminded...
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Gavekal Research
Yanmei Xie, Will Denyer, Tan Kai Xian
Feb 10th 2021
Webinar: The Economic Impact Of A New Era
Vaccines, fiscal stimulus and cheap money are working together to bolster the outlook for growth and inflation in the United States. The US is also under new leadership with new priorities. Our US team of analysts explained what this all means for the economy and asset markets.
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Gavekal Research
Will Denyer
Feb 09th 2021
US Inflation Has Many Fathers
As the economics adage goes, inflation happens when “too much money chases too few goods”. This is an oversimplification but it does contain a core truth: the monetary price of goods is dictated by supply and demand factors that impact both the goods in question, and money itself.
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Gavekal Research
Will Denyer
Feb 08th 2021
Will Stimulus Cause US Overheating?
The US Democrats are declining to cut the size of their stimulus proposals enough to secure bipartisan support, and are instead proposing to push the bulk of their US$1.9trn package through Congress using the reconciliation process (see The State Of Biden’s Stimulus). Their determination has raised fears that pressing ahead with such a large fiscal stimulus at a time when the US output gap appears to be closing fast could prove uncomfortably...
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Gavekal Research
Will Denyer
Feb 05th 2021
After GameStop
Yesterday saw Treasury Secretary Janet Yellen chair a meeting of US financial regulators to assess the fallout of recent frenzied trading in “meme stocks”. There is unlikely to be a Dodd-Frank type response to this episode but a new administration may be motivated to act decisively. Yet the effect of GameStop may go wider, so consider the effect on the four key actors in the saga.
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Gavekal Research
Will Denyer
Jan 25th 2021
A Tactical Turn In The Dollar?
Neither the United States nor the European Union got off to a flying start, but the US is out front with its vaccination program. This points to longer Covid disruption in Europe, which—in the short term—should support the US dollar versus the euro. Yet, in the longer term there remain many reasons to underweight the dollar, certainly against cheaper “risk-on” currencies.
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Gavekal Research
Louis Gave, Anatole Kaletsky, Will Denyer, Arthur Kroeber
Jan 22nd 2021
Webinar: Global Investment Roundtable, January 2021
A Democratic US administration is set to control all arms of the US government for the first time since 2010. Will this mean a fiscal blowout, causing big changes in the pricing of treasuries and the US dollar? Louis, Anatole and Will assess the possibilities.
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Gavekal Research
Yanmei Xie, Will Denyer
Jan 15th 2021
Biden’s Spending Plan
In a speech late Thursday, US President-Elect Joe Biden called on Congress to approve an additional US$1.9trn of federal spending to tackle the Covid-19 pandemic and support the US economy. If approved, Biden’s package will bring US government stimulus spending since the start of the pandemic to more than US$5trn. Heavy on support for households, Biden’s proposal would avert the risk of a first quarter contraction in the US economy and prime the...
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Gavekal Research
Will Denyer
Jan 11th 2021
The Road Ahead For US Yields
Friday’s US labor market figures showing a surprise 140,000 contraction in December’s non-farm payrolls emphasized just how tough the winter months are going to be for the world’s largest economy as coronavirus infection rates and resulting hospitalizations continue to accelerate. Yet the grim near-term economic outlook notwithstanding, the first week of 2021 saw inflation expectations push higher, with the 10-year breakeven inflation rate...
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Gavekal Research
Will Denyer
Jan 11th 2021
Bitcoin, Gold Or Fiat?
Governments and central banks are giving users of fiat money reason to consider alternative mediums of exchange and stores of value. And it seems entirely possible that Bitcoin can rally even harder than it already has. But are there the makings of a good money? Because if the answer is “no”, then bitcoin is running on fumes.
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Gavekal Research
Yanmei Xie, Will Denyer
Jan 06th 2021
The Senate Upheaval
With some trepidation, Yanmei and Will offer their view on the economic consequences of Georgia, assuming that the Democrats have indeed secured a wafer-thin majority in the Senate. While the fiscal restraints will now surely be released and tax hikes are more likely, the real winners of this election will be centrists in the Democratic Party, who in effect wield veto power over its more liberal instincts.
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Gavekal Research
Will Denyer, Vincent Tsui, Thomas Gatley, Udith Sikand, Cedric Gemehl
Dec 04th 2020
Webinar: Global Investment Roundtable, December 2020
The US equity market is seeing a switch from the winners of the pandemic like technology and online retail, to the beaten-up losers such as travel plays. At the same time, hopes for a strong economic recovery in 2021 are juicing up value stocks. Similar dynamics are being seen in other major markets. Our team of analysts discussed what happens next, and what’s in store in 2021.
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Gavekal Research
Will Denyer
Dec 04th 2020
Video: The Treasury’s Liquidity Programs And Markets
US Treasury Secretary Steven Mnuchin has come under fire for failing to extend a number of the Treasury’s liquidity support programs into 2021. But as Will outlines in this short video interview, while the existence of the facilities that are set to expire helped to shore up sentiment back in March and April, they have been little used, and are now largely irrelevant in practical terms.
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Gavekal Research
Will Denyer
Dec 01st 2020
Strategy Monthly: Two Equity Rotations For A Post-Covid World
The impending rollout of vaccines in the United States is spurring two big equity rotations. With investors looking ahead to a post-Covid world, a rotation has begun from stocks that thrived in the pandemic to those that merely clung on. Second, the expectation that a robust economic recovery will push interest rates up has caused beaten-down value stocks to recover some mojo. Investors should play these rotations at a granular, sub-sector level...
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Gavekal Research
Will Denyer
Nov 25th 2020
Two Equity Rotations In The Making
Investors are bulled up on hopes that successful vaccine roll-outs will end the Covid-19 pandemic before next spring and the US will get a smooth transition of power that leaves an investor-friendly divided government. Since Pfizer announced its successful stage-three vaccine trials on November 9, managers have been forced to reassess their US portfolio positioning. That process has likely only just got going.
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Gavekal Research
Will Denyer
Nov 12th 2020
Time To Look Beyond The US
Heading into the US elections, there were three big reasons to be bearish on the US dollar. With the results as they stand, one of those concerns has diminished. But the other two continue to weigh on the US currency. Meanwhile, the US equity market is looking extremely expensive compared with equity markets elsewhere. Together, these factors favor unhedged positions in selected non-US equity markets.
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Gavekal Research
Will Denyer
Nov 12th 2020
Video: Politics And Pandemics—The US After The Election
The last week has seen two big developments affecting the US economy and markets: effective confirmation that Joe Biden has won the presidency, and a surge in hopes for the early rollout of a coronavirus vaccine as infection rates continue to accelerate. Will examines how the last week’s news affects the US growth outlook, and outlines what it means for US bonds, equities and the dollar.
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Gavekal Research
Will Denyer, Yanmei Xie
Nov 06th 2020
US Election Points To A Bullish Result
The US election is tilting towards a denouement but a categorical result may not be known for weeks. That uncertainty is not good for Americans’ nerves but should not especially trouble investors. More impactful will be policy changes (or maybe the lack of them) that flow from the result. US equities, and growth stocks especially, have been buoyed by the chance of a Joe Biden presidency and split Congress.
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Gavekal Research
Anatole Kaletsky, Arthur Kroeber, Louis Gave, Yanmei Xie, Will Denyer
Nov 05th 2020
Webinar: The 2020 US Election
With the US election outcome likely subject to a period of litigation and some uncertainty, yesterday Gavekal partners and US analysts convened to discuss the possible scenarios lying ahead and what they're likely to mean for asset markets.
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