E.g., 21-11-2019
E.g., 21-11-2019
We have found 2272 results.
View by: Grid List
Sort by: Relevancy Date
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Big Questions For 2018

    Many of the important questions confronting investors at the beginning of 2018 are the same as they were 12 months ago. And in most cases I would suggest the same answers. This may seem boring or stubborn, but it is quite reasonable in the middle of a long term economic expansion and structural bull market.

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

    Gavekal Research

    The Most Indebted Country?

    One of the arguments long advanced by die-hard bears is that the US is “the most indebted country in the world”, and therefore heading irreversibly for economic disaster. Often they reach their conclusion by summing US current account deficits over the years, or by looking at how much US government debt is owned by foreigners. Sometimes they even dig a little deeper and unearth something called “the US net international investment position”,...

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

    Gavekal Research

    US Tax; Not What You Expect

    With the Senate having voted its approval, Republicans are set to tomorrow finalize the biggest shake up in the US tax code since the 1980s. A common refrain among analysts is that the bill should propel equity prices higher, but do precious little for economic growth. We wonder if the reverse may unfold.

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

    Gavekal Research

    Cui Bono?

    Today, with European growth humming along and Beijing having (again) shown an ability to keep China’s economy on a sustained expansion path, no one seems fazed about a possible economic downturn. Apart from the UK (where the obsession is Brexit), concern centers on geopolitical risks. Yet depending on their region, investors are worrying about very different things.

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

    Gavekal Research

    The Questions For The Coming Year

    The apparent glide path into year-end suggests that 2018 should offer up more of the same seen in 2017. Louis does not rule out a continuation of this “Goldilocks” scenario, but worries that global inflation could be brewing in unexpected quarters at a time when frenzied trading in speculative assets such as bitcoin produces countervailing responses from policymakers. In this wide-ranging tour across the investment landscape he asks whether, in...

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

    Gavekal Research

    Audio & Transcript — Gavekal Research December Call

    In Gavekal Research’s monthly conference call yesterday Anatole Kaletsky outlined five reasons why investors can be optimistic that the current bull market will continue for years to come. His bullishness is moderated by three broad risks.

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

    Gavekal Research

    There Is Now An Alternative

    There were no surprises yesterday, either in the Federal Reserve’s rate hike, or in its forecasts for next year. With the labor market set to “remain strong”, the unemployment rate likely to inch down to 3.9%—full employment—and growth forecast to get a modest boost from tax cuts to 2.5%, the dot plot projects three 25bp hikes in 2018.

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

    Gavekal Dragonomics

    CEQ: China 20/20

    In this final issue of China Economic Quarterly, an all-star cast of contributors takes a look back at how the country has changed since 1997, and a look forward at how China, and its global impact, might evolve in the next couple of decades. The basic lesson is that it has never paid to underestimate China’s growth potential and capacity for change.

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

    Gavekal Dragonomics

    Pax Americana-Sinica

    China’s rise is making it increasingly costly for the US to uphold Pax Americana in Asia. China wants to replace it, but scant regional enthusiasm means Pax Sinica is some way off. For the next two decades, an uneasy truce should hold in Asia.

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

    Gavekal Research

    The Bitcoin Bubble Changes Shape

    All the talk about crypto-currencies, initial coin offerings, distributed ledgers etc. feels a lot like discussions on carnal knowledge in a high school boys’ locker room. Everyone is talking about it. Yet almost everyone’s experience is extremely limited. And it is likely to stay that way for the time being, because for all the talk, very few of those doing the chattering are actually getting any action. So what is there left to say about the...

    7
  • 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...

    2
  • 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 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

    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

    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

    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

    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

    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

    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 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

    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 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

    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 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

    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

    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 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

    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 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

    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

    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

    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

    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 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

    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

    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 Cycle And The Structure

    This bull market has been driven not by conviction, but a belief that in a zero-interest world there is no alternative to equities. Yet with global growth picking up in a seemingly coordinated fashion, commodity prices rising and bond yields firming up, does that condition still hold? Louis thinks that many investors’ “barbell” strategies could be extremely vulnerable to a change in the investment environment that may now be unfolding.

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

    Gavekal Research

    The Return Of Alpha?

    This week’s obsession seems to be whether the big reflation trade is back on, heralding a shift in the investment environment. Louis will address this question in a piece to be sent later today, but it is worth noting another important morphing of the investment milieu: that actively managed funds are handily outperforming passive index funds.

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

    Gavekal Research

    No Closer To Effective Tax Reform

    The much-anticipated US tax reform plan from “the big six” (officials from the administration, House and Senate) has landed. What a disappointment it is. The ball has barely been pushed forward at all. It thus seems unlikely the US will get major tax reform. And if it does, it is likely to be much less effective than the plans previously proposed by the House Republicans.

    9
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Real Story With US Inflation

    While hardly ranking as a hawk, Janet Yellen yesterday restated her view that inflation remains a worry. The Federal Open Market Committee as a whole may have last week nudged its 2017/18 inflation forecasts lower, but Yellen continues to argue that weak pricing pressures are transitory. The corollary is that the Fed should stick with its gradual monetary tightening plan. This places her slightly at odds with policymakers like Charles Evans, who...

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

    Gavekal Research

    EM Can Handle Fed Fallout

    Yesterday, the “world’s central bank” confirmed that it will reverse its quantitative easing policy and likely raise interest rates in December and then three times in 2018. On the same day, the benchmark emerging market index nudged higher and is only a whisker off a six year high. Ordinarily, Federal Reserve tightening is terrible news for EMs, especially for those economies with the temerity to simultaneously try policy easing. Yet this is...

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

    Gavekal Research

    QT And The Treasury Quandary

    The Federal Reserve has confirmed that quantitative tightening will begin next month as it gradually lowers its holding of treasuries and mortgage-backed securities. For investors, the question is whether they should “fight the Fed” by owning assets that are now out of favor with the central bank. I would argue that such a formulation is wrong and these are good times to be mitigating risk by picking up treasuries, probably of shorter duration.

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

    Gavekal Research

    Reviewing My Calls

    Over the years my research has focused on broad concepts which have been applied in many situations and lots of reports. These include ideas such as the disruptive power of platform companies, assets whose value comes from scarcity rather than efficiency, or the effect of firms running on Schumpeterian, Malthusian or Ricardian principles. Once in a while, however, I do get specific and make investment calls. Having had a little time this week, I...

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

    Gavekal Research

    Any US Profits Rebound Lacks Legs

    US equities have rallied to new highs on a favorable liquidity tide, buoyed by hopes for coordinated global growth. But they have also been given a leg-up by an apparently improved US profits outlook, as shown in the second quarter national accounts data. There are, however, compelling reasons to think that an uptick in profit margins cannot last. As 59% of value added by US non-financial corporates went to their workers in 2Q17, these center on...

    0
Show me: results