Tag Archives: 5) Global Macro

The tug of war between extending vs. softening lockdowns continues The dollar remains under modest pressure but we think it will eventually recover; Bernie Sanders has endorsed Joe Biden Europe reopens from holiday today but the news stream remains light; South Africa surprised with an emergency 100 bp rate cut Japan Prime Minister Abe’s approval rating is taking a hit; China’s trade figures for March came in far better than expected The dollar is mostly softer...

What I see is a global collapse of intangible capital that is invisible to most people. It’s only natural that the conventional expectation is a return to the pre-pandemic world is just a matter of time. Whether it’s three months or six months or 18 months, “the good old days” will return just as if we turned back the clock. I think the situation is much more akin to being injured. Since I worked for decades in construction, I’ve had numerous potentially serious...

The fictitious valuation of the stock market will eventually re-connect with reality in a violent decline. No, buy the tumor, sell the news ™ is not a typo: the stock market is a lethal tumor in our economy and society. Buy the rumor, sell the news encapsulates the old traders’ wisdom that markets rise on the sizzle of hope, promises, projections, Federal Reserve pimping (see below), tax cuts, etc. etc. etc., not on the actual steak of sales and profits. Buy the...

By Dara O’Sullivan, Derrick Leonard, and Ilan Solot With many markets still under lockdown and some going out on Easter holidays this week, we continue to see amended trading hours. The most notable change has been in India with a reduction in trading hours, while in Nigeria we saw a small amount of liquidity being released by the Central Bank of Nigeria (CBN). Below are our updates for the week. Please get in touch if you would like further information or to discuss...

It was a relatively good weekend in virus-related news; measures of implied volatility continue to trend lower The dollar is trying to build on its recent gains; investors continue to try and gauge just how bad the US economy will get hit The outlook for oil prices remains highly uncertain and volatile Germany signaled that its stance regarding aid to the weaker eurozone countries remains unchanged; the news stream for the UK has turned negative Prime Minister Abe...

Recall that the initial deaths and related costs are only the first-order effects; policy makers have to consider the second-order effects. Everyone who reckons that the lockdown is needless and more destructive than the pandemic that triggered it has to answer this question: then why did China lockdown half its economy? The reasoning of those who reckon the lockdown is needless can be summarized as follows: 1. The lockdown is based on poorly executed extrapolations...

EM may get a little support from a potential OPEC+ deal to limit oil.  Even if a deal is struck, the impact is likely to be fleeting as the global growth outlook remains terrible.  We remain negative on EM for the time being. AMERICAS Mexico reports March CPI Tuesday, which is expected to rise 3.37% y/y vs. 3.70% in February.  If so, inflation would move further towards the 3% target.  February IP will be reported Wednesday, which is expected to contract -1.2% y/y...

Everyone with any position in today’s market will be able to say they lived through a real Bear Market. In the echo chamber of a Bull Market, there’s always a reason to get bullish: the consumer is spending, housing is strong, the Fed has our back, multiples are expanding, earnings are higher, stock buybacks will push valuations up, and so on, in an essentially endless parade of self-referential reasons to buy, buy, buy and ride the rocketship higher. The classic...

The virus news stream out of Europe has improved a bit The US is already taking about the next relief bill; the Fed continues to roll out measures to address dollar funding issues ADP and ISM manufacturing PMI are the US data highlights Regulators across Europe are asking banks to stop paying dividends; eurozone and UK reported final manufacturing PMIs Japan Q1 Tankan report was released; BOJ tweaked its bond buying program for April RBA minutes were released; Korea...

So here’s an April Fools congrats to globalization’s many fools. The tradition here at Of Two Minds is to make use of April Fool’s Day for a bit of parody or satire, but I’m breaking with tradition and presenting something that is all too real but borders on parody: the wonderful insanity of globalization. Like the famous emperor with no clothing, globalization’s countless glorious benefits have been flogged by neoliberal elites and its corporate media shills with...