Mid-Quarter Update: The Monetary Policy Pitchfork

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The big three central banks (Federal Reserve, European Central Bank and the Bank of Japan) met this week to review their monetary stance. In this mid-quarter update, we share our analysis, The Monetary Policy Pitchfork. Summary: After a decade of emergency monetary policy, the major central banks are starting to normalize policy. The Federal Reserve […]

A Reflationary Inflection in Oil Inventories

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Venezuela has experienced a collapse in oil production this year as the country sinks into chaos. Daily production is down from 1.7M barrels/day at the end of last year to just 1.44M barrels/day at the end of May. Year-over-year production declines are even larger, down about 500k barrels/day. Production peaked in October 2015 at 2.38M […]

Fed Tightening Doesn’t Fully Explain EM Financial Market Weakness

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This week financial market participants were delivered a cogent explanation for the weakness in EM stocks, bonds and currencies by India’s central bank governor, Mr. Urjit Patel. In Mr. Patel’s opinion, the US Federal Reserve’s tightening of monetary policy (most specifically balance sheet shrinkage, or the allowance by the Fed to let maturing bonds roll […]

Divergent Path of US Corporate Profits

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Yesterday we got the latest glimpse into US corporate profitability. Depending on the series observed, corporate profits are either flat-lining or rising. Before-tax corporate profits, the blue series in the chart below, are actually net down by $32 billion from the peak in 2014. Yet, after-tax profits are up about $130 billion from that same […]

Geopolitics Update: Trade War, Tariffs & the Coming Tech Implosion

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As the Trump administration’s on-again, off-again trade war with China continues to create uncertainty for investors, we sat down with geopolitical strategist Peter Zeihan to learn more about the tariff program and what it could mean for the US economy. Similarly, we discussed the changing outlook for Silicon Valley technology firms — especially Tesla, Facebook, Twitter […]