Archive by Author

Playing for a Bounce

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Over the summer, some groups within the global equity market sold off sharply, leading to the current trends of poor performance and weak breadth. Foreign stocks, cyclicals and value-oriented sectors were the hardest hit. From here, we expect better trends from these groups as they have become statistically washed out. We calculate the percent of […]

Thoughts on the Term Premium

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As many have documented, the main channel of transmission for the Fed’s quantitative easing policy was via the term premium component of US treasuries. As the Fed’s balance sheet doubled from 2010 to 2015, the term premium embedded in US treasuries fell from 2.5% to -75bps. The Fed is now shrinking its balance sheet, which […]

Tale of the Tape: Equity Investors More Concerned About Rising Inflation Than Slowing Growth

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We calculate statistics for all developed and emerging equity markets around the world. For our mid/large cap indexes, we take the top 85% of all stocks in a given region or country and convert all prices into US Dollars. These Knowledge Leaders Selection Universe (KLSU) Indexes form the basis of our investment products. By calculating […]

Has the Storm Passed in the Emerging Markets?

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Stock and currency markets often take their cues from the credit markets, so we find it instructive to keep a close eye on credit spreads and credit default swaps (CDS). Looking at the credit markets in the emerging markets, we think there may be initial signs that the storm that has engulfed emerging market assets […]

Yield Curve Inversion: Not What it Appears

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There has been considerable discussion lately about the slowly inverting yield curve and what it may signal for growth prospects going forward. Commonly used as a proxy for the yield curve is the spread between 10-Year US Treasury yields and 2-Year US Treasury yields. As of this writing, the spread is 24bps, having compressed by […]

CNY Devaluation: Is It Different This Time?

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The Chinese Yuan has fallen precipitously in the last 10 weeks raising concerns of whether China was using the currency as a weapon to preemptively mitigate looming tariffs. A 6% devaluation over the last 10 weeks is a larger move than experienced in 2015/16. The timing and magnitude of the devaluation is suspicious to say […]

EM Capitulation

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Yesterday, someone threw in the towel on EM bonds. The Van Eck JP Morgan Emerging Market Local Currency Debt ETF (EMLC) is the largest and most liquid vehicle to invest in emerging market local currency bonds. In one trade yesterday, someone pushed through a block of 18,841,690 shares, valued at around $320M. Interestingly, the price […]

Which is More Impactful to the US: Crude Oil or China Trade? Can Someone Tell Currency Traders?

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Talk of a trade war with China has recently dominated the discussion in financial markets, overshadowing the other major story playing out in the US economy—normalization of the energy markets. I thought I would answer the question of whether trade with China or oil was a bigger economic issue. Currently the US consumes about 20.4M […]