Synchronized global central bank & fiscal policy stimulus in Q2 was breathtaking. Near term, it is stunting the carnage caused by Covid-19, including economic growth plunging at a rate not seen since the Great Depression. It is also an affirmation of the jaw-dropping power of printing money and the impact across asset markets, both explicitly, […]

Why Stock Markets Went Down and Then Bounced Up As the Hammer strategy to combat the Covid-19 virus evolved to prioritize health through physical distancing, whole chunks of the global economy shut down.¹ ¹ See our article Covid-19 – Hammer & Dance Trend Rethink at  https://authenticasset.com/perspectives/ Stock markets gasped, plummeting from peaks around Feb. 20th, […]

The Ghosts of People Past The suppression strategy against the virus is still intensifying more than it is easing. Acting quickly and aggressively with physical distancing brings down the hammer on the transmission speed, the first part of The Hammer and The Dance eloquently described by Tomas Pueyo¹. ¹ https://medium.com/@tomaspueyo/coronavirus-the-hammer-and-the-dance-be9337092b56 The battle against the spread […]

The last quarter of 2019 placed an exclamation point on what was a banner year for risk assets. More defensive allocations to fixed income also performed well, primarily due to a Federal Reserve that engineered a historic pivot from raising rates to delivering three rate cuts. Central banks to the rescue once again! In addition, […]

The Fed Pivot – from Swagger to Stagger Three themes that took root a year ago remain familiar; sluggish global trade exacerbated by China-US trade tensions, evidence of a maturing economic cycle in North America and beyond, and stock market volatility flowing on the Trump news cycle and spiking on unheralded neck wrenching tweets. Noting […]

Windfall to bondholders Interest rates globally have collapsed. US 10-year government bonds now yield 2.0%, down from 2.5% at the end of Q1 2019. Incredulously, 10-year Greek government bonds are also now yielding just 2%, despite having credit ratings that are of speculative grade. These yields look meagre until alternatives are considered. Following the US […]

Is discretion the better part of valour? Often. But not always when it comes to the financial markets. Let’s take a quick tour of the development of the US interest rate markets. It sheds light on the stock market outlook. The chart above is surprisingly insightful. It shows interest rate expectations at three points of […]

Financial markets are tight. Company valuations seem rather full. Several short-term market trends, investing opportunities and pitfalls, revolve around who gets or loses their “free (or discounted) rides”. First let’s pre-load what we mean. In a nutshell, shareholders enjoy free rides when costs that could reasonably accrue to a company, are borne by others. Changes […]

What is a bond? Simple. A bond is a promise to repay in the future.Often with interest along the way.With conditions as easy as they have been over the past decade, a payoff from holding bonds was simple indeed. And now? Not so simple. As monetary conditions tighten, bonds are falling into “deep kimchi”¹.The total […]

Advocating and adhering to a fundamentally pure strain of capitalism is what makes America stand alone. America and capitalism grew up together, with The Declaration of Independence and Adam Smith’s Wealth of Nations both published in 1776. America’s founding fathers positioned individual values and goals as paramount, and Smith laid out how owners of resources […]