The liquidity of an asset is the extent to which it can be bought or sold without affecting its price. In extreme market conditions especially, investors trying to sell illiquid assets may be forced to accept drastically reduced prices to find a buyer quickly (or at all). A lesson learned… Read the article
The last quarter of 2018 saw some significant equity weakness, which came in two bouts:
In October, price weakness emerged in response to rising rate expectations in the US. However, any investors hoping that an abatement of those pressures would support equity markets were to… Read the article
It is easy to lose sight of just how much investors have changed their minds about the global environment this year.
How… Read the article
There’s been some clamour around everybody’s favourite UK-related subject this week: Brexit and politics are once again grabbing the headlines.
Yesterday, the US yield curve became inverted. The yield on three-year Treasuries was temporarily (blink and you’ll miss it) lower than that of their two-year counterparts. This is, apparently, huge.
Many are worried because an inverted yield curve has frequently been a sign of upcoming… Read the article
I received the following chart from a broker earlier this week. It plots the trailing 12-month price return on the US stock market versus a survey of activity in the US manufacturing sector, where a score above 50 indicates expansion and vice versa.
The broker’s conclusion was straight-forward, “if you… Read the article
It is quite staggering how much sentiment on the global economy can change. In the middle of 2016 asset prices suggested that we’d never see meaningful growth again, by the end of 2017 ‘synchronised expansion’ was the order of the day.
Today the prevailing argument is that the world is… Read the article
The summer felt quite volatile, with lots of headlines about trade agreements, elections and the like, as well as some big price moves in Turkey, Argentina, and Italy.
“The world…has witnessed an extensive history of financial bubbles, expanding credit, and subsequent crises…We put inaccurate beliefs at the centre of the analysis of financial fragility”.
One of the major market trends so far this year has been the outperformance of the US equity market relative to most other global regions. But with some identifying US moves as ‘the longest bull market in history’ and a prevailing sense that the US economy is… Read the article