- The document discusses the outlook for 2015, noting a return of volatility due to slowing global economic growth, a surging US dollar, and collapsing oil prices. This has led to fears of economic trouble globally.
- Central banks around the world are enacting monetary stimulus programs to promote growth and fight deflation in response to falling commodity prices and inflation. The ECB announced a large quantitative easing program.
- A strong US dollar and falling oil prices benefit US consumers but may weigh on business activity and profits. The US consumer accounts for 70% of the economy so 2015 may be better for Main Street than Wall Street.
Capital Markets Industry Insights - Q1 2016Duff & Phelps
Prospective middle-market issuers are being greeted with robust demand from both traditional private credit investors and crossover public market participants. While monetary policy concerns weighed heavily on market participants for much of the first quarter, the Fed’s more dovish posture of recent weeks has triggered an increase in risk appetite across the credit markets.
LBS Asset Allocation August Update - July 28, 2017Mark MacIsaac
Global economic data continue to point to robust and synchronized economic growth with the release of stronger-than-expected ISM surveys, German IFO business climate survey and Chinese Q2 real GDP growth data.
The latest quarterly strategic report that gives a summary of top market trends impacting major spend categories, and gives actionable insights to drive strategic value for your organization.
Financial Wealth Management benefits a basic knowledge of the current economic climate. Download this free report on the state of the economy, government, and how they affect YOU.
Capital Markets Industry Insights - Q1 2016Duff & Phelps
Prospective middle-market issuers are being greeted with robust demand from both traditional private credit investors and crossover public market participants. While monetary policy concerns weighed heavily on market participants for much of the first quarter, the Fed’s more dovish posture of recent weeks has triggered an increase in risk appetite across the credit markets.
LBS Asset Allocation August Update - July 28, 2017Mark MacIsaac
Global economic data continue to point to robust and synchronized economic growth with the release of stronger-than-expected ISM surveys, German IFO business climate survey and Chinese Q2 real GDP growth data.
The latest quarterly strategic report that gives a summary of top market trends impacting major spend categories, and gives actionable insights to drive strategic value for your organization.
Financial Wealth Management benefits a basic knowledge of the current economic climate. Download this free report on the state of the economy, government, and how they affect YOU.
The global economy is improving overall, with the U.S. and U.K. leading the way. We expect higher GDP growth from the U.S. to support risk assets in the third quarter. We continue to expect a rise in U.S. interest rates in 2014, though eurozone policy may help slow a near-term increase. We favor credit, prepayment, and liquidity risks, which we express in allocations to mezzanine CMBS, peripheral European sovereigns, select EM sovereigns, and interest-only (IO) CMOs.
No bubble trouble; stocks are still reasonably priced. This credit cycle has unique characteristics that continue to make high-yield bonds attractive. Interest-rate volatility poses greater risk than higher rates themselves.
U.S. equities continued their impressive advance, with
no significant declines during the quarter. In Europe, policy changes may function as an important tailwind for growth and market performance. Globally, M&A activity has been on the rise, giving a boost to equity prices across the market-cap spectrum. The current bull market has been significant — in terms of both length and magnitude.
Standpoint: Global Reflation by Kevin Lings STANLIB
Fears of sustained deflation and stagnant growth in the United States and Europe have been replaced by a more optimistic growth outlook as well as concerns about rising inflation. This has driven developed market equities higher, but also weakened major bond markets.
I wanted to pass along our 4th quarter Economic Insights piece that we have just put together. This is a 15 page chart book that reviews market performance and looks at the various events that will impact the markets in the coming months. Of particular note, I think you will find the correlation of the markets and the U.S. election interesting (page 8). We also point out a number of themes (on pages 4-5) that could affect all of our client portfolios. As always, we use a lot of graphs and pictures to try and paint a simple story.
As Fed tapering unfolds, we expect to see stronger growth from developed markets, while emerging markets in aggregate may experience further currency and capital market weakness. In the United States, declining labor participation continues to drive falling unemployment figures, and may harbor the beginning of a wage inflation surprise.
• We expect credit, liquidity, and prepayment risks will continue to
be rewarded by the market in the months ahead, while interestrate
risk remains unattractive due to its asymmetric risk profile.
Signs of inflation will raise the stakes for the Fed’s policy communications. Favorable conditions for leveraged strategies could reverse quickly. Reasonable valuations and the Fed’s policy goals continue to support risk assets.
The global economy is improving overall, with the U.S. and U.K. leading the way. We expect higher GDP growth from the U.S. to support risk assets in the third quarter. We continue to expect a rise in U.S. interest rates in 2014, though eurozone policy may help slow a near-term increase. We favor credit, prepayment, and liquidity risks, which we express in allocations to mezzanine CMBS, peripheral European sovereigns, select EM sovereigns, and interest-only (IO) CMOs.
No bubble trouble; stocks are still reasonably priced. This credit cycle has unique characteristics that continue to make high-yield bonds attractive. Interest-rate volatility poses greater risk than higher rates themselves.
U.S. equities continued their impressive advance, with
no significant declines during the quarter. In Europe, policy changes may function as an important tailwind for growth and market performance. Globally, M&A activity has been on the rise, giving a boost to equity prices across the market-cap spectrum. The current bull market has been significant — in terms of both length and magnitude.
Standpoint: Global Reflation by Kevin Lings STANLIB
Fears of sustained deflation and stagnant growth in the United States and Europe have been replaced by a more optimistic growth outlook as well as concerns about rising inflation. This has driven developed market equities higher, but also weakened major bond markets.
I wanted to pass along our 4th quarter Economic Insights piece that we have just put together. This is a 15 page chart book that reviews market performance and looks at the various events that will impact the markets in the coming months. Of particular note, I think you will find the correlation of the markets and the U.S. election interesting (page 8). We also point out a number of themes (on pages 4-5) that could affect all of our client portfolios. As always, we use a lot of graphs and pictures to try and paint a simple story.
As Fed tapering unfolds, we expect to see stronger growth from developed markets, while emerging markets in aggregate may experience further currency and capital market weakness. In the United States, declining labor participation continues to drive falling unemployment figures, and may harbor the beginning of a wage inflation surprise.
• We expect credit, liquidity, and prepayment risks will continue to
be rewarded by the market in the months ahead, while interestrate
risk remains unattractive due to its asymmetric risk profile.
Signs of inflation will raise the stakes for the Fed’s policy communications. Favorable conditions for leveraged strategies could reverse quickly. Reasonable valuations and the Fed’s policy goals continue to support risk assets.
Mosaic Financial Conditions Index is an effective asset allocation tool, based on the credit markets as a leading indicator for both economy and risk assets.
Monetize your Mobile Applications, from SMS to AppsStefan Costeur
Comizzo presentation
Monetize your mobile applications, from SMS tot Apps
Stefan Costeur, managing director Comizzo
Mobile Convention Brussels, CM Telecom
With a spirit to have "quantum leap" in a better change regarding with business cycle and process for stimulating process under fast running and press the lead time.
The global high yield bond markets have witnessed sentiment to risk-off mode. This has since been partially significant growth and diversification over the last few years aided by the extraordinary monetary policy accommodation provided by central banks across the world. The unprecedented liquidity made available at record low yields has thus led to a significant pick up in both primary market and secondary market activity in the asset class. Banking disintermediation in Europe and regulatory changes in the financial sector further contributed to the deepening and diversification of the high yield bond markets even as emerging market issuances entered the fray.
In this backdrop, Aranca’s special report – High Yield Bonds - The Rise of the Fallen – examines how liquidity concerns have increased with changing regulatory environment, rising capital requirements and declining risk appetite leading to decreasing bond inventories at both banks and other dealers even as corporate bond issuances are at an all-time high.
« Market Perspectives » est notre revue mensuelle des marchés. Elle présente de la façon la plus synthétique possible :
- notre analyse des principaux faits marquants et indicateurs macro susceptibles de dessiner les marchés sur le mois.
- notre vision sur les différentes classes d’actifs
Cette revue sera continument enrichie avec nos indicateurs quantitatifs.
La plupart de nos analyses sont disponibles sur www.finlightresearch.com
Our monthly publication “Market Perspectives” presents a synthetic view of all the asset classes we cover.
The report is composed of six sections covering Macro, Equities, FI & credit, FX, Commodities and Alternatives.
Each section is preceded by a summary of our views on the related asset class.
Most of our publications are available on our web site www.finlightresearch.com
The latest quarterly strategic report that gives a summary of top market trends impacting major spend categories, and gives actionable insights to drive strategic value for your organization.
Advice for the Wise - August 2015
• The investor behaviour, bordering on split personality is probably why it is apt to call our times ‘interesting
• Diversification is not merely ‘sensible’, it is an absolute must
• Equity markets were broadly range bound for the month of July; with mid caps showing better strength compared to large cap stocks.
• Global markets got a scare from plummeting Chinese stocks as large number of local investors had to unwind their leveraged positions on account of margin calls getting triggered.
• The rate-cut cycle seems certain and one can anticipate interest rates to converge with the inflation rate in next 5-6 quarters
Ivo Pezzuto - FEDERAL RESERVE'S RATE RISE. COMING SOON? The Global Analyst Se...Dr. Ivo Pezzuto
This article, written on August 31st, 2015 by Prof. Ivo Pezzuto, predicts that mostly likely the Federal Reserve will hike interest rates at the December 16th-17th FOMC meeting, given the current global economic turbulence and outlook, and that a rate rise will be more likely at the end of 2015 or in early 2016 if the US economy will continue to improve and in the absence of systemic crises.
US Fed rate hike in September 2015: Who will be the top 4 winners and losers?Aranca
The much hyped US Fed rate hike likely to be in September 2015 will mark the end of an era of free money. While it brings the good news that the most powerful economy of the world is back on track and can sustain a rate hike, there may be certain repercussions for the global markets. Here’s our take on who may win, and who may lose.
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
what is the future of Pi Network currency.DOT TECH
The future of the Pi cryptocurrency is uncertain, and its success will depend on several factors. Pi is a relatively new cryptocurrency that aims to be user-friendly and accessible to a wide audience. Here are a few key considerations for its future:
Message: @Pi_vendor_247 on telegram if u want to sell PI COINS.
1. Mainnet Launch: As of my last knowledge update in January 2022, Pi was still in the testnet phase. Its success will depend on a successful transition to a mainnet, where actual transactions can take place.
2. User Adoption: Pi's success will be closely tied to user adoption. The more users who join the network and actively participate, the stronger the ecosystem can become.
3. Utility and Use Cases: For a cryptocurrency to thrive, it must offer utility and practical use cases. The Pi team has talked about various applications, including peer-to-peer transactions, smart contracts, and more. The development and implementation of these features will be essential.
4. Regulatory Environment: The regulatory environment for cryptocurrencies is evolving globally. How Pi navigates and complies with regulations in various jurisdictions will significantly impact its future.
5. Technology Development: The Pi network must continue to develop and improve its technology, security, and scalability to compete with established cryptocurrencies.
6. Community Engagement: The Pi community plays a critical role in its future. Engaged users can help build trust and grow the network.
7. Monetization and Sustainability: The Pi team's monetization strategy, such as fees, partnerships, or other revenue sources, will affect its long-term sustainability.
It's essential to approach Pi or any new cryptocurrency with caution and conduct due diligence. Cryptocurrency investments involve risks, and potential rewards can be uncertain. The success and future of Pi will depend on the collective efforts of its team, community, and the broader cryptocurrency market dynamics. It's advisable to stay updated on Pi's development and follow any updates from the official Pi Network website or announcements from the team.
The Evolution of Non-Banking Financial Companies (NBFCs) in India: Challenges...beulahfernandes8
Role in Financial System
NBFCs are critical in bridging the financial inclusion gap.
They provide specialized financial services that cater to segments often neglected by traditional banks.
Economic Impact
NBFCs contribute significantly to India's GDP.
They support sectors like micro, small, and medium enterprises (MSMEs), housing finance, and personal loans.
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
BYD SWOT Analysis and In-Depth Insights 2024.pptxmikemetalprod
Indepth analysis of the BYD 2024
BYD (Build Your Dreams) is a Chinese automaker and battery manufacturer that has snowballed over the past two decades to become a significant player in electric vehicles and global clean energy technology.
This SWOT analysis examines BYD's strengths, weaknesses, opportunities, and threats as it competes in the fast-changing automotive and energy storage industries.
Founded in 1995 and headquartered in Shenzhen, BYD started as a battery company before expanding into automobiles in the early 2000s.
Initially manufacturing gasoline-powered vehicles, BYD focused on plug-in hybrid and fully electric vehicles, leveraging its expertise in battery technology.
Today, BYD is the world’s largest electric vehicle manufacturer, delivering over 1.2 million electric cars globally. The company also produces electric buses, trucks, forklifts, and rail transit.
On the energy side, BYD is a major supplier of rechargeable batteries for cell phones, laptops, electric vehicles, and energy storage systems.
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Cardnickysharmasucks
The unveiling of the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card marks a notable milestone in the Indian financial landscape, showcasing a successful partnership between two leading institutions, Poonawalla Fincorp and IndusInd Bank. This co-branded credit card not only offers users a plethora of benefits but also reflects a commitment to innovation and adaptation. With a focus on providing value-driven and customer-centric solutions, this launch represents more than just a new product—it signifies a step towards redefining the banking experience for millions. Promising convenience, rewards, and a touch of luxury in everyday financial transactions, this collaboration aims to cater to the evolving needs of customers and set new standards in the industry.
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
1. CurrentThinking First Quarter, 2015
1
2015 Outlook: The Return of Volatility
After a few years of relative calm, the confluence of slowing economic
growth overseas, a surging U.S. dollar and collapsing oil prices has led to a
spike in volatility across all of the major asset classes. Underlying fears are
growing that the global economy may be headed for serious trouble, since
these events have often coincided with unexpected geopolitical risks and
periods of economic instability. However, it’s important to note that the
rising dollar and fall in oil prices provide meaningful benefits to U.S.
consumers, but are likely to weigh on business activity and corporate profits.
With the U.S. consumer accounting for nearly 70 percent of the economy,
2015 may prove to be a better year for Main Street than Wall Street.
BadThings Can HappenWhen Growth Slows
The global economy, already slowed by stagnation in Europe and Japan, is being further hampered by China’s
economy slowing to a 24-year low of 7.4 percent in 2014. China is the world’s second-largest economy, and
continues to grow at more than twice the pace of the world economy. Given its size, the expected gradual
deceleration in China’s growth rate has an outsized impact on the world. The International Monetary Fund
downgraded its forecast for the global economy for this year and next, and pointed to China's slowing
economy as a key factor. The growth risks have clearly increased for China as they attempt to rebalance their
economy after an unsustainably supercharged 5-year building and investment-led growth spurt that fueled an
insatiable level of demand for iron ore, copper and oil. As China slows, the economies of many commodity-
exporting countries as well as China's neighbors are also likely to face slowing growth.
As global growth has slowed, there’s been a pronounced drop in commodity prices and inflation throughout
the world. This has provided cover for a wave of global central banks to initiate monetary stimulus programs
in order to promote growth. Meanwhile, the comparative strength of the U.S. economy has the Federal
Reserve poised to finally raise interest rates later this year. This divergence in monetary policies is
contributing to the rapid appreciation of the dollar versus other global currencies. With many global
commodities such as oil priced in U.S. dollars, we’ve frequently written about how a strong dollar can help to
limit inflation and interest rates; however, the relentless rise in the dollar could lead to another currency crisis.
With over $9 trillion in dollar-denominated debt outside the U.S, a sharp rise in the dollar also raises the debt
burdens for countries with weaker currencies. Historically, a strong dollar has triggered turmoil in emerging
markets, such as in Latin America in the 1980s, and Asia in the 1990s.
Crude Oil (WTI) and Trade-Weighted U.S. Dollar
Source: Cornerstone Macro
2. 2
The high yield market has the reputation of being an
important leading indicator for the stock market as
well as the broader economy. High yield bonds are
both very economically sensitive and provide scant
liquidity during periods of high market volatility.
Given these characteristics, this institutionally-driven
market is considered a good proxy for assessing both
the accessibility and cost of credit for speculative-
grade bonds. As a result, the high yield market is often
referred to as the proverbial canary in the coal mine
for detecting early changes in risk appetite. While no
indicator is perfect, high yield bonds have flashed an
early warning signal in advance of every notable
financial shock over the past 20 years.
Zhengzhou
Due to the shale revolution, bonds in the energy sector now account for 15 percent of the high yield market.
As crude prices collapsed, it sparked the nearly indiscriminant selling of energy bonds that also affected the
overall high yield market. The chart above reflects serious distress within the high yield energy sector, with
the yield spread over U.S. Treasuries (100 basis points equals 1 percent) more than doubling since last June.
The chart below shows that the author’s more broad-based model of financial conditions also reflects a
heightened level of systemic risk. This quantitative model is based on the premise of the credit markets as a
leading indicator for the equity market, but also includes factors such as interbank lending rates, derivatives
and currency volatility. Currently, the divergence between the model and the more credit-sensitive Russell
2000 Small Cap index is flashing a warning sign that stocks are vulnerable to a correction.
Zhengzhou
The Strong Dollar is Hurting the Profits of U.S. Multinationals
200
300
400
500
600
700
800
900
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
High Yield Credit Spread, bps
Source: BofA Merrill Lynch
Energy Sector, High Yield High Yield 'B'
While the sharp drop in oil prices is widely expected to result in a significant decline in earnings within the
energy sector, the strengthening dollar is more broadly impacting the corporate profits of U.S. multinational
companies by driving up the cost of doing business overseas and lowering the value of foreign revenues.
With companies in the S&P 500 deriving approximately 40 percent of their after-tax profits from foreign
markets, many analysts have been aggressively slicing their estimates for corporate profits. Over the past
month, the estimated earnings per share growth in 2015 for the S&P 500 has been sliced from 8.4 percent to 3.7
percent. Stocks may face headwinds from increasingly stretched valuations if profits from domestically
focused companies don’t begin to offset the expected weaker profits of multinationals.
The Canary in the Coal Mine is Flashing aWarning Sign
500
600
700
800
900
1,000
1,100
1,200
1,300-2.00
-1.50
-1.00
-0.50
0.00
0.50
1.00
1.50
2.00
2.50
Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15
Lenox Financial Conditions Index: U.S.
Source: Bloomberg
Lenox FCI, Inverted (L) Russell 2000 (R)
Looser
Tighter
3. 3
A Foreign Central Bank Easing Cycle Has Restarted
During the past six months, the steep decline in
global government bond yields, falling commodity
prices and sharp decline in inflation expectations
have stoked growing fears of deflation among global
central bankers. In response, a wave of 15 foreign
central banks have already enacted some form of
monetary stimulus during the first few weeks of
January to fight deflation and promote growth.
However, the real game-changer was European
Central Bank (ECB) President Mario Draghi’s
announcement of a much larger, more flexible and
potentially more open-ended stimulus package than
the market was expecting. In what is considered
quantitative easing (QE), the ECB will inject at least
€1.1 trillion into the ailing eurozone economy by
purchasing €60 billion per month in bonds (including
sovereign debt) from banks until at least the end of
September 2016. In theory, QE increases the supply
of money, which helps keep interest rates low in
order to boost economic activity.
Following the ECB’s announcement, the euro fell 3
percent versus the dollar, and has now collapsed by
18 percent during the past 12 months. Although the
weaker euro is likely to be the most important
contributor to economic growth this year, the
additional tailwinds from rock-bottom interest rates
and low oil prices should help buy time for
policymakers to enact the necessary fiscal and
political reforms.
Even after the end of the Federal Reserve’s QE
program last October, the aggressive liquidity
injections announced by foreign central banks is
poised to unleash an even larger tidal wave of global
liquidity. The glut of liquidity should support asset
prices as the hunt for yield intensifies.
Lower Gas Prices Are Pumping Up Retail Stocks
Along with an improving labor market, the roughly
50 percent drop in gasoline prices since June has
clearly boosted the discretionary spending power of
consumers. This is allowing a reallocation of
spending into broader areas of the economy. For
example, retail stocks as well as restaurants have
been sharply outperforming the S&P 500 as investors
anticipate higher revenues.
Global Central Bankers Go All-In to Fight Deflation and Promote Growth
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15
10-Year Government Bond Yields
Source: Bloomberg
U.S. Germany France U.K. Japan
1.25
1.50
1.75
2.00
2.25
2.50
2.75
3.00
3.25
Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15
Inflation Expectations
Source: Bloomberg
5Yr,5Yr Forward 10 Year TIPS Spread
80
85
90
95
100
105
110
115
120
125
Retail Stocks vs S&P 500
Source: Bloomberg
Retail - Apparel Retail - Specialty