Category: Macroeconomy

US vs China: Who is Going to Ship more?

Introduction Trade wars and tit-for-tat tariff threats between the two largest national economies should not be expected in a world embracing trade integration and common regulation through institutions such as the World Trade Organisation (WTO). However, this is exactly what we are currently observing in a US-led, politically motivated upheaval against Chinese trade practices, that […]

The FED Model: Illusion or Reality?

The aim of this article is to analyse the popular Fed Model, pointing out its strengths as a descriptive tool but warning investors against its alleged predictive qualities. The Fed Model is a stock valuation approach introduced in the late 1990s. It asserts that the acceptable earnings yield (the inverse of the PE ratio) for […]

Market Recap

United States The post-financial crisis US equity rally this week overtook the 1949-56 run to become the second-strongest bull market in US history. The S&P 500 closed the week at $2,500.23, a new record high. North Korea missile tests and possible Fed balance sheet tightening were ignored by the market, that instead focused on the […]

China’s Return to Dollar Sovereign Bond Issuance

Introduction Chinese Ministry of Finance announced on June 13th that it will issue 14 billion RMB and 2 billion USD sovereign bonds this year in Hong Kong, marking the first issuance of dollar-denominated sovereign bonds after 2004. Major financial publications (including WSJ and FT) have reported this week that the country might launch the issuance […]

The FED and the Balance Sheet: Shrinking the Giant

Trump’s election and his plan of loose fiscal policy put upward pressure on US inflation. In order to cool down the economy on the verge of full employment, FED raised rates in December and March and has promised two other hikes in 2017. Hiking fed fund rates is not the only approach the FED can […]

South Korea and Samsung: an Overview

South Korea macroeconomic overview: a tired tiger? South Korea has been one of the fastest growing economies in the world: in little more than a generation its GDP per-capita went from about $1,778, in 1980, to more than $27,000 in 2015. This astonishing growth brought the country into the Next Eleven: the list of the […]

Is The (CDS) Maginot Line Falling?

Introduction The aim of this article is to analyse the current CDS spread of France with respect to Germany, and propose a profitable strategy for betting on the convergence of the spreads. The article is going to provide a brief introduction on the topic of CDS, followed by a short overview of the political instability […]

US and Eurozone: expectations upside down

It is widely known that the USA and the EU are in different economic conditions: the American economy has risen from the crisis and the FED is tightening the policy, while Draghi, the president of the ECB, declared that they will keep the quantitative easing going. Unemployment in the US is near its natural rate, […]

Trumponomics: Feeding the Bull Steroids

Donald Trump’s economic policies focus on three key areas; protectionism, loose fiscal policy and deregulation. In this summary report, we will give an overview of Trump’s policies before exploring the effects that they have had on financial markets. For conciseness, we will not look at Trump’s immigration policies and plans to ‘clean up Washington’. Protectionism […]

Market Recap 27-11-2016

United States Not really a Black Friday for the US stock market. All the three major indexes continued their rally closing at historical highs and with similar gains. The S&P 500 closed at 2,213.25, up 1.4% from last week, the Dow Jones closed at 19,152.14, up 1.5% while the Nasdaq closed at 5,398.92, gaining 1.5%. […]

Boosting Infrastructure: More Pain than Gain

The rhetoric for increased infrastructure spending as a fiscal stimulus has been particularly popular this fall. Firstly, Mr. Trump in his campaign claimed that he is going “to fix inner cities and rebuild highways, bridges, tunnels, airports, schools and hospitals”. Also, Phillip Hammond, the UK chancellor, in his Autumn Statement last week announced plans to […]

Trumponomics: Profit with Inverse ETFs

This article will introduce an unconventional way to profit when interest rates rise using inverse ETFs. We will show the upsides and downsides of these tools, focusing on how they could be used in today’s American market. Inverse ETFs could be a useful tool to deal with the possible future bear shift in the bond […]

Market Recap 20-11-2016

United States On the week ended November 18th, stocks continued their post-election rally. Investors appear optimistic of President-Elect Donald Trump’s proposed expansionary fiscal policies. The Dow Jones Industrial Average ended a seven-trading-day post-election rally on Wednesday, during which it gained more than 5.7% reaching a new all-time high. The S&P 500 index gained 0.6% to […]

Argentina: A Land of Opportunities?

The focus of this article will be on the Argentinian government debt and potential upsides and downsides it faces. We will examine the attractiveness of their fixed income market by observing the current political situation in the country, the performance of neighbor countries as well as the global economic outlook. The New Government In November […]

Market Recap 13-11-2016

United States In the US, as elsewhere in the world, the markets were driven by the results of US elections. The victory of Donald Trump boosted equity markets. Indeed, The Dow Jones Industrial Average soared to new heights, adding 5.4% for the week which is its biggest weekly gain since December 2011.  S&P 500 rose […]

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