Category: Macroeconomy

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 […]

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