The first quarter of 2021 is at an end, and while this year started much as 2020 ended, there is reason for optimism. Winter is over, and the weather is improving (for subscribers in the northern hemisphere), while the distribution of vaccines in most countries is (finally) well underway. Stock markets generally performed well in the first quarter. While we acknowledge these positive developments, we cannot help but continue to be concerned about a raft of potential catalysts....
This line, borrowed from the great song by the Buffalo Springfield, seemed an apt title for this month’s introduction, given the significant moves by markets this past month that have suggested a host of new or potential trend changes set against a backdrop of unusual uncertainty.The global geopolitical backdrop, which we continue to see as being an important influence on investment returns through the decade, remains troubled as 2021 nears. In the United States, Donald Trump has contested the election result as....
As we write this, Joe Biden has just pulled into the lead in Pennsylvania and now seems assured of becoming the next President of the United States. Donald Trump has reportedly stated that he will refuse to concede, which creates the possibility of Secret Service agents having to bodily carry him from office in January so that Biden can assume the presidency. It is a sad commentary on our times that the last sentence is not completely facetious....
This issue will be largely concerned with the Coronavirus both for its anticipated role as a catalyst for substantial market volatility and the lingering misperceptions about its nature. Our comments this month are by necessity more short-term in their orientation than is typical because of the emergence of the Coronavirus. Its effects will almost certainly be significant and will, in turn, influence the performance of capital markets once the pandemic passes. Investors’ response to this threat will play a material role in determining their long-term investment results....
The decade is starting on a positive note for investors, with most global equity markets ending 2019 on a bullish note. Supporting further upside for markets is, as we have discussed in these pages, an apparent commitment by central banks and governments as they implement both monetary and fiscal measures to support the global economy and postpone the next recession. There is a great deal of concern by central banks about the potential severity of the next recession/bear market, given the fragile underpinnings of the global economy. We can, therefore, expect....
The major challenge facing global economies and capital markets is how to cope with the current slowing of the world economy in an era when central banks, having largely used their traditional tools in addressing the financial crisis of 2008 and its aftermath, have a diminished capacity to combat a recession. How the current long-lived economic expansion will be extended, given the tenuous nature of the global economy and markets, has been much on our mind. We believe we have identified the strategy that will be used to avert a recession in the short-term and provide capital markets with one final leg higher....
Several converging issues should make the headlines this month, with Brexit being top of mind for your editor. The deadline of March 29th is fast approaching, with markets reflecting a belief that an extension to negotiations will be sought, with the possibility of a second referendum being held. This outcome was discussed in past issues and still seems the most likely. However, one shouldn’t discount incompetence on the part of the May government and a “hard” Brexit with no deal remains a possibility. We reiterate our view that it remains premature to take meaningful positions in either the FTSE or the pound until after a resolution to the deadline....
