S&P 500

Asia’s debt crisis starts to approach its endgame as the yen continues to tumble

Last week, the Japanese yen fell through the US$ : ¥150 level for the first time since 1990. It has now fallen by nearly 50% against the US$ in the past two years. The currency is behaving as if Japan were a 3rd world country – whereas it is actually the 3rd largest economy in the world. Clearly, something is very wrong.

Asia’s debt crisis starts to approach its endgame as the yen continues to tumble Read More

Bond markets reach “The End of the Beginning” as traders finally realise rates will be higher for longer

300+ years of Bank of England data shows that interest rates are typically inflation plus 2.5%. At today’s level, this would imply – US rates would be 3.7% + 2.5% = 6.2%: Japan would be 3.2% + 2.5% = 5.7%: Eurozone rates would be 5.3% + 2.5% = 7.8%; UK rates would be 6.7% + 2.5% = 9.2%

Bond markets reach “The End of the Beginning” as traders finally realise rates will be higher for longer Read More

An Asian debt crisis would shake the global economy, now the ‘Presidential Cycle’ effect is over

The Presidential Cycle is now over. Instead, worries about the recession and the US debt ceiling talks are moving centre-stage. But Asian currency markets are sending a warning signal. A rising US dollar and US interest rates, and a falling yen and yuan, could soon raise the risks of a major Asian debt crisis.

An Asian debt crisis would shake the global economy, now the ‘Presidential Cycle’ effect is over Read More

FT Letters - Jackson Hole comment by Paul Hodges

Today’s financial crisis confirms that “failing to plan, equals planning to fail”

Companies and investors need to invest time now on having a genuine debate about the risks ahead. The regulatory failures of the past few days highlight what can quickly go wrong, if one hasn’t war-gamed out potential risks. As the saying goes, “Failing to plan, equals planning to fail”.

Today’s financial crisis confirms that “failing to plan, equals planning to fail” Read More

Smartphone market confirms major recession underway – 6th consecutive quarter of falling sales

The smartphone market has now been in decline for 5 years. And whilst the Fed would clearly love to get stocks racing to the moon again, history suggests that Apple’s CFO is likely to be right when auggesting that cost control, not innovation, is likely to be key for the future.

Smartphone market confirms major recession underway – 6th consecutive quarter of falling sales Read More

US Supreme Court throws a lifeline to Democrats for the mid-term elections

Social and political issues were always more important than economics before the SuperCycle.  And now they are resurfacing again. Does an individual woman have the right to choose what to do with her body? Or can judges tell her what she can, and can’t do? It is early days, but many women may choose to vote Democrat because of this issue in November.

US Supreme Court throws a lifeline to Democrats for the mid-term elections Read More

Markets will see plenty of rallies, but history suggests the real bottom will be at least 2 years away

The history of the 1929 and 2000 downturns suggests the real pain is yet to come. Housing markets look terribly over-valued around the world, as I noted last month. And US consumer sentiment is at all-time lows. So most company earnings seem set to fall, with more than 60% of US CEOs now expecting to see a recession.

Markets will see plenty of rallies, but history suggests the real bottom will be at least 2 years away Read More

US stocks set for long-term decline as Fed pivots to focus on “Putinflation”

Markets have returned to the 1970s. They have to cope with “Putinflation”, recession, rising interest rates and energy prices – as well as geopolitical and nuclear risk. Unfortunately, today’s traders do not even have the experience of the 1960s as a guide, having lived in a different world for 20 years.

US stocks set for long-term decline as Fed pivots to focus on “Putinflation” Read More

The chemicals industry continues to be the best leading indicator for the global economy

Central banks and investors believed stimulus programs had created a “New Paradigm” where asset prices would always increase. Now they are starting to realise that stimulus is irrelevant against the 3 Horsemen of the Apocalypse – China’s continuing battle with the pandemic, Russia’s invasion of Ukraine, and potential famine as rising gas/fertilizer prices mean farmers can’t afford to grow their crops or feed their animals.   

The chemicals industry continues to be the best leading indicator for the global economy Read More

Time to focus on the danger of corporate and household leverage as “subprime on steroids” comes to an end

The seeming genius of many private equity funds in recent years has been based on this ability to borrow at cheap rates during the ‘up’ part of the business cycle. Now we are heading into the ‘down’ cycle. And the central banks have abandoned Bernanke Theory and are back to worrying about inflation. So today’s excess leverage means many over-leveraged companies will go bust.

Time to focus on the danger of corporate and household leverage as “subprime on steroids” comes to an end Read More

2021 unlikely to see a quick return to ‘business as usual’

Investors have been spoilt in recent years by the absence of risk. 2020 confirmed the ‘risk off’ mode as central banks ramped up their support. But will Wall Street continue in party mood, despite the growing problems on Main Street?

 

2021 unlikely to see a quick return to ‘business as usual’ Read More

What would another 4 years of President Trump’s policies mean?

50 million Americans have already voted in the Presidential election. Turnout is on course to be the highest percentage since 1908. This week we analyse President Trump’s agenda if he is re-elected. Next week, we will look at Joe Biden’s alternative for the country.

 

What would another 4 years of President Trump’s policies mean? Read More

Central banks try to ‘print babies’ to boost consumption

Supply/demand balances are weakening in oil markets, whilst a Fed Governor has highlighted the serious problem that developed in Treasury markets during the March collapse. We also focus on the economic impact of the Perennials – who will provide the majority of US/Western and Global population growth over the next decade.

 

Central banks try to ‘print babies’ to boost consumption Read More