“Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair” Sam Ewing Inflation is an elusive phenomenon which is sometimes dubbed a “hidden tax”, eroding purchasing power and returns. This article is the first in a series of Read more…
In mid-September, there has been a liquidity crisis in the money market of secured overnight borrowing. We have analyzed this in an article published one month ago, headed “Liquidity Squeeze: What is the Repo-Scarcity Premium?”. Since then, the Federal Reserve proceeded to inject more than 230 billion over the period Read more…
The use of Copper and Gold Can commodities help us predict future interest rate movements? In this article, we will analyze the relationship between the spot prices of copper and gold and the ratio between them to predict future interest rates. Copper is used in the majority of industries such Read more…
US U.S. markets were slightly higher last week as Q3 earnings season spurred some optimism, but global growth concerns limited it. The S&P 500 was up 0.4% w-o-w, closing at 2,986 points, while the DJIA fell 1%, ending at 26,770. The Nasdaq Composite decreased 67 points (0.8%) to 8,089. On Read more…
US The Dow Jones Industrial Average closed at 26,816.59 on Friday recording a weekly gain of 0.91%. The S&P 500 closed at 2,970.27 up 0.61% w-o-w. Both these figures are the result of a particularly bullish market on Friday with gains equal to 1.42% and 1.32% respectively. Indeed, the Federal Read more…
Introduction Quantitative Easing is not a new economic phenomenon for most of the developed economies. Federal Reserve started its first Quantitative Easing program in November 2008 by purchasing $600 billion in mortgage-backed securities, before 2008 the Federal Reserve held between $700 billion and $800 billion of Treasury Notes within its Read more…
Introduction On Sunday, October 13, Poles will vote in parliamentary elections for the 10th time since the first partially free elections in 1989. In this article we aim to provide political and economic background of Poland, economic policies of the competing parties, as well as an analysis of investors’ expectations Read more…
US The Dow Jones Industrial Average closed at 26,573.72 on Friday recording a weekly loss of 0.9%. The S&P 500 closed at 2,952.01 down 0.3% w-o-w. These numbers outline a 3rd straight week of negative returns for US equities. The US market was primarily impacted by 3 key data releases Read more…
Equity put-option writing strategies represent an alternative to attain equity-like returns with less volatility. In fact, by writing a put-option the seller collects the option premium and gains exposure to value changes in the underlying equity. The Chicago Board Options Exchange (CBOE) publishes already since 2007 daily return data for Read more…
Projecting growth of earnings and revenues has always been bread and butter of equity analysis, with equity research departments deploying state of art models and tools in order to gain an advantage in forecasting the high growth industries. However, as 2019 certainly has been for many investors a year of Read more…
Pension funds are key investors in the market, with around $27.6tn in assets as of 2018. In this article, we will present a brief overview of pension schemes and funds around the world, with a focus on the challenges that pension funds will have to face in the near future. Read more…
Even those of us who don’t check commodity prices were probably keen to see the spike in oil prices at markets open on Monday, September 16th. While the drone attacks on the facilities of Saudi Aramco and their consequences are still present in the news, in this article we want Read more…
US On Monday, the US registered stronger than expected manufacturing and composite PMIs while a weak service PMI. In the same day, the FED injected about 50bn $ in the financial system through REPOs following last week spike in short-term borrowing costs. The FED continued its intervention in the REPO Read more…
US Fannie Mae and Freddie Mac are once again back in the spotlight, with American treasury secretary Steven Mnuchin proposing to reform and recapitalized these government enterprises. The Fed has cut rates by 25 bps to a range of 1.75% – 2%, in line with market expectations while resisting the Read more…
In a world of excessive liquidity, where open market operations by central banks are ineffective, unconventional and unheard-of monetary policies need sometimes to be applied. In this article we will briefly discuss of the overnight interbank lending market in Europe (and changes in how its respective index is calculated) and Read more…