Download PDF USA In a holiday-shortened week, the U.S. market exhibited strength as both the S&P 500 and Dow Jones reached record-high closing levels. With the S&P 500 closing at 5254 points, adding 0.4% and the Dow Jones closing at 39807 points, up 0.1%. This comes, after a better than Read more…
Download PDF Introduction “When I see a bubble forming, I rush in to buy, adding fuel to the fire.” This is a famous quote by George Soros. It probably inspired Jarrow and Kwok to write their paper, Inferring Financial Bubbles from Option Data where they attempt to take advantage of Read more…
Download PDF USA This has been a pretty volatile week for the US market. As in the past, this rally was majorly led by the tech sector. On Monday the S&P 500 reached a new all-time high of 5147 points but still closed the session in red with Apple losing Read more…
Download PDF Geopolitical Context The currently ongoing Red Sea Crisis, initiated as a reaction by the Houthi movement to the Israel-Palestine war, has greatly exacerbated Egypt’s ongoing political and economic turmoil. Most commercial shipping firms have announced their withdrawal from the Suez Canal. As recently as this week, the Houthis Read more…
Download PDF Introduction Following poor harvests in Africa due to bad weather throughout the year, hedge funds have been pouring money into the long trade since last year betting on a continued shortage of supply. Across the two cocoa futures contracts, London and New York, speculators have a total of Read more…
Download PDF Introduction Convertible bonds are a unique way of raising capital which allows investors to convert the security into a predefined number of shares of common stock given by the conversion ratio. Convertible bonds have a long history, dating back to the 19th century when American railway firms were Read more…
Download PDF Introduction Weather conditions play a fundamental role in the dynamics of the world economy, with estimates revealing that nearly 30% of economic activities and an overwhelming 70% of businesses encounter susceptibility to weather-related fluctuations. This substantial impact underlines the critical necessity to hedge the risk associated with weather. Read more…
Download PDF USA This week started quietly for the US markets, with all major equity indices falling slightly while investors were cautiously looking ahead to Thursday’s PCE print, which came out at 2.4%, the smallest annual increase in nearly three years. On Friday, the ISM data revealed a contraction in Read more…
Download PDF A Match made in Heaven In this article, we aim to integrate the momentum and carry factors to devise a strategy that enhances risk-adjusted returns. The underlying concept is straightforward. We seek to avoid positions with negative carry. Even with a momentum signal prompting us to go long Read more…
Download PDF Introduction With the AI trend currently dominating markets highlighted by NVIDIA’s earnings announcement this week, Palantir has gained a fresh breath of momentum over the last year. It has yet to reach its all-time high which was during the meme-stock frenzy in January of 2021 fuelled by redditors, Read more…
Download PDF USA In a strong week for the broad U.S. stock market, equity indexes generally trended upward, except for the small-cap Russell 2000 Index, which was down 0.8% for the week. Both the S&P 500 Index and the Nasdaq Composite Index reached new intraday highs, with the latter experiencing Read more…
Download PDF Introduction China’s economy has embraced growth prospects for as long as we can remember, but it now faces a myriad of systemic obstacles. From inherent problems tied to its aging population and lack of independent institutions, to today’s property and financial crisis, China is now at an important Read more…
Download PDF Introduction Interest rate derivatives (IRD) represent the largest segment of the OTC derivative market. As of June 2023, the global OTC derivatives notional outstanding amounted to $714.7tn as reported by the Bank for International Settlements (BIS). The biggest share of this market is represented by IRD and FX Read more…
Download PDF USA This week in the US, which was headlined by the upcoming CPI print, the markets showed mixed results. The Dow Jones managed to only grow by 0.2%, while the S&P 500 could not outgrow Monday’s opening numbers overall decreasing by 0.1%. NASDAQ experienced even a larger decline Read more…
Download PDF Introduction In 2023, the global economy has exceeded expectations, with projected global GDP growth set to beat consensus forecasts from a year ago. Core inflation has seen a significant drop, plummeting from 6% in 2022 to 3% across economies recovering from the post-COVID price surges. Notably, the US Read more…