Treasury yields suggest the US economy is approaching a peak


Current low term premium for US Treasury bonds suggests US economic growth is near peak The yield curve and term premium estimates are useful for the forecasting of future returns from bonds. In addition, identifying the macro drivers of bond returns helps to detect trend reversals in the economic cycle… Read More »

Buy European banks on Italy news


Reasons to buy European banks stocks continue to mount. We are seeing heavy demand for single names as news that a deal has been negotiated to wind up two failed Italian lenders. Under the agreement, Italy’s largest retail bank Intesa Sanpaolo will acquire the remaining performing assets of collapsed Popolare… Read More »

Good deal for Intesa-Sanpaolo, happy end for Italian banks


Yesterday, the Italian government approved the emergency rules for BPVicenza (BPVI) and Veneto Banca (VB). The Decree provides for total €17bn amount of resources potentially mobilized to liquidate the lenders. Burden sharing and state aid The government tried for months to rescue the two banks, but the effort ended on… Read More »

Corporate Profits Flirting With Recovery

Laurence Taylor -

Despite great expectations of economic recovery over the past few years, corporate earnings growth has been in relatively short supply. Having rebounded strongly after the financial crisis, global earnings per share (EPS) improvement trends have been muted or poor since 2011. As equity markets and equity valuations have been spurred… Read More »

Attention towards Healthcare and Brexit


The market turned its short attention span towards Donald Trump and his secret health care bill that was just revealed to the world yesterday. Many experts say that this bill has no chance of becoming a law but that didn’t stop healthcare stocks from raising the roof on the stock… Read More »

A better risk-reward with a strong focus on risk


In an environment of continued low rates, investing in short-dated bonds makes a lot of sense. High yield is specifically of interest, as it tends to do well in times of rising rates. Still, high yield bonds also bring higher risks. Managing default risk and selecting issuers with the utmost… Read More »

China A-Shares Added to MSCI EM Index


What does the addition of China’s USD 7.7 trillion domestic equity market1 into MSCI’s emerging markets benchmark mean for global investors? If Wuliangye Yibin or Shanghai Pudong Development Bank don’t ring a bell to investors outside China, that is about to change. After four rounds of review since 2013, the… Read More »

Is VIX the next market blunder?

James Butterfill -

The VIX index is currently demonstrating a complete absence of fear. In the context of current world affairs and political instability, we believe this is demonstrating a worrying complacency amongst investors. Changing course after failureThe VIX index, coined as the fear index, is currently demonstrating a complete absence of fear.… Read More »

Rates: Where’s the Drama?


The Federal Reserve raised short-term interest rates as expected, but things could get a bit more entertaining as the year progresses. In each of the prior three rate hikes since the end of 2015, we saw some suspense surrounding potential action from the Fed, whether because of nervousness as to… Read More »