Arculus Funds Management

he exodus out of the US dollar has begun. There are three factors at play…

Last week calm returned to markets although there has been no real change in US policy outcomes, yet. We are 30 days into the 90-day pause and constructive developments around trade policy negotiations have been piecemeal and provisional at best. Meanwhile, the US and China have been more restrained insofar as there has been no … Read more

The 90 day tariff imposition freeze announced last week certainly helped to stabilise asset markets, but it did not trigger a material recovery in either the bond market or the various equity indices. A lot has been written about the increased volatility of all asset markets over the past fortnight and investors need to remain … Read more

The markets have now entered an irrational phase with a level of panic that we have not seen since the GFC.  Long term readers of our material will remember, that on many occasions, we have referred to and quoted the movies ‘The Big Short’ and ‘Margin Call’. These are worth watching again in the weeks … Read more

Australian Budget Last week we pointed out that the assumptions on which the budget is based are more important than most realise. The Federal Budget assumption of steady unemployment, steady inflation, steady economic growth over the forward years may be convenient but, in all likelihood, will be wrong. There is a base assumption in the … Read more

Last week there was a great deal of media coverage regarding Metrics. We have not studied this company to understand their products well enough to comment, however, we do have some general observations on the private credit sector.

Beyond the obvious impact – a sharp equity market sell-off – there is a more subtle connected impact when the markets fall like a knife.  Single stock volatility, a function of idiosyncratic (specific) risk, relative to index volatility is rising sharply. In basic parlance the domination of the Mag 7 has masked the increase in … Read more

Interest Rates US bond rates reversed the recent trend over the past month after Chairman Powell mid-Friday indicated the Fed can be patient in determining its next course of action and that the economy was stable. This was despite an earlier softer payrolls report that had moved rates lower. At close Friday, the 10-year treasury … Read more

We have just had another interesting week dominated by Trumps antics in the White House. Putting aside the Trump theatre, the market appears to have reached the remarkable conclusion that the DOGE and now Congress cuts to fiscal expenditure will trigger an economic contraction – even in the March quarter of 2025. The word ‘absurd’ … Read more

Words fail me when asked to explain what the RBA was thinking, but here is what the media have reported: RBA interest rate cut: governor Michele Bullock says the board weighed up both sides. But did the Reserve Bank deliver the first cut in more than four years because it should have, or because it … Read more