Recent months have seen a noticeable flight from U.S. stocks, driven by investor fears over the resurgence of Trump-era economic policies. With trade tensions flaring and tariff ramifications starting to be felt, investor confidence has plummeted. Trump’s confrontational trade stance and unpredictable policymaking have injected a new wave of uncertainty into the markets, prompting investors to … 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
We have constantly communicated to clients since the start of this year, the first quarter / first half of 2025 was going to be volatile (see below) and therefore we had safeguards in our portfolios. This view hasn’t changed and to state the obvious is playing out. We would recommend clients to continue exercising a hold and … 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
In February, this year, investors became increasingly worried about the growth trajectory of the U.S. economy. The market recently increased its probability of a recession in the U.S which has driven a notable correction in the U.S. equity markets in February & March. We note that the U.S. market makes up more than 70% of … 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