/ 14 Dic 2020
What happened last week? Last week served as a reminder that everything that goes up, eventually comes down. Well, most things. Most developed equity markets across the globe closed the week down on renewed concerns about COVID, lack of fiscal support and even BrExit concerns. Trading volumes were light which tells us that the drop had no strong conviction, at best. Our favorite region, Emerging Markets, continued to move higher, despite the small appreciation of the dollar. The strong rebound of Russia and Brazil more than offset the drop in emerging Asia. On the rates front, after a small pause, US inflation breakevens resumed their ascend, even as China printed the first negative deflation number since 2009. The expectation that global inflation could be moving up is the central assumption for most investors in 2021.
/ 8 Dic 2020
What happened last week? Another good week for financial markets worldwide was capped with a weak job report in the US. The 245k jobs created fell significantly short of the 460k expected, but the news served to reinvigorate expectations for a fiscal package before Biden’s inauguration. Once again, bad news turned into good news, and long rates and inflation breakeven jumped on expectations that the economy will eventually heat up. One of the hottest topics among analysts was the optimism reflected in equity markets. The rare reading of 92% of companies in the S&P500 trading above their 200-day moving average serves as an alert that betting against stocks at this moment is a risky strategy.
/ 30 Nov 2020
What happened last week? “Vaccine Monday” continued to help markets. This time, the announcement of AstraZeneca and Oxford University brought hope for another type of immunization. The key differences from previous solutions are the low cost and relative ease of distribution, which could be a significant relief for the poorest nations. Markets reacted positively, pushing the Dow Jones above the 30,000 level for the first time in history. The incoming Biden administration was finally allowed to start the transition, and the announcement of Janet Yellen as treasury secretary was seen as a safe bet. Her previous experience as chairperson of the Fed and her well-known views on policy confirmed that fiscal policy would be mostly accommodative if the republican senate allows. The market cheered again.
/ 17 Nov 2020
What happened last week? Another remarkable week in a remarkable year. The world woke up on Monday to the most anticipated headline of the year – we found a vaccine! Pfizer’s announcement was celebrated with one of the most violent market gyrations ever recorded. Hard beaten sectors such as Airlines, Energy and Financials spiked 16%, 14% and 8% respectively. Some strategies, like price momentum, printed the largest movement ever – down 5.6%, and the widely followed 10-year yield moved 15bps, nearing the 1.00% level. Despite the violent undercurrents, some of the broad indices showed only “moderate” movements, as the S&P500 and the Nasdaq moved to opposite directions.