/ 11 Nov 2020
US Scenario and Elections. In this special edition of The Weekly Globe, our strategists will share their opinion about the impact of the US elections in their views. By and large, we all acknowledge the importance of this historic election, and its implications on people’s lives in the US and worldwide. However, we will once again remind our investors that the US economy continues to be a potent growth engine, capable of self-healing at astonishing speed, and presidents alone have limited reach when it comes to altering the course of supply and demand. We are, of course, vigilant and curious about changes in policy and allocation of resources by the new administration. Still, we have set our view on the next drivers of asset prices long before the US election took place.
/ 3 Nov 2020
US Election Day is Here. The US election outcome will probably shape the global economic scenario for the next two years. That is because the alignment of powers which will come out from the election will dictate how much fiscal stimulus will be possibly enacted in the US going forward. There is a strong case for more fiscal stimulus in developed countries. The increase in new COVID cases in Europe and the US will probably put aside long-term concerns regarding public debt sustainability. Until a vaccine is largely available, many economic sectors will continue to be negatively affected by pandemic containment measures and so will be GDP growth.
/ 19 Oct 2020
As more than 600 million people in China traveled earlier this month for the Golden Week Holiday and Chinese domestic air travel now is tracking up year-over-year, we thought it would be interesting to look at what companies could benefit when things re-open further in the US and Europe. Both the US and Europe are facing near-term spikes in case levels and concerns are that winter will bring even more cases. Hopefully testing, treatment and vaccine options could lead to life returning closer to some level of normalcy in 2021 or 2022.
/ 14 Oct 2020
Has the time for Small Cap Growth arrived? We have shown previously how both the 'secular' trend for the USD is negative (the NET National Savings rate is negative, at the lowest level in a decade, and likely to deteriorate further as US budget deficits expand further) and 'cyclical' pressures point the same way (recall how there is really only one phase in the economic cycle where the USD strengthens, that being where inflation and real growth are both declining simultaneously - policy is actively fighting that possibility). Exposure to 'USD beta' assets in this scenario (assets that benefit from USD weakness) implies increased exposure to, for example, Emerging Market Equities and the broad spectrum of Commodities.