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FinancialGauge - Independent Strategic Thinking

FinancialGauge provides timely analysis of the financial markets reflecting our independent strategic thinking

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FinancialGauge - Independent Strategic Thinking | financialgauge.net Reviews
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FinancialGauge provides timely analysis of the financial markets reflecting our independent strategic thinking
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FinancialGauge - Independent Strategic Thinking | financialgauge.net Reviews

https://financialgauge.net

FinancialGauge provides timely analysis of the financial markets reflecting our independent strategic thinking

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1

FinancialGauge - Shifting Tectonic Plates

http://www.financialgauge.net/archivedfeatures/shiftingtectonicplates.html

Is Obsolescence Priced In. The Mighty US Dollar. Are US equities the new safe haven? Global investors may increasingly turn to US equities, like high-tech, as a safe haven given current low Treasury yields and the relative stability, size and cohesion of US markets. (See our previous feature – Gauging Earnings Yields).

2

FinancialGauge - Clashing Forces

http://www.financialgauge.net/recentfeatures/clashingforces.html

Is Obsolescence Priced In. The Mighty US Dollar. Clashing geopolitical and economic forces. A stronger US economy and faster tapering by the Fed should lead to higher rates going forward – clearly hurting Treasuries. (See our previous feature – Bond Yields Revisited). But rising geopolitical risk and less support by the Fed, in the face of a still fragile global economy, will likely also lead to wider spreads – hurting corporates and equities.

3

FinancialGauge - What Price Insurance

http://www.financialgauge.net/archivedfeatures/whatpriceinsurance.html

Is Obsolescence Priced In. The Mighty US Dollar. Is Gold’s insurance premium too high? Zero interest rate policies by central banks around the world have distorted all asset prices and made it increasingly difficult to gauge risk. Gold prices may thus be unsustainable at current levels. The title is by Skye Gropper, formerly of Institutional Investor.

4

FinancialGauge - Union of Unequals

http://www.financialgauge.net/archivedfeatures/unionofunequals.html

Is Obsolescence Priced In. The Mighty US Dollar. Common currency with different outcomes. Rsquo;s problems in the form of a much weaker Euro and even greater competitiveness. Notwithstanding the complicated interplay between currency and equity markets, equities ultimately dominate returns.* This suggests that only structural changes in the rest of Europe increasing competitiveness, not currency moves reflecting monetary or fiscal policy, will again make European equities attractive overall.

5

FinancialGauge - Exporting Deflation

http://www.financialgauge.net/recentfeatures/exportingdeflation.html

The Mighty US Dollar. Japan’s destabilizing contribution to the global economy. While markets are almost exclusively focused on whether the Fed will continue or curtail supplying unlimited liquidity, a bigger concern should be Japan’s effort to grow its own export-led economy thru currency depreciation in a weak global economy. This may prove far more important in determining the fate of global equity markets.

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The Price of Brexit. Back to the Future. Is Obsolescence Priced In. The Mighty US Dollar. End of an Era. Rising bond yields and their impact on markets. An end to the secular decline in bond yields with an initial leveling off between 3.5% and 4% suggests that current P/E’s are too high and equities overvalued. The unintended consequence of recent tax policy, putting greater upward pressure on bond yields, may thus be to significantly increase the risk to equity markets and the economy.

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FinancialGauge - Independent Strategic Thinking

The Mighty US Dollar. Asset prices across sectors must reflect the same reality. The collapse of the energy sector has a dislocational impact on financial markets generally much like the earlier tech and housing sector busts. Thus the current divergences in relative prices across sectors may in part be masking the greater overall risk endangering all market sectors. (See our previous feature – Mispricing Risk?

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