VantagePoint: The Bear Awakens
March 18, 2020—The bear has finally come out of his long hibernation, causing us to dust off our playbook for weathering bear markets.
March 2020
Rate Cuts Are No Vaccine
March 16, 2020— The Federal Reserve Bank has announced a host of emergency measures intended to improve bond market liquidity and reduce borrowing costs, which come in response to rising signs of dislocation across Treasury, municipal, and corporate bond markets.
March 2020
Europe Escalates Its Response to the Coronavirus Outbreak
March 13, 2020— This week, the Bank of England and the European Central Bank both announced stimulus measures aimed at responding to the growing impact of COVID-19.
March 2020
Treasury Bond Yields Plunge to Historic Lows
March 9, 2020—Yields on ten-year Treasuries dropped below 50 basis points (bps) today for the first time in history as COVID-19 fears spread. While we cannot rule out a recession, given the uncertainties associated with the virus and its impact on economic activity, we believe today’s low yields are less about long-term growth forecasts and more about expectations of further Federal Reserve easing, risk aversion, and liquidity preferences.
March 2020
The Fed Eases as Virus Concerns Grow
March 3, 2020—The US Federal Reserve cut its policy rate by 50 basis points today, highlighting the serious challenges facing the global economy. Still, we don’t believe investors should cut risk. Very few have an informational edge regarding COVID-19’s market impact, and investors could be left underexposed when and if markets rebound.
March 2020
Pandemic Risks and Reactions
February 28, 2020—Global equities sold off sharply this week as cases of COVID-19 spread rapidly outside of China (particularly in Korea, Italy, and the Middle East). While the spike in volatility has been abrupt, the current market sell-off is arguably a needed correction.
February 2020
Are You Expecting Another "Tech Wreck" Like 20 Years Ago?
No, we doubt the equity market’s heightened tech concentration will trigger an imminent correction. Rather, tech stocks’ outsized weighting reflects their superior growth and free cash flow this cycle. Amid a lackluster macroeconomic backdrop, historically low discount rates have boosted the appeal of the most profitable and liquid segment of the global equity universe, namely […]
February 2020
Coronavirus Outbreak: Initial Thoughts and Implications
Investors should stay calm. While the Wuhan coronavirus is still spreading, the virus remains less deadly and more contained than the SARS outbreak of 2002–03. Looking at other epidemics, history suggests that after an initial sharp hit, economies and markets typically recover quickly.
January 2020