Leveraged and Inverse Funds

Recent protests offer hope that change may be right around the corner. But for now, gold and Bitcoin have helped fill the gap created by disastrously mismanaged currencies.

Heading into the second half of the year, pandemic concerns are not completely in the rear-view mirror.

Is the retail investor rampage over?

Within my latest piece discussing the merits of deflation, I briefly touched on how several leading economic indicators appear to be signally growth may have peaked for the time being.

The global economy is in a mid-cycle expansion, following peaks in policy support and growth, and what is likely a transitory spike in inflation. We expect global growth to moderate to a still above-trend pace in 2022.

After a devastating selloff last year and a remarkable rebound since, it's as important as ever to have a good mental model of what is driving the market.

Rising interest rates generated negative year-to-date returns for investment grade bonds in 2021, but the second half of the year looks more promising. We believe the combination of reduced supply and strong demand will create attractive opportunities, and we are constructive on corporate credit and asset backed securities (ABS).

Be forewarned – we are going to empty the quote bin this quarter.

Workers have the upper hand, but not for long; Latin America stagflates; and Sweden provides a case study in COVID-19 response.

Following the June Federal Open Market Committee (FOMC) meeting, the Treasury curve flattened as the market reacted to a more aggressive hiking schedule than previously expected. Risk continued to perform well as investment grade (IG) corporates outperformed again and tightened through levels not seen since 2018. Economic data continues to improve showing the reopening remains on track, but investors remain focused on elevated levels of inflation.

Everything changed for me, my family and everyone I know on a Friday the 13th.

Our Chief Market Strategist Stephen Dover explores blockchain and digital assets through an equity-investor lens with Anthony Hardy and Christophe Vande Walle.

The pristine surface of a lake on a perfectly calm and sunny day is easy on the eyes. Yet it usually offers no insight as to what lies beneath.

With so much focus being placed on the inflation versus deflation debate of late and many financial pundits declaring a new inflation paradigm is upon us, what better a time to argue the case for deflation.

As the world convalesced from the pandemic, stocks advanced in the second quarter and earnings rebounded across sectors.

There may be many reasons why people spread misinformation about Bitcoin. Much of the misinformation may originate from Ripple, which is currently under investigation by the Securities and Exchange Commission (SEC). The fintech firm is believed to employ a great number of bots on Twitter and other social media platforms with the intent of tearing Bitcoin down in favor of its own XRP coin.

Reflecting on a busy six months of vaccines, inflation, trade relations, supply chains, and policy challenges.

Ken Leech, Chief Investment Officer at Western Asset takes a dive into his outlook for various segments of the fixed income markets in the second half of 2021.

Leveraged loan issuers have lagged other fixed income market issuers in moving to SOFR as a reference rate, posing potential risks to investors as the year-end deadline approaches.

A couple of weeks ago, in “Warning Signs A Correction Is Ahead,” we said quite a few indicators set the stage for a pick-up in volatility.

Bitcoin erased its 2021 gains this week as China ramped up its crackdown on mining of the cryptocurrency, a move that’s expected to help shift the industry’s center of gravity from Asia to North America.

This Fund has a focus on China’s small companies—could you explain the investment idea behind this? Why China? Why small cap?

Like most risk assets, emerging market (EM) equities were hit hard by the pandemic, but they’ve made a remarkable rebound. From the low on 23 March 2020 to 18 June 2021, the MSCI Emerging Markets Equity Index gained 80%.

Over the past few months, economic recoveries have been uneven across regions and sectors.

Sir John Templeton famously said that “this time is different” are the four most dangerous words for investors.

The GMO Asset Allocation Team has released its latest 7-Year Asset Class Forecasts through May 2021 (click to view online or see chart below).

Domestic business travel is well on its way to recovery. Forty percent of poll respondents said that business travel within the country where their firm is based has already resumed, while a third said that their company has either decided on a start date or is working toward a date.

With inflation spiking as the world adjusts to the post-Covid regime, investors are naturally interested in how their portfolios might perform in an inflationary world.

Coherent thinking is interested in how things are related; where they come from, where they go, and the mechanisms by which they affect each other.

Over the last couple of months, the Fed started its campaign to prepare markets for a “taper” of its asset purchases.

The interplay between governments and businesses impacts your investments. So does the interplay of governments with other governments. Thus the drive to create an international corporate tax. So you can’t escape politics… but you can try to analyze it calmly, without partisan histrionics.

With only a few brief downturns in an otherwise upward trend in the U.S. equity market since the Global Financial Crisis, declining interest rates have pulled forward the net present value of distant earnings and propelled growth stocks (and the market as a whole) higher.

Given recent history, policymakers would be unwise merely to hope for a best-case scenario in which a strong and quick economic recovery redeems the enormous run-up in debt, leverage, and asset valuations.

Treasury yields fell again in May and credit spreads approached recent tights as the virus continued to recede, allowing the reopening of the economy to progress. Economic data was noisy this month, largely due to base effects, but confirms the ongoing trend of renewed growth and signs of inflation.

According to data provided by The Block, mining revenue on the Ethereum blockchain topped $2.35 billion in May—a new all-time high—compared to $1.45 billion for Bitcoin. Transaction fees alone contributed over $1 billion.

As more people are getting vaccinated and economic conditions return to normal, Franklin Equity Group’s Jonathan Curtis says the digital transformation themes that accelerated during the COVID-19 crisis are still just getting started.

Second quarter is likely the peak growth rate for both the economy and corporate earnings; with positive economic surprises waning.

The International Energy Agency (IEA) was founded in 1974 in response to oil embargos the previous year that caused the global price of oil to surge 300% from $3 per barrel to $12 per barrel. From the start, the IEA’s mission has been to help member nations deal with major oil supply disruptions.

From base effects to bottlenecks, wages to pricing power, inflation questions abound.

If you could ask the world’s top central bankers what really terrifies them, I think the honest answer would usually be “deflation.” It is their greatest nightmare. They think a little inflation is good (thus the 2%+ target), and they’re confident they can subdue it if necessary. Deflation is a bigger problem.

As the US recovery gains momentum, Franklin Equity Group’s Grant Bowers explains why pent-up consumer demand should present a fertile environment for stocks and highlights some opportunities he sees in the US equity market.

In good news for high-yield bonds, recovery rates on defaults are also improving from the concerningly low levels of recent months, as energy-sector defaults have worked through the system. However, recovery rates are still well below their historical level, which indicates weak bond covenants.

China was the first nation to enter recovery, and high U.S. import demand has helped it.

While some major economies are recovering fast from the pandemic-induced recession, others are languishing, and still others remain in a state of acute crisis.

The pandemic forced us all to communicate via Zoom.

“If everyone sees it, is it still a bubble?” That was a great question I got over the weekend.

As we entered 2021, we put the pivot point of the economy and market returns squarely on inflation.

Biden pushes more spending just as the U.S. debt ceiling returns from hiatus, while Scotland's standing in the U.K. is uncertain.

Strategic rivalry between the U.S. and China is creating a bipolar world.

I don’t question Elon Musk’s good intentions, but I respectfully disagree with the underlying insinuation that crypto miners in particular are a threat to the climate. It’s just not true, for reasons I explain below.

Last week I teased you about the China panel, so that seems like a good place to start. We’ll review that conversation and then bring in some China comments from later sessions.