While the markets are pricing in a speedy return to normal, reality may come up short of these expectations. We fear the return of inflation more than most. There is a difference between relation and inflation. Right now the market sees reflation (aka real growth), but we believe this will morph into inflation later this year.
The Japanese stock market has lagged the rest of the developed world. A giant equity bubble popping in the 1990s, an unwillingness to embrace change, and the lack of a large passive ETF market have all contributed to the 30-year drought.
As of February 16, 2021, 369 companies have reported quarterly earnings. A beat rate of 81.3% well exceeds the historical average of 71%. Q4 2020 earnings results continue to move higher and growth is now over 4% year-over-year.
Today's topics include the mechanics of running down the Treasury's cash balance, what is the Russell 2000?, an evolving view of inflation, bonds' tough start in 2021, abandon all caution, junk bond issuance, bitcoin volatility, bitcoin from a diversification standpoint, China explores limiting rare earth exports, and the ECB tweets
So do investors see this rise in rates as a healthy reflation or worrisome inflation? For now, the reflation narrative is winning. We expect the inflation narrative to take over later this year.
Today's topics include 2 million shots yesterday, the history of stock shorts, another sign of the growth of retail traders?, debating inflation, checking in on activity indices, companies' earnings outlooks, the EU's stability & growth pact, differentiating types of factor investing, UK GDP since 1801, and small cap outperformance
Updating flows into 'allocator' ETFs and 'trader' ETFs
Bank lending as a percentage of assets recently hit an all-time low.
The dollar and euro account for over 75% of all global payments according to SWIFT.
China's stock market is now valued at over $11 trillion. How does this compare to other countries' stock markets?