Mark Artherton, CFA

Inteqres

Thematic (Sector/Industry)

We update our charts for the latest European Covid-19 data.  A positive trend in case numbers is emerging despite our concerns about the impact of shifts in the way testing is carried out.  Adjusted fatalities also appear to be showing an improved trend.Overall we are cautiously positive.  Though we remain very negative about the economic effects of policies being followed.

We update our charts for the latest European Covid-19 data.  A positive trend in case numbers is emerging despite our concerns about the impact of shifts in the way testing is carried out.  Adjusted fatalities also appear to be showing an improved trend.Overall we are cautiously positive.  Though we remain very negative about the economic effects of policies being followed.

Update on European Covid 19 Numbers - Cautiously Positive

Cross Asset Strategy

We review the latest European CDC data to shine a light on the data issues at the heart of Covid-19 and to highlight key factors for investors to watch out for.  We find - that rather unfortunately - the most reliable comparative data point is the number of deaths.  The number of cases is subject to national testing decisions, and though it has started to converge to some form of standardisation there is still problems with the data.Adjusted data does show that Italy is the worst case in Europe and other countries have learned from Italy's experience.  However, we do have to make adjustments based on a limited and problematic data set.

We review the latest European CDC data to shine a light on the data issues at the heart of Covid-19 and to highlight key factors for investors to watch out for.  We find - that rather unfortunately - the most reliable comparative data point is the number of deaths.  The number of cases is subject to national testing decisions, and though it has started to converge to some form of standardisation there is still problems with the data.Adjusted data does show that Italy is the worst case in Europe and other countries have learned from Italy's experience.  However, we do have to make adjustments based on a limited and problematic data set.

The Data Problem at the Heart of Covid 19 but Adjusted Data Gives Some Hope

We have reviewed the influential Imperial College report on the transmission of Covid-19 and the policy response in Europe that has followed on from the report.  Using the report's own data we highlight a huge policy error with tremendous ramifications for the global economy.  There is time, in our opinion, to rectify this error but we are not hopeful.We believe that current European policy will ultimately fail and a course correction is needed as soon as possible before it is too late.  We do not make these comments lightly - our work is not sensationalist, but for the first time in our career we believe that a phenomenal policy error is underway that will unnecessarily tip the globe into a depression.Globally co-ordinated action can stop this from happening.

We have reviewed the influential Imperial College report on the transmission of Covid-19 and the policy response in Europe that has followed on from the report.  Using the report's own data we highlight a huge policy error with tremendous ramifications for the global economy.  There is time, in our opinion, to rectify this error but we are not hopeful.We believe that current European policy will ultimately fail and a course correction is needed as soon as possible before it is too late.  We do not make these comments lightly - our work is not sensationalist, but for the first time in our career we believe that a phenomenal policy error is underway that will unnecessarily tip the globe into a depression.Globally co-ordinated action can stop this from happening. 

A Huge Policy Error in the European Response to Covid-19 - How to Fix It Before Depression Strikes

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Support levels have meant little more than talking points as indexes are slicing through them like butter. The truth remains that no one knows how low we will go, and the trend is still down for global equities. At the same time, every week where the MSCI ACWI loses ~10%, it gets that much closer to finding a bottom. In this report we provide updates on several indicators we are watching as to clues of a bottom.  We also highlight actionable themes within Staples, Health Care, Technology. We continue to recommend areas with defensive and/or growth characteristics.

Support levels have meant little more than talking points as indexes are slicing through them like butter. The truth remains that no one knows how low we will go, and the trend is still down for global equities. At the same time, every week where the MSCI ACWI loses ~10%, it gets that much closer to finding a bottom. In this report we provide updates on several indicators we are watching as to clues of a bottom.  We also highlight actionable themes within Staples, Health Care, Technology. We continue to recommend areas with defensive and/or growth characteristics.

Dollar Surge Further Aggravates Equity Markets

Cross-Asset Liquidity Strategist, CrossBorder Capital

Michael J. Howell

Cross-Asset Liquidity Strategist

Implementing Research Using Alt Data & AI

CrossBorder Capital

CrossBorder Capital is a London-based independent investment advisory firm. Founded in 1996, it exploits a gap in the investment arena by focusing on Central bank liquidity. 

It specialises in the monitoring and analysis of global liquidity flows - an important determinant of asset prices, from currencies through to bonds, equities and real estate.

CrossBorder Capital implements its investment strategy and currently manages over US$ 350m.


<ul>
<li>QE5 is here (we just had QE4), QE6 is coming and probably others. Cutting interest rates is a bad move which could even destroy short-term liquidity</li>
<li>
US Fed balance sheet is set to test US$6 trillion under the latest QE5</li>
<li>Next round of coronavirus crisis will strain US$ forex swap and funding markets as supply-chain payments fall and lead to QE6</li>
<li>We expect near-term firm US dollar, and later much stronger gold price and steeper yield curves. Pattern of crisis has similarities with 9/11, which had economic effects lasting over 4 months. The coronavirus crisis may be shorter, but it will be both more extensive and more severe.</li>
</ul>


QE5 is here (we just had QE4), QE6 is coming and probably others. Cutting interest rates is a bad move which could even destroy short-term liquidity

US Fed balance sheet is set to test US$6 trillion under the latest QE5
Next round of coronavirus crisis will strain US$ forex swap and funding markets as supply-chain payments fall and lead to QE6
We expect near-term firm US dollar, and later much stronger gold price and steeper yield curves. Pattern of crisis has similarities with 9/11, which had economic effects lasting over 4 months. The coronavirus crisis may be shorter, but it will be both more extensive and more severe.


Why The Latest Liquidity Crisis Means QE5 & QE6

United States

The MSCI World Index is a free-float weighted equity index. It was developed with a base value of 100 as of December 31, 1969. MXWO includes developed world markets, and does not include emerging markets. MXWD includes both emerging and developed markets.

MSCI World Index (MXWO INDEX)

Update on European Covid 19 Numbers - Cautiously Positive

We update our charts for the latest European Covid-19 data. A positive trend in case numbers is emerging despite our concerns about the impact of...

Mark Artherton, CFA

The Data Problem at the Heart of Covid 19 but Adjusted Data Gives Some Hope

We review the latest European CDC data to shine a light on the data issues at the heart of Covid-19 and to highlight key factors for investors to...

Mark Artherton, CFA

A Huge Policy Error in the European Response to Covid-19 - How to Fix It Before Depression Strikes

We have reviewed the influential Imperial College report on the transmission of Covid-19 and the policy response in Europe that has followed on...

Mark Artherton, CFA

Dollar Surge Further Aggravates Equity Markets

Support levels have meant little more than talking points as indexes are slicing through them like butter. The truth remains that no one knows how...

Vermilion Research

Why The Latest Liquidity Crisis Means QE5 & QE6

QE5 is here (we just had QE4), QE6 is coming and probably others. Cutting interest rates is a bad move which could even destroy short-term...

Michael J. Howell