201502.18
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FOMC Worries About The End Instead of the Beginning…

As per usual, the latest FOMC statement conjured up a storm of befuddlement about any number of topics. Most of the concerns, should they even be categorized thusly, amount to debated levels of disingenuousness surrounding oil prices (only a month ago there was nothing “bad” about a 60% collapse in the world’s primary resource input)….

201502.16
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Is It Time To Zig?

The US stock market made another all time high last week amid more mediocre – at best – US economic data. Much of the gain was credited to positive developments in the geopolitical arena as a ceasefire was announced in Ukraine and negotiations continued on Greek debt relief with some positive signs that an agreement…

201502.15
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Macro Themes and Research Highlights

The US currency is strengthening in conjunction with the a strengthening US economy (proxied here by employment growth and surveys of businesses on hiring intentions and growth prospects). The last time we had this environment was in the 90’s. The combination of increased spending power accompanied by job growth could result in an empowered US consumer….

201502.08
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Investment Themes and Asset Allocation

Here is a summary of this week’s research from our strategic partner MRB. Allocation:   Trades to consider: “Short global luxury stocks versus multiline retailers.” “Short 10-year U.S. Treasuries outright.” As always, please feel free to contact me with any questions or concerns. Find out about your personal risk profile and working with Alhambra Click here to…

201502.01
4
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Less Than Zero

“Where are we going?” I asked “I don’t know,” he said. “Just driving.” “But this road doesn’t go anywhere,” I told him. “That doesn’t matter.” “What does?” I asked, after a little while. “Just that we’re on it, dude,” he said.” ― Bret Easton Ellis, Less Than Zero The title of this post is, obviously,…

201501.30
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Research Charts: ECB and Commodities

From strategic research partner MRB…with Alhambra’s added commentary. QE is primarily a signaling device to demonstrate policymakers’ commitment to fostering the recovery and sustaining a cohesive monetary union. The policy is implicitly designed to reduce the equity risk premium. We expect a gradual re-rating of euro area equities. A cheaper euro, itself associated with QE,…

201501.25
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Investment Themes and Research Highlights

The cyclical rebound in global return on equity has further to run in an economic recovery scenario, despite having softened modestly in the past year. Earnings will be a tailwind for stock prices. Global equities are fairly valued relative to corporate profitability. Valuations are not an impediment to further stock price gains, and indeed have…

201501.19
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The Dangers Of Leverage

Leverage: the use of credit to enhance one’s speculative capacity Merriam-Webster Give me a lever long enough and a fulcrum on which to place it, and I shall move the world. Archimedes The Swiss National Bank – the Swiss equivalent of our Federal Reserve – didn’t exactly move the world last week but the fallout…

201501.19
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Currencies

The dollar is very stretched in momentum and sentiment terms and, thus, due for a consolidation or brief correction. This is true for all the major and commodity currencies. However, the key cyclical drivers for exchange rates – relative growth trends and interest rate differentials – should remain dollar-supportive this year. Most likely, after a…