The Street (March 29)
The Wall Street consensus “sees further gains over the coming months, fueled by solid corporate earnings and a better-than-expected economy,” but scenarios from some analysts include “a notable correction.” JP Morgan’s chief global equity strategist, Dubravko Lakos-Bujas, believes that “both the market’s reliance on AI-powered tech stocks… and Fed rate-cut projections put it at risk of a near-term correction.” He warns it could come completely “out of the blue,” such as a flash crash when “one big fund starts de-levering some positions, a second fund hears that and tries to reposition, the third fund basically gets caught off guard, and the next thing you know, we start having a bigger and bigger momentum unwind.”
Bloomberg (March 28)
“The risks are piling up for Japan’s currency, stocks and bonds as the nation’s fiscal year draws to an end right when many global markets close for Easter — and less than two weeks after the central bank hiked interest rates.”
Tags: Bonds, Central bank, Currency, Easter, Fiscal year, Global markets, Interest rates, Japan, Piling up, Risks, Stocks
ING Think (March 27)
Regarding China, “the market has settled into a state of excessive pessimism. And that’s understandable given the numerous doom and gloom media articles on firms reducing their China market exposure or exiting altogether.” Ultimately, however, we believe “China’s economy is not in a Great Decline but a Great Transition.”
Tags: Great Transition
Professional Pensions (March 27)
“Market turmoil, inflation shocks, high interest rates, and rolling geopolitical crises spurred many investors to stay on the sidelines last year” across all asset classes. “Yet investor appetite remains strong,” especially for real assets. “Globally, nearly two-thirds of investors expect to increase their allocation to real assets over the next two years, with investors in Asia most likely to add to their portfolios.”
Tags: Allocation, Appetite, Asia, Geopolitical crises, Inflation, Interest rates, Investors, Market turmoil, Real assets, Sidelines
Financial Times (March 27)
“The price of cocoa surged past $10,000 a tonne for the first time on Tuesday, as a dizzying rise in prices caused by poor harvests in Africa accelerates. Cocoa futures traded as high as $10,080 in New York, more than double their price only two months ago, as traders warned a global shortage of cocoa beans would herald higher price tags for chocolate bars.”
Tags: Africa, Chocolate bars, Cocoa, Dizzying, Double, Futures, Higher, New York, Poor harvests, Price, Shortage, Surged, Traders
Wall Street Journal (March 25)
“Annual issuance of U.S. Treasurys has exploded, nearly doubling since the pandemic began. The government sold a record $23 trillion worth in 2023.” This makes people “nervous” because “rapid growth in markets from tech stocks to mortgage bonds has ended badly in the past.” Given their ubiquity and potentially “unforeseen consequences,” any instability in the Treasury market “could rapidly spread” to other markets.
Tags: $23 trillion, 2023, Doubling, Exploded, Government, Issuance, Mortgage bonds, Nervous, Pandemic, Tech stocks, Treasurys, U.S., Ubiquity, Unforeseen consequences
New York Times (March 23)
“Investors in the futures market had expected the Fed to cut rates up to six times this year, but have recently come around to the central bank’s view that only three cuts are more likely. It hasn’t seemed to matter for the stock market’s barnstorming rally.”
Tags: Central bank, Fed, Futures, Investors, Rally, Rates, Stock market, Three cuts
Fortune (March 23)
“Foreign businesses’ direct investment into China last year increased by the lowest amount since the early 1990s, underscoring Beijing’s challenges to spur its economy. It also has to contend with a steadily accelerating outflow of manufacturing as Apple and other American brands begin to position new capacity in countries from India to Southeast Asia to mitigate risks from US-China tensions.”
Tags: 1990s, Accelerating, Apple, Beijing, Brands, Capacity, Challenges, China, Economy, FDI, India, Investment, Manufacturing, Mitigate, Outflow, Risks, U.S.
Foreign Policy (March 22)
Cuba “is experiencing its worst economic crisis since the end of the Cold War,” and the public is becoming more dismissive to government attempts to assign blame to outside interference. “The fresh demonstrations show that Havana’s role in the economic crisis has become more central in the public eye.” But “whether negative public opinion can lead to political change is another question.”
Tags: Blame, Cold war, Cuba, Demonstrations, Dismissive, Economic crisis, Government, Havana, Interference, Negative, Outside, Political change, Public, Public opinion
Institutional Investor (March 20)
Across sectors companies are tripping “over themselves to incorporate generative artificial intelligence into their operations. Not to be left out, investment managers too are crowing about their adoption of generative AI, typically in the form of large language models (LLMs).” This, however, “is a complex and expensive project with considerable investment and business risks and ethical considerations.” There should be less concern on “how these models might disrupt the investment management industry” and more focus on building “a methodology to assess the processes and procedures implemented by managers to ensure the ongoing utility and reliability of their LLMs.”
Tags: Adoption, AI, Assess, Complex, Disrupt, Ethical considerations, Expensive, Generative, Investment managers, LLMs, Methodology, Risks, Sectors
