Markets got a dose of reality this week. After a prolonged period of falling volatility and positive returns for risk assets, the narrative is changing. Rising tensions in the Middle East and higher-than-expected inflation in the US helped propel commodity prices higher and jolted interest rates and the dollar through significant technical resistance. Among the …
Continue reading “Market Tensions: Inflation, Commodities & Iran”
Warren Buffet, the renowned investor and CEO of Berkshire Hathaway, recently released his annual letter to shareholders, providing an insightful overview of the company’s performance and future trajectory. Buffett discussed Berkshire’s record profits, his views on stock-market speculations, and paid tribute to the late Charlie Munger. Please click here to read the entire article on …
Continue reading “Berkshire Hathaway’s Record Profits, Market Outlook, And Future Plans”
In a week that includes the publication of FOMC meeting minutes, speeches from seven Fed officials, and the release of PMI data, Nvidia’s earnings announcement may be the most anticipated event of all. Click here to read the entire article on Forbes.
Mortgage-backed securities, or MBS, are currently an attractive alternative to Treasuries. The main reason for wide spreads is elevated implied volatility due to their inherent negative convexity. Traditional mortgage ETFs are not the best way to capture a potential tightening in spreads. Large ETFs like MBB and VMBS provide exposure to the entire mortgage market, not just the current coupons with the highest spread.
The path for interest rates in 2024 is undoubtedly one of the most significant issues for investors. Virtually everyone agrees the next move is lower, but there is little agreement on when the Fed may begin to ease rates and the cumulative amount it may ease policy. The Fed’s own Summary of Economic Projections, also known as the ‘dot plot,’ indicates rates will be lowered by 0.75% in 2024 from the current 5.25%-5.5% band to 4.5%-4.75%. The financial markets are expecting almost double that. What should investors believe? The Fed or the market?
Not more than a year ago, all eyes were focused on the disruption in the global supply chain. Ports were backed up, transportation costs were soaring, and there was a shortage of essential consumer goods. These bottlenecks caused massive stress in the economy and skyrocketing inflation. Today, things are very, very different.
Diversification is vital in the bond market, where many investors primarily concentrate on “core bond” portfolios composed of government bonds, agency mortgage-backed securities, and investment-grade corporate bonds. Despite their popularity, these portfolios may lack sufficient diversification.
EM debt is one of the worst-performing asset classes so far this year. In my latest Forbes article, I highlight the external forces that are responsible for the majority of the pain. Click here to read the entire post on Forbes
Markets were surprised by how quickly inflation accelerated and were late in abandoning the “transitory” narrative. They may be early in their prediction for disinflation. Click here to read the entire story on Forbes
Rising inflation and worries of an economic slowdown caused a severe flattening of the yield curve and propelled the U.S. dollar to new highs against several major currencies. Click here to read the entire post on Forbes
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