Who gets the keys for the policy road ahead?
The summer travel season reminds me of family car trips that seem a bit longer on the return home after a vacation. Similarly, the Fed’s extended pause and anticipated arrival at a terminal rate has seemed, well, interminable. At the beginning of the year, markets were starry-eyed children expecting a quick trip (several interest rate […]
How might investors withstand ‘AI FOMO’?
Video transcript The story of the equity market over the last 18 to 24 months has been the dramatic outperformance of the Magnificent Seven stocks, largely because of this AI FOMO trend that’s been going on, artificial intelligence, fear of missing out. So those seven stocks over the last 18 months are probably up 120% […]
Much to celebrate, much to discuss
If cash is king – and we certainly think so – it held court last month in Pittsburgh. The annual Crane Data Money Fund Symposium took place in the conference centre attached to our global headquarters, and what a court it was. More than 600 portfolio managers, salespeople and clients came to celebrate the industry’s […]
Does the Fed play dice with the financial system?
God does not play dice with the universe, according to Einstein, but, if he did, the outcome would look something like the chart below – only with somewhere between a vigintillion and acentillion of different particles to rearrange instead of two, six-sided die. Chart 1: Towards entropy Source: Entropy (gsu.edu) The double-die example (as opposed […]
Our outlook for India: The view from the GEMs desk
The excitement about India has resulted in rich valuations. How are you thinking about the valuation of Indian markets and how are you positioned? On valuations, with any metric we look at, the Indian market does screen to be expensive – but we have to think about why investors pay a premium for India, and […]
Emerging market debt: the strong recovery continues
EMD report Q1 2024
Markets heed data, not Fed Speak
US Federal Reserve Chair Jerome Powell has been talking himself hoarse lately. Ever since he failed to push back against the market’s overly ebullient expectations for rate cuts following the December 2023 policy meeting, he has told anyone who’d listen the Fed isn’t ready to declare victory over inflation. His press conference in January this […]
Sun setting on the tightening cycle
A busy month of news pertaining to the liquidity markets ended on a high note when the US Federal Reserve maintained the target fed funds rate at 5.25-5.50% and pushed the probable first rate hike to late spring at the earliest. Degrees of confidence US Federal Reserve Chair Jerome Powell returned to the word “confidence” […]
Corporate fundamentals: Opportunities and challenges within credit dispersion
Credit fundamentals continued to modestly weaken towards the end of 2023, with both leverage and interest coverage metrics trending towards long-term averages from the lows and highs respectively witnessed a year ago, as shown in Figures 1 and 2 below. Figure 1: Leverage increasing towards long-term averages Source: BofA, as at 31 December 2023. Figure […]
Where are the best opportunities at the short end of the curve?
Short Term Investments Committee
