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07 05/21 07/05/2021

European and U.S. markets headed higher this week as more companies reported their quarterly results. Companies reported earnings that were on average 23% better than the expectations. Their outlook on the rest of the year is also rosier than in previous quarters although inflation is constantly brought up as a risk factor. The often-repeated market rotation is persisting. Tech stocks has been under pressure the last couple of weeks as they are exchanged for recovery stocks such as energy and utilities. Stay-at-home stocks that were the stars in 2020[...]

16 04/21 16/04/2021

This week marks the beginning of earnings season. This means that publicly traded companies will start to publish their 1st quarter results. Investors will get to see if the companies they hold performed according to expectations or if they missed the mark. The analysts consensus is that the overall market will have increased earnings compared to that of the 1st quarter of 2020. It may sound like a repetition, but Jerome Powell remarked last Sunday that the U.S. economic outlook improved substantially and the Fed is not planning on raising interest rates this year. Although the Fed said multiple times that it is not planning on raising interest rates in the[...]

26 03/21 26/03/2021

Yields on the 10-year U.S. Treasury bonds stayed stable throughout the week after last week’s 1.7% high. Volatility, tracked by the Volatility Index (VIX), has been fairly low this past month. The U.S. however faced retracting home sales, personal spending, and manufacturing numbers. Oil also dipped below $60 per barrel again. Fed Chair Jerome Powell and U.S. Treasury Secretary Janet Yellen announced this week that the U.S. economy is recovering at a higher pace than previously expected and believe that the GDP will spike this year. What is left behind so far is the labor market and inflation. Powell and Yellen are both of the opinion that there is a need for more[...]

12 03/21 12/03/2021

The Organisation for Economic Co-operation and Development (OECD) upped their 2021 and 2022 economic forecast due to the approved U.S. stimulus. This approval is expected to have a positive spillover effect on other economies. To be precise, the global economy is expected to grow a full percentage point. Think about the increased import (and perhaps even export) when $1.9 trillion is injected into the world’s largest economy. The OECD increased its 2021 global GDP forecast to 5.6% and its 2022 global GDP forecast to 4.0%. The U.S. GDP forecast increased to 6.5% and 4.0% respectively for the year 2021 and 2022.More

The U.S. financial markets stabilized this week and started to move back north. The U.S. economy is still strengthening and the approved $1.9 trillion U.S. stimulus plan is putting pressure once again on growth stocks and bonds. Oil continued on the rise surpassing $71 per barrel for the first time in more than a year but retracted later in the week. The stock market rotation is persisting while bond yields are cooling off from last week highs.

05 03/21 05/03/2021

Markets have been zigzagging for a week now as bonds are increasingly competing against stocks. As you may have heard countless times, interest rates were near zero (some places even negative) for a while which led bond investors to swap their bonds for stocks. Now that interest rates are rising some of this capital is returning to bonds. The 10-year U.S. Treasury (U.S. government bond) reached 1.6% yield last week for the first time since February 2020 then backed off. This made the 10-year Treasury yield at the time higher than the dividend yield of the S&P 500. In simple terms, the U.S. Treasury yielded more than[...]

26 02/21 26/02/2021

According to Jan Hatzius, chief economist at Goldman Sachs, the U.S. has more than $1.5 trillion in forced excess savings thanks to all the stimulus packages, depressed consumption, and containment measures such as lockdowns and travel restrictions. Seeing that all these variables are still at play, the forced excess savings are expected to rise to $2.4 trillion (11% of GDP) by the time we reach a “normal” economic life, said the economist. This is expected around mid-year. More

Markets were on a slight decline in the beginning of the week where tech stocks took the lead and value stocks held their own. Oil prices retracted from recent highs as well. Fed Chair, Jerome Powell, announced mid-week that the U.S. economy is improving but stated that it is doing so unevenly. The Fed plans to keep the interest rates low for the coming years and will continue to buy government bonds. The markets started moving back upwards after Powell’s comments with the DOW reaching new all-time highs. This reversed again later in the week due to surging bond yields. As mentioned in the previous newsletter,[...]


After more than a decade of mild inflation and deflation, inflation is likely around the corner. Peter Berezin, Chief Global Strategist at BCA Research thinks that inflation will increase significantly in the upcoming months. This is due to the fact that inflation data is based on year over year changes. In other words, the increasing prices in the following[...]


You have heard the word inflation countless times by now. The decrease of purchasing power due to increase in general price levels. The current low interest rate environment according to many is likely to spur inflation as economies reopen and we head back to some sort of normalcy. According to Investopedia, signs of inflation are seen in the farmland where prices of corn and soybean increased to levels not seen in years. Crude, platinum, and copper were also among the commodities[...]




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