Research

Down to the Wirecard

Raphael Fiorentino
27th June 2020 - 3 min read

If an interesting long idea consists of great-looking fundamentals and a high level of controversy, then Wirecard must have been one of the most interesting large-cap stocks we had seen in a while, if only in Europe. Instead, Wirecard went from nearly 200 euros a share two years ago (when it took Commerzbank’s place in the DAX), to 100 euros when the first scandal erupted in January 2019 (FT report), to 70 Euros last month (after KPMG was unable to verify WDI’s third-party profits), to now insolvent (E&Y not signing off on 2019 accounts and CEO arrested) and the European equivalent to Enron.

Recovery, Upcycle, Emerging Markets… Commodities next?

Raphael Fiorentino
26th June 2020 - 2 min read

According to the global macro nowcasting part of Butterwire’s engine, we’ve moved to an economic upcycle phase on June 23, just over 3 weeks after moving into a recovery phase. Market-implied equity returns have shot up past 16% with a strong tilt toward Emerging Markets.

Brutal shift in top-down signals since last week

Raphael Fiorentino
8th June 2020 - 3 min read

Butterwire users would have noticed how the application switched emphasis last week from “recession-resilience” to “recovery” scores...

Super-EU state or bust!

Raphael Fiorentino
4th May 2020 - 3 min read

It will be a while before the true cost of the blanket lockdown across most of Europe is known. We do know however that countries with higher Covid-19 fatality rates have typically seen their equity indices underperform by ca. -7% for each extra 100 fatalities per million above Denmark’s rate (see chart below).

All the (Investing) World Needs is a Fed Meeting

Raphael Fiorentino
28th April 2020 - 6 min read

The Fed’s Open Market Committee is holding today and tomorrow one of its 8 regular annual sessions. As the graph below shows, the mere fact that the FOMC meets is normally enough to boost equity returns. If only getting more protective masks was that easy!