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!

Less unknowns on the pandemic, more unknowns on everything else

Raphael Fiorentino
6th April 2020 - 7 min read

Early March, we reported on the staggeringly wide range of possible outcomes from the COVID-19 outbreak due to the uncertainty level surrounding the contagiousness (R0), lethality (CFR) and severity (SCR) of the virus.

The Big Short Vol

Raphael Fiorentino
23rd March 2020 - 6 min read

The abrupt and uninterrupted nature of the recent freefall in global growth expectations (see iGDP, our GDP index, momentum graph below) is starting to make 2008 look almost benign. For instance, our global financial stress index just spiked 16 standard deviations away from its 15-year mean, twice the 2008 peak level, even as central banks around the world have adopted a no-holds barred approach to prop up the reserves of financial institutions.

Key Stocks to Watch In Your Region And Sector (For Now)

Raphael Fiorentino
16th March 2020 - 3 min read

Under the circumstances, the stocks surfaced by Butterwire as offering the best prospects of material future out/under-performance have dramatically evolved over the past few weeks and will certainly do so again when and after global growth expectations bottom out (and a supply crunch meets a wall of money).

For now, we have taken this opportunity to create a rapid digest of Butterwire’s latest insights from its Stock Explorer and from its daily analysis of the fast-evolving fundamentals of 6,000 primary equities

1 April 2020 = 27 October 2008 Redux?

Raphael Fiorentino
11th March 2020 - 4 min read

Lehman’s bankruptcy on 15 September 2008 and AIG’s 60% share price drop on the following day were setting the stage for a torrid month of October as the financial crisis went global. While most of the damages were done by the time “peak liquidity crisis” was reached in 27 October, some sectors (e.g. EU banks) never recovered.

Over the past month, the US energy sector has seen share price declines of 50% (Schlumberger, EOG) to 70% (Occidental, Cenovus) and the MSCI World Bank index dropped 33% as covid-19 went global. Is this just the beginning of a torrid month of March and can we hope for a “peak epidemic crisis” by April 1?