Although equity markets have always been subject to equally irrational bouts of exuberance and despair, we appear to be living through especially volatile times. Since the COVID-19 lockdowns, wider participation of amateur day traders in markets has certainly added even more unpredictability to the mix. As we saw during the meme stock craze of 2021—when…
Just two weeks after de-dollarisation was high on the agenda at the BRICS conference in Johannesburg, the mighty American greenback has reminded the world that it remains its preeminent currency. Although well off its peak of October 2022, the US dollar is currently trading near a six-month high against a basket of currencies, making strong…
Like every economy around the world, China experienced a severe downturn amid the COVID-19 crisis in 2020. Unlike most other big countries, China pursued hard lockdowns well into 2022 and failed to benefit from a surge in post-pandemic consumer spending. Along with harsh, inconsistent regulation of sectors like tech, this has caused China’s economy to…
Ever since Goldman Sachs coined the BRIC acronym in 2001 (at that time, it excluded South Africa), its members have aspired to shape the club into a counterweight against Western hegemony. That aspiration took a step forward this week with the news from the BRICS Summit in Johannesburg that Argentina, Ethiopia, Iran, Saudi Arabia, Egypt…
There’s irony in the fact that the month of August is named after Augustus, who famously boasted that he found Rome a city of bricks and left it a city of marble. A month named after a Roman emperor (coincidentally, it’s the anniversary of his death on 19 August) associated with prosperity tends not to…
Company earnings reports for the second quarter (ended 30 June) continued to roll in this week, indicating the US economy is still in sound shape. Eighty percent of the S&P 500 companies that have reported earnings so far have beaten their estimates, although earnings per share (EPS) in aggregate have declined 5.2% year-on-year, the third…
Fitch, by far the smallest of the three major credit rating agencies, this week surprised the markets by downgrading US sovereign debt from the highest AAA rating to AA+. The agency cited “a steady deterioration in standards of governance” over the past two decades “that has manifested in repeated debt limit stand-offs and last-minute resolutions”…
Equities this week were mostly indifferent to the widely expected interest rate hikes from the Fed and European Central Bank (ECB). Markets also took heart from the International Monetary Fund (IMF) slightly upgrading its growth forecast for the global economy and stating that the risk of a crash landing has significantly receded. As we noted…
Following lower-than-anticipated inflation numbers from the US last week, we saw similarly encouraging inflation figures out of the UK, Australia, New Zealand and South Africa this week. UK inflation data for June reflected a higher-than-expected drop from 8.7% to 7.9%, and, earlier in the month, the euro-area reported year-over-year inflation of 5.5%, the lowest increase…
