The IMF’s ‘remarkable’ track record
Forecasting recessions is hard. Just ask the IMF. The chart below, based on the work of Andrew Bridgen, chief economist at London-based Fathom Consulting, shows that the IMF has only […]
The era of extraordinary monetary policy continues
Few investors anticipated that Federal Reserve Chairman Jerome Powell could sound even more dovish than he has in recent months. But, at the last FOMC meeting, he managed to do […]
Earnings growth is not a prerequisite for higher equity prices
With global growth leveling off, investors are more focused than ever on corporate results. These reveal a less rosy picture than in previous years and company expectations are very muted. […]
The far-reaching effects of central bank policy
The impact of central banks should not be underestimated. And I don’t just mean their impact on economic growth and interest rates. Central banks are also a driving force of […]
Stuck!
Italy’s economy has virtually stopped growing in the aftermath of the financial crisis. Real quarterly GDP growth has averaged a meager 0.05% since 2010. As a result, the debt-to-GDP ratio […]
Recession indicators are overrated for stock returns
Equity investors are always looking for signs of the next recession. Recessions mean higher unemployment, lower spending, lower earnings and ultimately more defaults, all of which are bad news for […]
Miniblog – Chinese profits down again
Profits of Chinese industrial companies fell 1.9% year on year in December, marking the second consecutive month of earnings decline. For 2018 as a whole, profits rose 10.3%, half the […]
Emerging stocks could make a comeback in 2019
2018 wasn’t a pretty year for equity markets in general, and for emerging markets in particular. Global stocks fell 4.1% (in euros), whereas emerging market equities realized a negative return […]
Volatility feels more extreme than it actually is
Markets have seen a sharp increase in volatility in recent weeks, with the S&P 500 experiencing its worst December month since 1931. But, looking back at the history, the total […]
The average return doesn’t exist (2019 edition)
Every year I post an update of the ‘average return doesn’t exist’ blog to show that the average return on equities is mostly a statistic, and is seldomly seen in […]
