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companies general

World economy 24th February 2020

Well-Prepared Firms Emerged As Winners During And After Past Recessions

The current economic expansion now more than 10 years old, long by historical standards, as well as signs of overleverage in the corporate sector, combined with geopolitical uncertainty, suggest the next recession is not far off. According to a new study by Bain & Company, Beyond the Downturn: Recession Strategies to Take the Lead, companies that were well prepared emerged victorious from previous crises. These companies managed to survive, controlling costs and at the same time reinvesting in growth.

Africa

World economy 23rd February 2020

African Countries Aren’t Borrowing Too Much: They’re Paying Too Much For Debt

Misheck Mutize via The Conversation | There is renewed concern about the sustainability of rising debt levels in many African countries. Much of this debt is being incurred through foreign currency denominated Eurobonds issued on international financial markets. The total value of Eurobonds issued between 2018 and 2019 was more than the value of all bonds sold between 2003 to 2016.

Tesla

World economy 21st February 2020

Tesla And Other Bubbles That Are Not Seen Until They Burst

Manuel Moreno Capa | From a practical point of view for the investor, Tesla is not really a car company. As opposed to selling cars, what it actually sells are expectations, future, potential. More or less the same as what many “dotcom” firms sold. That’s why its stock price is so crazy. But if at some point it became a simple car manufacturer, it would end up being valued as rigorously as the rest of the sector, irrespective of how advanced its models were.

Equities

Markets, World economy 18th February 2020

Risk Aversion Leads The Market

BBVA Research / U.S. stock exchanges reopened after President’s Day holidays, in an environment where markets traded in a risk–off mood fashion. Apple Announced forecasts for 1Q20 sales are not going to fulfill expectations amid coronavirus impact, while its share value dropped 2.13 %. Furthermore, HSBC also warned about the impact of the coronavirus on its Asia business. In this context, investors sought shelter in safe-haven assets, while equities halted…

China Coronavirus fears hit equity markets

World economy 18th February 2020

Coronavirus – Beyond the headlines

Investors worldwide are trembling at the epidemic that is currently crippling China. With good reason? This is a guest commentary by Frank Sieren. The best-selling author has lived in Beijing since 1994 and reports exclusively from China for Flossbach von Storch AG.

How Europe's tech sector is hiding in plain sight

World economy 17th February 2020

How Europe’s Tech Sector Is Hiding In Plain Sight

Europe’s tech sector has long been overshadowed by the “superstar” tech firms in the US and Asia. Arguably no tech stock in Europe is a household name, certainly not one with the instant recognition of Apple, Samsung, Microsoft or Google. Nokia once came close when it was famed for its handsets. It lives on, albeit as a less conspicuous networks provider.

The Fed balance sheet and repo facility cannot explain the stock market’s movement in isolation

World economy 16th February 2020

Repo Facility: QE Or Not? It Does Not Matter

Unigestión | Whether it is called QE or not, buying bills (swapping reserves for short-term bonds), injecting liquidity into the market place and growing the balance sheet affects risky assets. Market conditioning (the Pavlovian effect) since the GFC is that stock markets cannot go down when the Fed is growing the balance sheet. Additionally, the Fed’s extremely aggressive response to the repo blowout in September is another signal to markets that it has a very low tolerance for market fluctuations.

How a government shutdown affects the economy

World economy 14th February 2020

Crédito y Caución Forecasts A 4% Increase In Insolvencies In The United States

Trade barriers are causing more insolvencies in the agricultural sector, while the retail sector is vulnerable to rising import costs. Crédito y Caución expects the United States to deepen its slowdown in 2020. The Spanish credit insurer expects GDP growth of 1.7%, largely supported by private consumption in the face of weak investment, public spending and exports. Although household finances are in better shape than a decade ago, among companies there has been an increase in debt and a deterioration in their credit capacity.

Which central bank blinks and cut rates first?

World economy 13th February 2020

Which Central Bank Blinks And Cuts Rates First?

TwentyFour Asset Management’s CEO Mark Holman thinks central banks will move on rates any time soon, but where the first move comes from might be harder to call. They are sure it will not be the UK, thank goodness and also sure it won’t be the ECB. It won’t be the US in the near future either.