In the summer of 2016, Signature argued that markets were approaching a regime change. A multi-year deflationary impulse was fading and a reflationary turn was at hand. Commodity prices had stabilized and growth dynamics were improving along with financial conditions in the banking sector and credit markets. Populist political risks,...read more
Global industrial production has been in a cyclical rebound since the summer after more than a year of severe (but non-recessionary) slowdown which took the U.S. and global growth to multi-year lows. Inflation has also been in a cyclical upswing, especially in the United States...read more
In August, Signature postulated that markets were at a moment of regime change from deflation to reflation. In fact we had discussed, over the preceding nine months, the need for asset allocators to prepare to tack away from the consensus deflationary scenario. The changing policy mix held the key to timing. If fiscal policy replaced bond...read more
There is much to read into the changing global political landscape from the surprise Trump election win. Eric Bushell's commentary/blog post from November 9 “And Now For Something Completely Different” articulated our thoughts on the long-term economic impact of the increasing populism, as demonstrated by the Trump victory.
In the...read more
Last night’s election results remind me of the 1971 Monty Python album “And Now for Something Completely Different.” Donald Trump is president-elect of the United States.
The good news is that we have a clear winner with a clear mandate to “Make America Great Again.” Trump is the polar opposite candidate to President Obama. His election...read more
A Clinton win will re-establish current market trends in equities and bonds as well as monetary policy, with a likely rate hike in December. We have a bias towards a slightly higher U.S. dollar against non-cyclical currencies (i.e. Euro) but see the greenback underperforming cyclical currencies such as emerging markets. We...read more
The biggest news that has gotten even the most lively of boring REIT analysts excited has been the recent Global Industry Classification Standard (GICS) index inclusion of real estate as its own sector. Just reading that previous sentence makes me feel dull. Though I do believe it has serious significance.
This is the first time in its...read more
At Signature, we have been max underweight exposure to equity since the summer of 2014 and we have been defensively minded since the beginning of former Chairman Bernanke’s taper in May 2013. This view changed in August. Now, three years and four months later, we are re-engaging risk. For the first time in this period, financial conditions in...read more
Bonds make the world go round
By the turn of the 20th century, W.S. Gilbert’s famous expression, “love makes the world go round” infamously morphed into “money makes the world go round.” The latter withstood the test of time and was even cleverly adapted into a song for an American musical in the early 1970s: “Money...read more
It looks like I may have to hitchhike again when I go on my next trip to Midland, Texas to meet with some of the Permian companies that we hold in our portfolios. On my first visit there about six years ago, I wasn’t able to find a cab to take me from the airport to my hotel – but excitement and activity were at a fever pitch in the area at...read more