VanEck’s Post

The authors explore the early warning properties of a composite indicator which summarizes signals from a range of #assetprice growth and asset price volatility indicators to capture mispricing of risk in asset markets. Using a quarterly panel of 108 advanced and emerging economies over 1995-2017, they show that the combination of rapid asset price growth and low asset price volatility is a good predictor of future financial crises. Elevated levels of our indicator significantly increase the probability of entering a crisis within the next three years relative to normal times when the indicator is not elevated. The #indicator outperforms credit-based early warning metrics, a result robust to prediction horizons, methodological choices, and income groups. Their results are consistent with the idea that measures based on asset prices can offer critical information about #systemicrisklevels to policymakers. #risks #assetmarkets #assetprice #financialcrises #policymakers

Strong sentiment in risk assets broadened in July with all major sub-asset classes posting positive returns. Global equity markets delivered gains for a third consecutive month, led more recently by a rebound in Chinese equities. Our latest global market review from Jack Peglar, Senior Research Analyst, is now available on our website. #marketinsights #equities #inflation #investmenttrusts

An interesting Bloomberg article if you are long-term investors : "It’s Dangerous to Stay Out of Stocks" "This is possibly the most important “money chart,” showing the total range of returns for different asset classes in the US since the Barclays data starts in 1925. Over short periods, it confirms that equities can inflict really serious losses; the greatest on record have been worse than for bonds and equities. But the longer term is your friend. Over no 20-year period since 1925, a span that includes both the stock market crash of 1929 and the global financial crisis of 2008, have equities failed to beat inflation. That cannot be said of any other asset class."

While global equities have been focused on moves in interest rates over the last month, earnings estimates have been moving higher. Earnings revision momentum is gaining in most global markets with high energy-sector weights. Our proprietary earnings revision momentum series are all available on your @bloomberg terminal at BI STOXG <Go>. Bloomberg Intelligence

US investors are now pricing in only a 10% probability of a rate cut at the March FOMC with an eye on the June meeting instead. One to watch is the current disconnect between the declining sentiment in the UK/Europe and rising markets, which seems odd. In our experience divergence between markets and sentiments is unsustainable over time and usually reverts towards each other. Have a look at the rest of our sentiment analysis here: https://hubs.la/Q02lvvwK0

Global equity markets saw a generally positive start to the summer months! Here’s our latest market update with everything you need to know about how the global markets performed in June and July.

Weekly Market Summary for the week of 09/15/2023: Equity Markets Mostly Unchanged as Fed Meeting Looms https://lnkd.in/gTC-56d8 #AmericanTrustCustody #WeeklyMarketSummary

The impact of inflation on financial markets remains a concern. Recent research indicates that combining sentiment analysis with traditional methods can provide valuable insights to navigate inflationary periods. We explored a multi-asset allocation strategy that invests in equities, commodities, and bonds, based on sentiment analytics and inflation nowcasting. In our backtesting, the strategy was compared against the US equity market, a 10-year US government bond, and six conventional commodity indexes. It outperformed the benchmarks with better returns, lower volatility, and a superior Sharpe ratio during inflationary periods. Learn more with these free resources: https://lnkd.in/dCRfRNV7

𝗧𝗵𝗲 𝗺𝗼𝘀𝘁 𝗰𝗿𝗼𝘄𝗱𝗲𝗱 𝘁𝗿𝗮𝗱𝗲 𝗳𝗼𝗿 𝟮𝟬𝟮𝟰: BofA’s latest fund manager survey showed investors were dumping cash to hold the biggest overweight position in bonds since 2009. The “big change” was not the macro outlook, but expectations that inflation and yields will move lower in 2024. 61% of Fund Managers are predicting that long-term bond yields will be lower in 2024. This expectation surpasses even the peak of the Global Financial Crisis when only 40% of managers expected lower long-term bond yields the following year.

🔔 The October Emerging Market Lens is now published 🔔 Separate equity and debt chartbooks/presentations, packed full of data and insights, to help you navigate the world of emerging markets (EM) 📈 📊 📉 Here are eight key charts from this month’s decks... 1️⃣ EM small caps handsomely outperforming EM Large caps (and DM) YTD 2️⃣ Value is the best performing EM factor YTD 3️⃣ YTD EM country return dispersion high: outperformers from all regions 4️⃣ Hard EMD issuance is well below the five-year average 5️⃣ Where is the value in EMD? 6️⃣ How do EM equity valuations look by country? 7️⃣ What to watch: -         When will dollar strength dissipate? -         What is the outlook for EM earnings in 2024? 8️⃣ Watch to watch: -         Energy and food prices -         What do higher crude prices mean for different EM? Loads more charts and insights in the full pack, link in the comments below 👇 #schroders #emergingmarkets #investingstrategy #EMequities #EMD #currencies