Judging by the headlines, there’s a lot to worry about. But if markets are anxious it’s not obvious in the year-to-date results for the major asset classes, which are posting across-the-board gains in 2025 via a set of ETFs through Monday’s close (Jan. 14).
Category Archives: Uncategorized
Macro Briefing: 15 July 2025
Nvidia receives approval from the Trump administration to sell its advanced H20 computer chips used to develop artificial intelligence to China. “The US government has assured Nvidia that licenses will be granted, and Nvidia hopes to start deliveries soon,” the company’s CEO Jensen Huang wrote on social media.
Will Tariffs Derail The Bull Run In Global Equities Ex-US?
A single decision has been crucial for a global equities strategy this year: selecting the weights for foreign vs. US stocks. The higher the weight in shares outside the US, the higher the performance so far in 2025. But as President Trump presses ahead with plans to raise tariffs, it’s reasonable to wonder if the gravy train in foreign stocks will persist in the face of an aggressive US trade policy.
Macro Briefing: 14 July 2025
As companies begin to report Q2 earnings this week, investors will be alert to the possibility that tariffs are putting pressure on profits. “So far, the impact of tariffs has been very muted when it comes to economic data on inflation, consumer spending, and business activity,” notes Morningstar. Factset projects that S&P 500 earnings will increase 4.8% for Q2, an estimate that marks the lowest earnings growth reported since the 4.0% rise for Q4:2023.
Book Bits: 12 July 2025
● Should the World Fear China?
Zhou Bo
Summary via publisher (Hurst)
For Washington, China is a strategic competitor: the only country with both the will to reshape the world order and, increasingly, the means to do so. For Europe, the People’s Republic of China (PRC) is a ‘partner for cooperation, an economic competitor and a systemic rival’. For NATO, it is a ‘decisive enabler’ of Russia’s war against Ukraine. Yet Beijing’s image is far more positive in the Global South, of which the PRC considers itself a part. Zhou Bo’s essays unpack China’s own view of its role today. The author is a senior fellow at Tsinghua University’s Center for International Security and Strategy and a retired senior colonel in the People’s Liberation Army. China is operating not only in a world becoming less Western, but—more importantly—a West becoming less Western; and the key to its outlook lies in Africa, the Middle East and the Indo-Pacific as much as in Europe and the White House. Are Moscow and Beijing really so closely aligned? Where are Sino-Indian relations headed? Is China a new Cold War foe for the West? Or will economic ties inevitably bring the two powers closer together?
Research Review | 11 July 2025 | Risk Factors
Factoring in the Low-Volatility Factor
Amar Soebhag (Erasmus University Rotterdam), et al.
June 2025
Low-volatility stocks have historically delivered higher risk-adjusted returns than their high-volatility peers. Despite extensive evidence and widespread adoption in the investment industry, the so-called low-volatility factor is absent from standard asset pricing models. This paradox is attributable to asymmetry in factor legs and real-life investment frictions. A low-volatility factor substantially improves performance of factor models once accounting for these dimensions in various in-sample and out-of-sample exercises, across different low-risk measures and across methodological choices. We advocate integrating the low-volatility factor into asset pricing models, accounting for the asymmetry and frictions.
Macro Briefing: 11 July 2025
US initial jobless claims fell for a third straight week, returning to a middling range relative to recent history. The decline in recent weeks suggests that the labor market will remain resilient, providing the Federal Reserve with support for delaying interest-rate cuts.
Momentum Is Still 2025’s Top Performer For Equity Risk Factors
In a dizzying year of economic news, along with numerous twists and turns in financial markets, the performance leadership for the momentum factor stands out as a hardy perennial year to date. This equity risk factor continues to outperform the rest of the field, as well as the broad US stock market, based on a set of ETFs for year-to-date trading through yesterday’s close (July 9).
Macro Briefing: 10 July 2025
Global financial markets are becoming “desensitized” to President Donald Trump’s tariff decisions, advised CGS International Securities Group Chief Executive Carol Fong. “Look what happened in the last two days when the tariff (deadline) lapsed, the market didn’t react badly and I think the market itself has been a bit desensitised”. In the US, shares traded up on Wednesday and the S&P 500 Index closed just below a record high that was reached earlier in the week.
Economic and Financial Predictions: Betting Markets | 09 July 2025
There are numerous ways to predict economic and market outcomes, each with its own set of pros and cons. One of the more recent arrivals in the realm of trying to divine the future is the rise of prediction markets — platforms where individuals can wager on the outcome of future events and track the estimates in real time. The future’s still uncertain and no one has a crystal ball, but monitoring the estimated probabilities for various macro events offers another source of analytics, if only to compare with the implied probabilities from the usual suspects. On that basis, here’s the first installment for what will be a periodic review of wagers for several economic and financial expectations. The sources for this update: Polymarket and Kalshi. Meanwhile, one thing that hasn’t changed for predictions from any source: Caveat emptor! Note, too, that the predictions shown below reflect a moment in time (earlier today). For the latest updates, click on the links.