Lord Rothschild buys gold, says low interest rates are ‘the greatest experiment in the history’

RIT Capital Partners published a half-year report for early 2016, in which Jacob Rothschild, the chairman of RIT and the head of the Rothschild household of England, explains his investment view for 2016.

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The dollar to fall as the GDP growth in 2Q radically weakens, secular stagnation looms

The US Bureau of Economic Analysis published the GDP data for the second quarter of 2016, and the real GDP growth turned out to be 1.23% (year-on-year), slowing down from 1.57% in the previous quarter. The US economy has been significantly slowing down in 2016 as we predicted last year, when it was growing more than 2%.

However, the published data this time suggests more detailed interpretation is necessary to predict the upcoming future of the US economy.

Continue reading The dollar to fall as the GDP growth in 2Q radically weakens, secular stagnation looms

Brexit reveals the bureaucratic ambition of the OECD

In the EU referendum the UK said no to the EU’s bureaucracy, and that was indeed the people’s refusal of any bureaucratic failures in general, in which the OECD should be counted, as proven by its own reactions to Brexit.

As a result of the referendum, the UK regained several rights of freedom, one of which is fiscal freedom. The EU imposes austerity to its member countries, and they are required to maintain their budget deficit below 3% of their GDP, and thus the UK is now ready to enjoy their freedom outside the EU.

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The break-even point of the US shale oil industry and its production decline

The earning releases of the US shale oil firms have been published in May 2016, whilst the oil price is rebounding from its bottom. The following is the chart of the WTI crude oil futures:

2016-5-30-WTI-crude-oil-weekly-chart

Then, how are the financial situations of the US shale oil industry? Would the financial results justify the recent rebound?

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2016 1Q Japan’s GDP: the economy grew negatively due to the market turmoil

In the first quarter of 2016, Japan’s real GDP grew -0.05% (year-on-year), slowing down from 0.85% in the previous quarter. This is the first time since 2013 for Japan’s economy to grow negatively, excluding the four quarters after the consumption tax hike.

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George Soros buys gold and a gold miner, short sells S&P 500

The Form 13F for the first quarter of 2016 has been published, and the portfolios of hedge fund managers revealed.

In the disclosure, Mr George Soros’s Soros Fund Management appeared to have started positions in gold and a gold miner and also to have continued short selling of US stocks as he claimed in Davos in January 2016.

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2016 US REIT forecast: the Fed’s rate hikes, rate cuts and quantitative easing

Since the first rate hike in Dec 2015, the Fed has been in the course of normalizing interest rates. Although we as well as many of the famed hedge fund managers expect the central bank will eventually cease raising rates and resume easing, it is still reasonable to assume one or two rate hikes in 2016 are still possible.

Even if it happens, rate cuts will follow it anyway, but it is important for investors to consider how to trade on the temporary monetary tightening. As federal funds rates futures expect only one rate hike in 2016, two rate hikes will be a surprise if it happens.

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2016 1Q US GDP: the slowdown continues, justifying the weak dollar

The GDP data of the US economy for the first quarter of 2016 is published, and the real GDP growth turned out to be 1.95% (year-on-year), slightly slowing down from 1.98% in the previous quarter.

2016-1q-us-real-gdp-growth

As the economic growth in mid 2015 was greater than 2%, the figure indicates the economy has decelerated after the Fed ceased quantitative easing.

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The oil prices rebound will not last: US shale industry still far from bankruptcy

The crude oil price is surging even after the disagreement in the oil producers’ meeting in Doha, but it will try its bottom again soon. The only thing that has changed in the oil market is the price, and the long-term oversupply of oils would not change as nobody is willing to cut their production.

2016-4-29-WTI-crude-oil-middle-term-chart

In the long-term chart, the oil price seems just trying to recover after a radical fall. Is this so-called a dead-cat bounce? We presume so and will explain the reasons.

Continue reading The oil prices rebound will not last: US shale industry still far from bankruptcy

Who was right about the US stocks in early 2016?: George Soros, Ray Dalio and Bill Gross

S&P 500 has recovered from the plunge in the beginning of 2016. Many famed hedge fund managers published their own view on the stock market, and who has been right so far? We would like to review the predictions by great investors such as George Soros, Ray Dalio and Bill Gross.

2016-4-20-s-and-p-500-chart

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Analysis and Practice in the Global Markets