Research
Macroeconomic Updates and Equity Research
Macroeconomic Update
March 7, 2023
The newsletter discusses the state of the rail industry in the United States, primarily focused on the freight rail industry, which is dominated by a few large companies. The article highlights factors affecting the industry, including a decline in consumer demand for goods, the risk posed by transformative energy policies that aim to eliminate fossil fuels, plateauing efficiency gains, and the impact of labor strikes. The article also notes a decline in EBITDA multiples for railroads since Q3 2020, indicating a possible overvaluation of the industry during the pandemic and a subsequent decline in value.
Macroeconomic Update
February 28, 2023
The airline industry is still feeling the effects of the COVID-19 pandemic, with passenger traffic not predicted to recover to pre-pandemic levels until 2024, according to the International Air Transport Association. Despite the challenges, airline alliances have played a critical role in helping the industry recover. The global airline industry is expected to grow in the coming years, driven by a growing middle class and increased consumption from developing nations. However, the industry is cyclical and vulnerable to macroeconomic factors and consumer spending patterns. The expected net profit of airlines in 2023 is $4.7 billion, with a 0.6% net profit margin, backed by lower oil prices and pent-up demand. M&A is expected to be another feature of the industry in the near future, with airlines being forced to restructure after debt obligations built up during the pandemic.
Macroeconomic Update
February 21, 2023
This newsletter provides a comprehensive overview of the ways in which Artificial Intelligence (AI) is transforming the business world. The discussion begins with an examination of OpenAI's (ChatGPT) business model, which serves as an example of cutting-edge AI research and development. The newsletter then explores the effects of AI on various industries, highlighting the benefits and challenges of adoption. Additionally, the newsletter delves into the ethical considerations associated with advanced AI implementation. Overall, this newsletter serves as a valuable resource for individuals interested in understanding the complex intersection of AI and business.
Macroeconomic Update
February 14, 2023
This report offers a comprehensive analysis of the Metals and Mining sector, focusing on key industry developments and trends. A broader outlook of the sector is provided, which encompasses potential growth drivers and the current market landscape. The report also delves into an examination of supply and demand dynamics, providing insight into the key factors that are shaping the sector's performance. Furthermore, this report explores the lithium, nickel, and copper markets in greater detail, examining the various drivers that are influencing their performance.
Macroeconomic Update
February 2, 2023
This newsletter offers an overview of Deutsche Bank and Credit Suisse, examining recent events that have impacted both companies and potential future scenarios. The report also provides an analysis of their balance sheets and looks at how the markets prices their 5-year bonds. This analysis provides valuable insights for people looking to better understand the challenges and opportunities facing these institutions and can inform investment decisions and strategies in the FIG & Fixed Income sectors.
Macroeconomic Update
February 2, 2023
In this report, we provide an overview of China's economic landscape during the reopening phase that commenced in the latter part of 2022, along with projections for China's fiscal policy direction in 2023. Additionally, the newsletter delves into a comprehensive analysis of the systematic economic challenges that China is presently confronting by examining the real estate market bubble and retracing the roots of the Evergrande Liquidity Crisis.
Macroeconomic Update
January 31, 2023
The growth in nonfinancial corporate business has a very high positive correlation to the growth in the major economic indicators: industrial production, personal consumption expenditure, and real gross domestic product. In contrast, it has a negligible negative correlation with the unemployment rate. Additionally, the percentage change in nonfinancial corporate business has a strong positive correlation to the percentage change in personal consumption expenditure, percentage change in real gross domestic, and percentage change in industrial production. It also has a weak positive correlation with the percentage change in unemployment rate.
Macroeconomic Update
January 18, 2023
The actions of the Bank of Japan (BoJ) and its potential changes to its yield curve control (YCC) policy have the potential to impact global markets, particularly in the United States. The BoJ's policies and their impact on the housing market are closely monitored as historical trends indicate that it serves as a leading indicator for the overall economy during times of recession. In its most recent meeting, the BoJ decided to maintain its YCC policy as outlined in its quarterly outlook report. Market participants generally expect the BoJ to continue its ultra-loose monetary policy and YCC policy until the tenure of Haruhiko Kuroda, the head of the BoJ, concludes at the end of March.
Macroeconomic Update
November 15th, 2022
The Brazilian Real has been one of the strongest emerging market currencies this year, appreciating 4% against the dollar YTD, making it the only currency to appreciate against the dollar besides the Mexican Peso. Looking at the US Dollar Index (DXY), an index that measures the value of the dollar against a basket of US trade partner’s currencies, is currently up 11% YTD, reaching as high as 19% before the latest CPI report has shifted monetary policy expectations and lowered the expected terminal rate by 25bps
Macroeconomic Update
November 8th, 2022
In 2021, there was an average of a 7% increase in poultry, eggs, and beef. This has been felt strongly by consumers due to the gap between wholesale to retail expanding. This gap is due to the increased costs of labor, trucking, logistics, and fuel cost. More recently, in 2022 egg and poultry prices increased significantly more than any other food category. This is a result of the recent outbreak of avian flu. Retail egg prices decreased 3.5 percent in September 2022 but were 30.5 percent higher than September 2021
Macroeconomic Update
November 8th, 2022
In 2021, there was an average of a 7% increase in poultry, eggs, and beef. This has been felt strongly by consumers due to the gap between wholesale to retail expanding. This gap is due to the increased costs of labor, trucking, logistics, and fuel cost. More recently, in 2022 egg and poultry prices increased significantly more than any other food category. This is a result of the recent outbreak of avian flu. Retail egg prices decreased 3.5 percent in September 2022 but were 30.5 percent higher than September 2021
Media and Telecommunications One-Pager
November 1st, 2022
Meta Platforms, Zuckerberg’s company. Since the beginning of Facebook, it has been Zuckerberg’s vision that has led the company forward. From expanding from the small social media platform, to acquisitions and an IPO, it has gone along with Zuckerberg’s plan. Even as the company has experienced downturns, Zuckerberg’s majority ownership has not wavered and will remain within the company for the future. The future of Meta as a company lies where Zuckerberg sees value.
Macroeconomic Update
October 25th, 2022
Rising interest rates have taken an ax to one of the pandemic’s hottest commodities. Wood prices crashed in the early days of the 2020 lockdown but later exploded that summer when Americans stuck at home increased their home improvement projects. 2x4 prices tripled the pre-pandemic record in an early sign of the inflation and broken supply chains that would hinder the economy reopening.
Macroeconomic Update
September 28th, 2022
Broader dollar strength has put pressure on all global currencies including the British Pound. GBP/USD struggles to find a bottom, which was exacerbated by the UK Chancellor Kwasi Kwarteng revealing large tax cuts and increased borrowing over the weekend. The sterling has been in a downtrend against the dollar and euro for the entire year, as inflation has hit the UK harder than most other European countries.