Imperium Capital Publication

Global Matters Weekly – 29 June 2020

by Andrew Hardy, CFA

Not that there aren’t enough acronyms flying around the investment world already, but today I will reference a lesser known one – only to debunk it. TANSTAAFL: “there ain’t no such thing as a free lunch”. The etymology is uncertain, but the principle is intuitive; there aren’t many things in life that come for free without some form of cost, be it direct or indirect, explicit or implicit. However, there is one (and only one) in finance – diversification. Most famously highlighted by Harry Markowitz, Nobel Laureate and pioneer of investment theory, this has underpinned several decades of progress towards building more sophisticated, more resilient approaches to portfolio management.

Market Snapshot

  • Global reported cases of Covid-19 passes 10 million with over 500k deaths.
  • IMF revise outlook on global economy: now forecast a -4.9% contraction vs -3.0% previously.
  • Brent crude fell -2.8% ending the week at $41.0 a barrel
  • Gold rose 1.6% ending the week at $1771.3 an ounce

Global Matters Weekly – 22 June 2020

The Great Disconnect?
by Stephen Nguyen, CFA

There are few certainties in markets and economies and with most countries globally facing what could be the worst economic collapse in the post-war era, it is surprising to see markets and most risk assets continue their remarkable rebound. The shape of the recovery in risky assets certainly looks V-shaped today, as most markets have posted gains of around 30% since bottoming near the end of March. Is this a true reflection of what is going on in the underlying economy or is there a big disconnect?

Market Snapshot

  • Estimations now show that 24 of the 50 US states have a R value over 1
  • Oil prices rose for the 7th week out of the last 8 as OPEC+ confirmed output cuts
  • Brent crude rose 8.9% ending the week at $42.2 a barrel
  • Gold rose 0.8% ending the week at $1743.9 an ounce

Global Matters Weekly – 15 June 2020

Looking Forward
by Jackson Franks

For those of you that don’t know, this Friday is the mid-point of summer and as I have a Swedish partner this means there will be a celebration. Midsummer, or Midsommar in Swedish, is an annual celebration in Sweden which consists of a never-ending lunch party involving flowers in your hair, dancing around a pole and singing songs while drinking unsweetened, flavoured schnapps.

If that doesn’t sound fun enough you also get to down large quantities of pickled herring served with new potatoes, chives and sour cream, an acquired taste for sure. The Midsommar celebrations coincide with the middle of the year and I find it a great time to reflect on the prior six months and what the second 6 might bring. With COVID-19 impacting the way we have worked in the first half of the year let’s look forward at what the second half of the year may entail for the office sector.

Market Snapshot

  • The US’s longest expansionary cycle in history (128 months) officially ended
  • US stocks suffered their worst weekly decline in almost three months
  • Brent crude fell 8.4% ending the week at $38.7 a barrel
  • Gold rose 2.7% ending the week at $1730.8 an ounce

Global Matters Weekly – 8 June 2020

Playing the odds
by Robert White, CFA

While markets continue their remarkable rebound, the most important event for many people this month will be the return of the Premier League, something that cannot come soon enough for loyal fans (particularly Liverpool supporters). The resumption of top flight football provides a welcome distraction during these trying times as the German Bundesliga has already shown, even if the atmosphere is somewhat diminished by empty stadiums. The great thing about professional sport is that so much is captured by data, the quality and depth of which is extremely rich.

Market Snapshot

  • Global equities rallied to post-lockdown highs
  • Big upside surprise in US jobs data
  • Brent crude rallied 19.7% ending the week at $42.3 a barrel
  • Gold fell 2.6% ending the week at $1685.1 an ounce

Global Matters Weekly – 1 June 2020

The SpaceX Factor
by Alex Harvey, CFA

On Saturday night at 22:11 hours I was fortunate enough to see the International Space Station (ISS) blazing across the darkening London skyline at 17,000mph. For budding astronomers the Star Walk app points out where and when to look, and with it orbiting over 15 times per day you’ve plenty of opportunity to view it (the stunningly clear UK skies obviously help, as does the night sky to spot it reflecting the sun from above the horizon).

Market Snapshot

  • Widespread protests and riots are taking place across the US
  • Trump announced that Hong Kong would no longer receive a special trade status
  • Brent crude rose 0.6% ending the week at $35.3 a barrel
  • Gold fell 0.3% ending the week at $1730.3 an ounce