In last week’s commentary I mentioned that the Treasury does a biannual review on the currency practices of foreign governments. In five such reviews under the Trump administration, the Treasury department has declined to label China as a currency manipulator. That all changed yesterday.
Article Category: Dollar
Mr. Powell and the Fed continue to claim that their actions are data-dependent, but the question is beginning to arise: What data are they dependent on? The fact that many Fed officials have referred to this as an “insurance cut,” almost by definition suggests that fundamental economic data doesn’t justify a move lower.
Most investors, including myself, generally sit squarely within one of two camps: bullish or bearish. My research and observations over the years have left me with a rather simple premise on which to base this judgement. When the economy is expanding, remain firmly bullish, and when growth begins to slow and recession clouds gather, get bearish.
I want to begin today with a look at ACWI - the All-Country World Index ETF, which you can see in the top panel below. This ETF tracks the MSCI benchmark and provides exposure to large and mid-cap companies across 23 developed markets and 24 emerging markets. Approximately 85% of investable global equities are included in this index.
Anyone who’s ever taken a cruise before knows that the seas, though often calm, can quickly turn treacherous. Those like myself who are prone to bouts of seasickness therefore appreciate the inclusion of stabilizers on each side of a ship’s hull.
These stabilizers (see image below) act like flaps on an airplane, deflecting water as needed to minimize the rocking and rolling motion of the vessel. The end result is a steadier voyage, with fewer passengers needing to unload the contents of their stomach orally.