Global ETF News Older than One Year
Trade sentiment and the stock market: new evidence based on big data textual analysis of Chinese media
January 12, 2021--Abstract
Trade tensions between China and US have played an important role in swinging global stock markets but effects are difficult to quantify. We develop a novel trade sentiment index (TSI) based on textual analysis and machine learning applied on a big data pool that assesses the positive or negative tone of the Chinese media coverage, and evaluates its capacity to explain the behaviour of 60 global equity markets.
We find the TSI to contribute around 10% of model capacity to explain the stock price variability from January 2018 to June 2019 in countries that are more exposed to the China-US value chain. Most of the contribution is given by the tone extracted from social media (9%), while that obtained from traditional media explains only a modest part of stock price variability (1%). No equity market benefits from the China-US trade war, and Asian markets tend to be more negatively affected. In particular, we find that sectors most affected by tariffs such as information technology related ones are particularly sensitive to the tone in trade tension.
Source: bis.org
Upward-scaling tipping cascades to meet climate goals: plausible grounds for hope
January 10, 2021--ABSTRACT
Limiting global warming to well below 2 °C requires a dramatic acceleration of decarbonization to reduce net anthropogenic greenhouse gas emissions to zero around mid-century. In complex systems-including human societies-tipping points can occur, in which a small perturbation transforms a system.
Crucially, activating one tipping point can increase the likelihood of triggering another at a larger scale, and so on. Here, we show how such upward-scaling tipping cascades could accelerate progress in tackling climate change.
We focus on two sectors-light road transport and power- where tipping points have already been triggered by policy interventions at individual nation scales. We show how positive-sum cooperation, between small coalitions of jurisdictions and their policymakers, could lead to global changes in the economy and emissions. The aim of activating tipping points and tipping cascades is a particular application of systems thinking. It represents a different starting point for policy to the theory of welfare economics, one that can be useful when the priority is to achieve dynamic rather than allocative efficiency.
Source: tandfonline.com
BetaShares-Market Trends: January 2021 Interest rates-gradual lift likely
January 6, 2021--Long-term bond yields continued to creep gradually higher in December as the prospect of further significant near-term monetary stimulus eased in line with an improving global economic outlook.
U.S. 10-year government bond yields ended the month at 0.92%, and Australian 10-year rates at 0.97%- implying a small positive spread for local rates of 0.05%.
This compared with a daily low for U.S. 10-year yields of 0.5% on August 4, and 0.62% for local yields on 9 March. U.S. rates have lifted modestly more than local rates in recent months, with the bond spread contracting from a month-end peak of 0.29% at end-July.
Source: betashares.com.au
F&D: The Jobs of Tomorrow
January 5, 2021--Some jobs will disappear and others will emerge as the world faces a dual disruption
The World Economic Forum's Future of Jobs Report 2020 comes at a crucial juncture for the world of work. The report, now in its third edition, maps the jobs and skills of the future, tracking the pace of change based on surveys of business leaders and human resource strategists from around the world.
This year, we aim to shed light on the effect of pandemic-related disruptions placed in the broader context of longer-term technology trends. Here are the five things you need to know from our findings.
1. The workforce is automating faster than expected, displacing 85 million jobs in the next five years. Automation, in tandem with the COVID-19 recession, is creating a "double-disruption" scenario for workers. Companies' adoption of technology will transform tasks, jobs, and skills by 2025. Some 43 percent of businesses surveyed indicate that they are set to reduce their workforce because of technology integration, 41 percent plan to expand their use of contractors for task-specialized work, and 34 percent plan to expand their workforce as a result of technology integration.
Source: Saadia Zahidi,World Economic Forum and IMF
Global Economy to Expand by 4% in 2021; Vaccine Deployment and Investment Key to Sustaining the Recovery
January 5, 2021--Development risks remain as economic activity, incomes likely to stay low for extended period
The global economy is expected to expand 4% in 2021, assuming an initial COVID-19 vaccine rollout becomes widespread throughout the year. A recovery, however, will likely be subdued, unless policy makers move decisively to tame the pandemic and implement investment-enhancing reforms, the World Bank says in its January 2021 Global Economic Prospects.
Although the global economy is growing again after a 4.3% contraction in 2020, the pandemic has caused a heavy toll of deaths and illness, plunged millions into poverty, and may depress economic activity and incomes for a prolonged period. Top near-term policy priorities are controlling the spread of COVID-19 and ensuring rapid and widespread vaccine deployment. To support economic recovery, authorities also need to facilitate a re-investment cycle aimed at sustainable growth that is less dependent on government debt.
view the World Bank January 2021 Global Economic Prospects-Subdued Global Economic Recovery
Source: World Bank
Passive investing presents a challenge for decarbonisation. Here are six projects we're backing to help change things
January 4, 2021--The Hewlett Foundation recently awarded $2.45m to 'climate-forward' passive asset management. Marilyn Waite explains why.
With thousands of fixed-income and public equity funds on the global market, retail and institutional investors face difficulty deciphering which are climate-forward at best, and not harmful to the planet at least.
Efforts such as France's SRI label help as a first filter for what may qualify, but most funds are not aligned with decarbonisation. To make matters worse, computer algorithms are taking over asset management, and the rules are programmed to track an uninhabitable world.
Over $100trn is invested through the asset management industry. In the US, 80% of employer-sponsored retirement plans are stuck in the default allocation offered; and this default is most often a passively-managed fund that directs capital to high carbon emitting projects and companies. While at least $17trn of professionally managed funds now consider ESG factors, the incorporation of climate risk and impact is not at scale. One of the culprits preventing the decarbonisation of asset management is the use of passives, where a fund's portfolio mirrors a high-carbon market index.
Source: responsible-investor.com
A $13 Trillion Debt Bill Comes Due for Big Economies
January 4, 2021--G-7, emerging economies face biggest refinancings in decade
Central banks in pandemic-fighting mode to keep yields low
The world's biggest economies shouldering record debt burdens are about to confront an unwelcome legacy of the financial crisis: a $13 trillion debt bill.
The Group of Seven nations plus key emerging markets face the heaviest bond maturities in at least a decade, much of them borrowings to dig their economies out of the worst slump since the Great Depression. According to data compiled by Bloomberg, these governments may need to roll over 51% more debt than in 2020.
Source: bloomberg.com
Bitcoin Blasts Past $34K for First Time, Less Than 24 Hours After Blowing Through $30K
January 3, 2021--Another day, another $1,000-plus increase in bitcoin's price, bringing the leading cryptocurrency's combined gains this new year to about $5,000.
The price of bitcoin surged past $34,000 for the first time ever early Sunday morning Eastern time, extending a record-setting holiday rally and adding an immediate exclamation point to the Bitcoin Network's 12-year anniversary.
Source: coindesk.com
Global Policy Responses to Capital Flow Volatility
December 23, 2020--The COVID-19 health and economic crisis has once again focused attention on the fickleness of capital flows and the need to have an adequate policy toolkit to manage the risks that stem from these flows, while maximizing their benefits.
A virtual workshop organized by the Bank of England, Banque de France, International Monetary Fund and the Organization for Economic Co-operation and Development (OECD) highlighted risks emerging from the changing landscape of global capital flows and the need for greater international efforts to address these including by broadening the regulatory perimeter.
Source: IMF
Precious Metals Outlook: December 2020
December 23, 2020--Outlook for 2021
The background for 2021's outlook shows sentiment quite stretched in one direction. Multi-asset investors lament rich valuations in both stocks and bonds despite the potential for extensive and transformative policy changes under a new U.S. administration, which would warrant higher uncertainty discounts.
The S&P 500 Index's CAPE Ratio is double its historical mean.0F1 The CAPE ratio is a measure of stock prices divided by inflation-adjusted earnings adjusted for the economic cycle. A higher CAPE ratio means you are paying more for a stock's earnings. Bond valuations are not much better. The amount of negative-yielding sovereign bonds recently hit a new record of $17.1 trillion. It is hardly a stretch to say one of the few asset classes that could be considered "value" is commodities.
Source: Aberdeen Standard Investments
