📑 Research Notes for 2021-05-24
This week, we look at the a negative economic surprise index print, types of inflation, reversal of investing trends, the fading stimulus effect, and evidence of insider giving.
We conduct extensive investment research and share the most interesting content that we come across every week. Here is a curated list of this week’s top observations.
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The Citi US Economic Surprise Index Just Went Negative for the First Time Since Last June.
(Bloomberg)
Citi’s Economic Surprise Index — which measures the degree to which economic data is either beating or missing expectations — is at its lowest level in nearly a year. And if we have a few more disappointments, it could go negative.
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Is It Time to Panic About Inflation? Ask These 5 Questions First.
(New York Times)
To understand why inflation is so worrying to so many people, you could look at price charts for lumber or used cars or New York strip steaks. There is no doubt that the prices of many of the things people buy are rising at an uncomfortably rapid rate. But to really understand why there is a persistent longer-term buzz of inflation concern, you have to wrestle with the ways in which money itself is fundamentally ephemeral.
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Everything That Worked Last Year Isn’t Working This Year.
(A Wealth of Common Sense)
It’s interesting to note what else has been crashing of late:
Highly-priced growth stocks are crashing.
Even lumber futures are finally coming back down to earth.
Pretty much everything that worked last year has now crashed.
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Is the Stimulus Effect Fading?
(Bloomberg)
The boost from the U.S. government’s $1.9 trillion Covid-19 relief package, launched in March, may already be fading. Retail sales showed unexpected weakness in April, defying forecasts, while at the same time, the savings rate skyrocketed. What does the data reveal about the post-stimulus economy?
🔗 Watch Here
Insider Giving is Far More Widespread Than Previously Believed.
(SSRN)
Insider giving (donating stock to a charity and taking a charitable tax deduction at the inflated stock price) is a potent substitute for insider trading and is far more widespread than previously believed. Large investors regularly receive material non-public information and use it to avoid losses.
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Curated by Joseph Lu, CFA®
Joseph has over a decade of experience as an investment professional, primarily in quantitative analysis and portfolio management roles. He is the founder and managing director of Conscious Capital Advisors and a CFA® Charterholder. The CFA charter is a globally respected, graduate-level investment credential by the CFA Institute, a global association of more than 90,000 investment professionals working in over 133 countries.
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