📑 Research Notes for 2022-07-11
This week, we look at Shinzo Abe's assassination, the kick-off of quantitative tightening, Goldman's view on the current commodity dip, and Calper's private equity liquidation.
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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Short Video of the Week
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China Threatened A ‘Collision’ If Japan’s Abe Didn’t Stop Backing Taiwan.
Before his assassination on Friday, Shinzo Abe had continued to express support for Taiwan’s defense against a potential Chinese invasion, despite warnings from China. In November 2021, Abe announced plans to visit Taiwan, which were described by the media as an attempt to constrain his successor Prime Minister Fumio Kishida from increasing Japanese relations with China and to instead maintain close ties with Taiwan.
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Fed’s Quantitative Tightening Kicks Off, New Monetary Era Begins.
Total assets on the Fed’s weekly balance sheet as of July 6, released this afternoon, fell by $22 billion from the prior week, and by $74 billion from the peak in April, to $8.89 trillion, the lowest since February 9, as the Fed’s quantitative tightening (QT) has kicked off. The zigzag pattern is due to the peculiar nature of Mortgage Backed Securities (MBS) that we’ll get to in a moment.
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Goldman Says Commodities Outlook Strong, Pullbacks A Buying Opportunity.
The fundamental outlook for commodity prices is strong with inventories of metals and energy continuing to fall from low levels, Goldman Sachs said, terming a recent price pullback as longer-term buying opportunities. Commodities markets have been oversold, de-linking with supply-demand fundamentals, the bank said in a note dated July 7.
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Calpers Sells $6 Billion of Private Equity at Discount.
The California Public Employees' Retirement System sold about $6 billion of its stakes in private equity funds to second-hand buyers.
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Last Week’s Market Performance Heatmap
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Curated by Joseph Lu, CFA®
Joseph is the founder and managing director of Conscious Capital Advisors and a CFA® Charterholder.
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