11/17/2021

We've recently released a short report that looks at the further signs of the slowing global economy and implications for asset management.

KEY POINTS:
- Economic Cycle in Transition
- How markets have responded
- 'Air pocket' Developing in Equity Markets
- 'Looking ahead'
- 'Conclusion'

Further signs of slowing in the global economy have begun to shine a light in the post-pandemic world in the past quarter. For strategic investors, our message is to continue to hold their risk allocations with a view to mitigating the inflation risk to bonds by diversifying their asset class exposures.

We are living through an era most analogous to the post-war period in the 1940's that was categorised by 'financial repression' (bond yields held below the rate of inflation).

For tactical investors, our message is that they should begin to look at ways to hedge or reduce portfolio risk 'selling on strength' in Q4, as we expect an increase in cyclical risks to trade-off against complacent investor positioning by 22Q1.

To read more click the link below:

https://lnkd.in/evZBbKJD

10/19/2021

The Chinese leadership is not ready to loosen rules on the real estate sector until examples are made of... expect volatility due to uncertainty caused by brinkmanship.

https://lnkd.in/g_6cxbBU

Our quantitative models indicate that 30-day S&P500 returns at this point between -3.3% - 4.7% however note the highlighted potential for a tail event.

Risk management is key in this environment. As the stimulus fades it's prudent to be mindful of the potential for more cracks / spill-overs to appear.

We're here to help, feel free to reach out and learn more.

10/14/2021

The wealth creation of China's real estate fuelled credit boom has been a tide lifting the global economy for many years. This wealth spilled out into global markets and more specifically international real estate markets (e.g. Australia and Canada), as well as international exports (e.g. Australian raw materials).

Now that this tide is fading, as punctuated by the Evergrande crisis, the PBOC is facing a difficult balancing act which has a high risk of a policy misstep. China needs to find a challenging sweet spot so that slowing credit growth does not cause a global slump which then feeds back into slowing demand for Chinese exports, thus making their domestic position even more challenging.

CheckRisk's Early Warning Risk Service is designed to help you navigate today's globally interconnected markets. If you're looking to identify opportunities, manage risk and be rewarded for the risks you take, this could be for you.

10/7/2021

Wondering if your investments are contributing to the solution or the problem?

CheckRisk exists to help you navigate through these risk-responsibility-reward trade offs.

Within every emerging risk there's an emerging opportunity. For example, new early stage research indicates the potential for greenhouse gas (CO2) to be converted into chemical fuel using single atom catalysts.

https://lnkd.in/g_mZVhmA

Our socially responsible investment methodologies help you balance risk-responsibility-reward so that you can be on the right side of history.

9/30/2021

This week Elizabeth Warren opened up on Jerome Powell labelling him a "dangerous man" and vowed to oppose his renomination. Biden is currently under mounting pressure from the "progressive" side of his party to remove Powell. Since the start of Sept Brainard's odds have risen according to Predictit. Although Powell remains the favourite at 75% of renomination, 24% Brainard is not probability to ignore.

https://lnkd.in/ghF8ChMa

Situational awareness of event risks (and opportunities) is becoming increasingly important in today's changing markets.

We help investors understand and manage the interconnectivity of risk. Reach out to find out more about our services.

9/20/2021

Our short report looks at the rising risks in China and implications for portfolio management.

Key points:
· We remain underweight China
· The technical default of Evergrande represents a short-term tail risk to global financial markets
· We expect the Chinese government to intervene and rescue Evergrande to mitigate the consequences
· Our base case is that we expect a slower than desirable resolution that will negatively impact Chinese growth and international financial markets between now and Q4.
· Geopolitical considerations (from recent western national security deals, Cop26 summit, Communist Party Congress in 22H1) will weigh on the timing.
· An opportunity for Chinese risk assets will emerge when the rate of change of credit provision within China turns positive, accompanied by policy signalling a comprehensive solution to the Evergrande default.

https://lnkd.in/gAAtzhFr

You're most welcome to reach out and find out more👍

9/2/2021

Research from Dallas Fed indicates that US house prices influence rent on a 16-18 month lag meaning pent up inflation from last year's stimulus will contribute +0.5% to Core PCE inflation by December 2023 relative to prepandemic (2017-19).

https://lnkd.in/gf-QNgek

We're here to help you manage investments and risk through this challenging economic period. Feel free to reach out👍

8/10/2021

The lambda variant is becoming a variant of significant interest, but the bigger picture is even more important. The mutations present in the Lambda spike protein confers increased infectivity and immune escape from neutralizing antibodies of CoronaVac. Fortunately BNT162b2 (Pfizer) and mRNA-1273 (Moderna)-elicited antibodies still show modest neutralization resistance against Lambda variants.

However with COVID still racing through populations around the globe the potential for new mutations persists. The 1918-20 'Spanish' flu lasted for 2 years and consisted of 4 waves. Vigilance is prudent at this moment 👍

https://lnkd.in/gWSAY_8g
https://lnkd.in/gQnsx5Uz

CheckRisk is here to ensure you're risk is rewarded. We help you navigate through the risk and uncertainty.

If risk-reward is of interest to you, ask us about our risk management and asset advisory services?

07/07/2021

The path of the global economy and particularly rates is less certain relative to expectations in 21H2, according to our models. Policy makers will be tempted to withdraw COVID relief and central banks will toil with the "transitory" vs "secular" inflation question.

Given this backdrop, US Quality and US Growth are showing themselves to be resilient in the current environment having been standout performers over 3 weeks, 3 months, YTD and 12 months. We had previously tactically favoured value (low equity duration) vs growth (high equity duration) for the US in 21H1 but now with the path of rates less certain a lean towards Quality, Growth and Large-cap may be prudent on a risk-reward basis whilst the world waits for the central banks next move.

05/07/2021

With the Big Banks kicking off Q2 Earnings season soon we'll be looking for indications on the robustness of the recovery, and outlook for the rest of the year.

Our Bank Risk Monitoring shows risk returning close to pre-pandemic levels, with pockets of uncertainty remaining in Europe. The data and guidance released over the next month or so will be crucial for determining how solid this position is.

16/06/2021

Evidence that risk is incorrectly priced? Greek 5 year bond is now *negative*, despite being one of the most indebted countries in the world with a debt-to-GDP similar to Sudan and Venezuela.

We're here to help you risk manage through this quagmire. We provide an Early Warning Risk service that gives you information and actionable insights so you can be rewarded for the risk you take.

03/06/2021

Financial system contagion is not instantaneous, it takes time. It took around 2 months for the collapse of Grensill to catch up with Italian institution Aigis and force a firesale.

Responsive credit metrics allow you to act to secure your assets wherever possible. You can find out about the current position of major institutions in our Monthly Bank Risk Update.

(https://www.ft.com/content/c02a6e97-5505-4d4a-933f-a0e934ca6eda)

10/05/2021

European and US Banks have been posted record profits for Q1 2021. The apparent resilience of the economic recovery has allowed money set aside to cover losses to be reduced, while emergency funds and stimulus enabled deposits to increase to record levels, they are up 15% on last year at the four largest US lenders.

Meanwhile, the Fed has issued warning of the potential spillover from the worsening pandemic in some Emerging Markets and hidden leverage in the global system.

Our monthly update shows that these results have helped reduce risk across the US and European banking systems. At the same time risk in India, the current centre of the pandemic is rooted at the high levels seen over the past year. As the pandemic there shows no signs of improvement we will be monitoring the impact on the regional Banking system closely over the coming weeks and months

29/04/2021

China's largest holder of distressed debt downgraded to BBB. (Another sign of the tide changing in China's credit cycle - expect to see the implications on a lag effect e.g. 21Q3

https://www.ft.com/content/6a43a8fb-4f0c-43ba-8ec1-1a46de680fa2

#emergingrisks #emergingopportunities

27/04/2021

China's credit cycle continues to be an important global growth factor to watch, particularly in the context of the reflation trade. The effects of slowing credit growth exhibits lag effects and these will become more apparent in 21Q3.

#emergingrisks #quantitativeinvestment

22/04/2021

20/04/2021

15/04/2021

We've been highlighting that value has been outperforming momentum on a risk-reward basis since mid Feb. By summer we'll get to the point that value stocks will 'screen' as momentum stocks.

07/04/2021

01/04/2021

30/03/2021

29/03/2021

(https://www.ft.com/content/abcd97d3-fb65-47e5-973a-598514f1fd5a?segmentId=3f81fe28-ba5d-8a93-616e-4859191fabd8)

23/03/2021

18/03/2021

12/03/2021

The producer price index has gone from the current cycle low in April 2020 back to the previous cycle highs within 12 months. Was this caused by stimulus or simply coincidental?

Manufacturing often a leading indicator...

10/03/2021

09/03/2021

follow (https://mailchi.mp/check-risk/risk-alert-greensill-fallout)

To see our Monthly Bank Risk Update follow: (https://www.linkedin.com/feed/update/urn:li:activity:6772819960742907904/)

03/03/2021

02/03/2021

(https://www.bloomberg.com/opinion/articles/2021-03-01/warren-buffett-s-bond-lament-is-a-reflation-reality-check?sref=uN6cur8D?sref=uN6cur8D)

28/02/2021

Joined by Nick Bullman; Founder and Chairman of CheckRisk.

03/02/2021

03/02/2021

05/01/2021