Noteworthy Reads / Events of the Week

  • Eurozone Growth: The Eurozone has continued it’s longest economic decline since aggregate statistics began over 14 years ago. The Eurozone experienced a decline of 0.2% in the first quarter of 2013 marked the sixth consecutive quarter of decline (up from 0.6%).
  • Is Austerity the Only Way?: Calling into question the efficacy (and social cost) of the Eurozone austerity measures, it appears that deficit reduction has been more effective in the U.S. where budget deficits are estimated at 4%, down from 10% in 2009, whereas the EU is projected at 2.9% from 6.4% over the same time frame.
  • Driving the Eurozone Downward: “It’s not That Simple” made a case that reduced EU output, relative to US, closely mirrors change in outstanding loans… i.e. the growth problem in Europe is driven by the banks.
  • Changes in Investor Sentiment: Margin Debt is regarded as one of the better indicators of positive investor sentiment, and has currently reached record levels
  • Employment Perspective: The Federal Reserve of Atlanta provided some great insight around the employment situation. Specifically, that even if we continue to see very high Non-farm payrolls of the historical 6 month average (208,000 per month), an increase of the Labor Force Participation rate to 70% (from 63.3%, current level), a 7.5% unemployment rate would persist. This is all couched in a framework of when the Fed might begin to take down some of its balance sheet, whose language as partially driven by the employment situation.
  • An Argument for a Bullish Dollar: Tom Stevenson, Investment Director at Fidelity Worldwide Investment, published an article for the Telegraph arguing that the dollar will appreciate because:
    1. Budgetary & trade deficits are narrowing
    2. Domestic energy production has continued to strengthen U.S. prospects
    3. The Fed is potentially finishing up its last round of easing while Japan & the EU continue theirs

Benjamin is a Managing Director in Newfound’s Product Development and Quantitative Strategies group, where he is responsible for the ongoing research and development of new intellectual property and strategies. Specifically, Benjamin’s focus is in the area of exploring model applications to fundamental, economic and systemic market variables. Drawing on his years of experience in the financial services industry, he helps to ensure that Newfound’s products and messaging effectively meet the needs of investors and portfolio managers. He also plays a critical role in developing new business and client relationships.