In today’s briefing:
- Gap Trade Opportunities in Korean Prefs Vs Common Share Pairs in 4Q 2024
- The Challenges Of Rubber Production In 2024: Weather, Pricing Dynamics, And Regulatory Implications
- Europe: Impression, Soleil Couchant?
- Proprietary Nonfarm Payroll Prediction Model: Methodology and Sep 2024 Prediction
- Powell Suggests FOMC Not in a Hurry to Get Rates to Neutral
Gap Trade Opportunities in Korean Prefs Vs Common Share Pairs in 4Q 2024
- In this insight, we discuss numerous gap trade opportunities involving Korean preferred and common shares in 4Q 2024.
- Among the 27 major pair trades (prefs vs. common shares), 16 of the pref stocks outperformed their common shares counterparts so far this year.
- The 27 Korean preferred stocks’ average prices increased by 8.3% from end of 2023 to 2 October 2024 (excluding dividends), outperforming their common counterparts which were up on average 5.4%.
The Challenges Of Rubber Production In 2024: Weather, Pricing Dynamics, And Regulatory Implications
- Price surge to continue until 2025
- 13% higher precipitation in Thailand in Jan-Aug 2024 vs 2023
Europe: Impression, Soleil Couchant?
- Political instability in France and Germany hampers Europe’s ability to act, making a second Trump term the most visible “grey rhino” that could force significant change.
- European complacency and fatalism could be shaken by Trump’s aggressive trade policy and executive actions, pressuring Europe to respond to disrupted global alliances.
- Uncertainty surrounds Ukraine aid post-election, with Trump likely to halt it and Harris facing gridlock, potentially forcing a temporary and uneasy end to the conflict.
Proprietary Nonfarm Payroll Prediction Model: Methodology and Sep 2024 Prediction
- Klein (2022)* found that prediction quality varies across economists and rejected the hypothesis of equal predictive ability. It is worth building our proprietary model on monthly changes of nonfarm payroll.
- We follow Bhatia (2020)# and add improvement on our own to arrive at our proprietary nonfarm payroll prediction model. The growth in payrolls is surprisingly stationary.
- Public impressions fall prey to the recency bias that assumes the most recent experience is a signal of the future that is distinct from the past.
Powell Suggests FOMC Not in a Hurry to Get Rates to Neutral
- The latest speech given by Fed Chairman Powell to the NABE was not dovish, suggesting the labor market is where the Fed wants and easing is designed to keep it.
- In the Q+A he went on to see GDP revisions as having reduced downside risk, and suggested the Fed is not in a hurry to cut quickly.
- Powell saw labor market conditions as solid, having cooled from a previously overheated state, and noted that job openings still exceed the number seeking work, something rare prior to 2019.
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