In today’s briefing:
- Portfolio Watch – 2023 in hindsight
- NEW EU FISCAL RULES – Victory for the Expansionists or the Prudentials?
Portfolio Watch – 2023 in hindsight
- Merry Christmas and a happy new year to all of you from us here at Steno Research.
- What a year it has been, and we hope you have enjoyed the portfolio, trade alerts and our weekly portfolio updates, where we as always try to give you an edge and insight in what we are doing with our money.
- For those of you who have been listening to our ‘Macro Sunday’ podcast, it’s no secret that our trades are “sometimes maybe good sometimes maybe shit”, but our equal-weighted alpha overlay portfolio has since inception in May 2023 delivered a very decent return of around 5% with very little drawdowns of at max 3-4% (compared to 8-10% for S&P 500 as an example) and with a market beta of 0.15 (based on a simple linear regression).
NEW EU FISCAL RULES – Victory for the Expansionists or the Prudentials?
- Amidst the prospect of a soft landing and lower interest rates, the European Council unanimously voted in favor of reinstating fiscal safeguards for EU member states after a 4-year pause during the pandemic.
- The Stability and Growth Pact – the formal name of the fiscal rulebook – gives the EU the ability to impose monetary fines on member states with debt-to-GDP ratios above 60% and/or budget deficits exceeding -3%.
- The pact was temporarily waived to allow states to undertake counter-cyclical investments and debt intake during the pandemic and subsequent energy crisis.
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