Cross-Asset Strategist & Quantitative Analyst, Pennock Idea Hub

Cam Hui

Cam Hui has been professionally involved in the financial markets since 1985 in a variety of roles, both as a quantitative equity portfolio manager and as a sell-side analyst. He graduated with a degree in Computer Science from the University of British Columbia in 1980 and obtained his CFA Charter in 1989.

Cross-Asset Strategist & Quantitative Analyst

Pennock Idea Hub

We are creators of independent equity research. The Pennock Idea Hub team are veterans of the investment industry. Much of our team has spent their careers at Merrill Lynch, Deutsche Bank, RBC Capital Markets and Wood Gundy. We have taken every aspect of research back to the studs and returned to first principles. The Pennock Idea Hub marries the interests of the sell and buy side. 

We offer the best research for institutional investors by:

-Only publishing research from veteran analysts
-Eliminate the inherent conflicts of the traditional sell and buy side relationship
-Ensure our team is always accessible; collaboration with clients nurtures our collective success

Cross-Asset & Quantitative Research

Cross Asset Strategy

Last week’s stock market rally appears to be based on the hopes of a V-shaped economic recovery, powered by the combination of all-in monetary stimulus, and fiscal stimulus, as evidenced by a $2-trillion bill passed in Congress. Street consensus is now a V-shaped rebound, with a trough in Q2.What are the odds of a V-shaped recovery, or will the recovery be U, L or W shaped?As good students of Economics 101 recall, the three factors of production are capital, land (rents) and labour. The current crisis has affected each of those factors in different ways, and the combination of monetary, fiscal and public health policies also has different effects on each of the three factors.So far, monetary and fiscal policy have bought time so that the economy can stabilize. However, the economy cannot fully recover without a healthy and productive labour force, which mainly depends on public health policy, and possibly a little luck from the weather and medical research. Just as Cheesecake Factory David Overton told landlords when the company would not pay its rent on April 1, “We simply cannot predict the extent or the duration of the current crisis”, there is too much uncertainty, and the jury is still out on the trajectory of the recovery.Our base-case scenario, based on an assessment of the fundamental risks and market history, calls for a long drawn-out bottoming process of some unknown nature.

Last week’s stock market rally appears to be based on the hopes of a V-shaped economic recovery, powered by the combination of all-in monetary stimulus, and fiscal stimulus, as evidenced by a $2-trillion bill passed in Congress. Street consensus is now a V-shaped rebound, with a trough in Q2.What are the odds of a V-shaped recovery, or will the recovery be U, L or W shaped?As good students of Economics 101 recall, the three factors of production are capital, land (rents) and labour. The current crisis has affected each of those factors in different ways, and the combination of monetary, fiscal and public health policies also has different effects on each of the three factors.So far, monetary and fiscal policy have bought time so that the economy can stabilize. However, the economy cannot fully recover without a healthy and productive labour force, which mainly depends on public health policy, and possibly a little luck from the weather and medical research. Just as Cheesecake Factory David Overton told landlords when the company would not pay its rent on April 1, “We simply cannot predict the extent or the duration of the current crisis”, there is too much uncertainty, and the jury is still out on the trajectory of the recovery.Our base-case scenario, based on an assessment of the fundamental risks and market history, calls for a long drawn-out bottoming process of some unknown nature.

Handicapping the Odds of A V-Shaped Recovery