Icarus Complex.

September brought a major rotation in equity markets, with growth stocks suffering substantial pullbacks from peak levels and out-of-favour value stocks rallying. Generally, the more profitable growth companies were able to withstand the volatile markets, but several high-profile growth-at-any-cost stocks (See Figure 1) suffered peak-to-trough pullbacks of 35-40%. With year-to-date gains still strong, long-term investors in high growth stocks are likely barely batting an eye, but the strong IPO slate in the first half of 2019 likely brought an influx of investor interest and new money into the sector. Read

Ante Up!

Trade and tariff concerns escalated in early August as the Trump Administration raised the stakes with a new round of tariffs on Chinese goods and an escalation of existing tariffs. To date, the tariffs have had a limited effect on U.S. consumers as the U.S. has focused tariffs on products that are easily substitutable, with multiple origin destinations, and products that are isolated from the U.S. consumer. However, the new tariffs announced in early August will impact consumer-related goods such as apparel and electronics. Although the U.S. pushed back the implementation of the new tariffs after the initial announcement, it represents an escalation in the trade war between the two countries.

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