Forbes: Central Banks Set For Gold Rush Over Financial Crisis Fears

By SIMON CONSTABLE

Central bankers look set to go on a gold buying binge this year in the wake of the Covid-19 pandemic, new research shows.

And the leading reason for the likely desire to buy bars of bullion is fear of another financial crisis, according to a recent report from industry group World Gold Council. Read more here.

Photo by Roger Attington on Unsplash

Reason: Negative Interest Rates Will Damage an Already Crippled Economy

By SIMON CONSTABLE

The Federal Reserve Bank of St. Louis just published a paper suggesting the Federal Reserve should use negative interest rates to buoy the economy in the wake of the COVID-19 lockdowns. But negative interest rates have never worked before, and it's foolish to expect them to work now. Read more here.

WSJ: Small ‘Value’ Stocks Are Down but Not Out

By SIMON CONSTABLE

Small-capitalization “value” stocks have been among the market’s worst performers this year. But the sector might be well positioned to outperform the broad market when the economy begins to recover from Covid-19 lockdowns, some analysts say.

In the first quarter of this year, the Fama French U.S. Small Value Index, which tracks the small-cap value sector, recorded the worst quarterly performance in its 94-year history. It dropped 41.5% in the three months through March 31, compared with a 19.6% decline for the S&P 500 over the same period, according to data from asset-management firm Verdad Advisers in Boston. Like large-cap stocks, small-caps have regained ground in the weeks since then, but small-cap value stocks are still among the market’s biggest losers for the year to date. Read more here.

WSJ: Wall Street Has No Consensus

By SIMON CONSTABLE

Judging by their collective forecasts, Wall Street professionals seem confused over where the market and the economy are headed. The estimates of third-quarter economic growth and year-end stock-index levels vary widely compared with just a few weeks ago.

“The reason the dispersion of the estimates is so wide is that no one has a clue what the second half of the year will look like—not Fed governors, not CEOs and certainly not Wall Street analysts,” says Adam Johnson, author of the Bullseye Brief financial newsletter. Read more here.

WSJ: What Is the Dollar’s ‘Smile’?

By SIMON CONSTABLE

Investors sometimes talk about the “smile” of the U.S. dollar. What does it mean?

The dollar smile is a theory that says the U.S. currency tends to increase in value against other currencies when the U.S. economy is extremely weak or very strong. It goes up at either end of the spectrum, just like the smile on your face. Read more here.

Photo by Jacqueline Munguía on Unsplash

Korn Ferry: Can’t Get to Work? Try Electric Bikes

By SIMON CONSTABLE

It was a nice but niche addition to a centuries-old mode of transport. Now, experts are wondering if electric bicycles will play a dramatic role as offices in urban or large suburban settings struggle to find a way to return to some semblance of normal.

The vehicles, which are just like pedal bikes but with electric motors, would allow workers to avoid traveling in overpacked public transport where there is a high risk of spreading the coronavirus. The added electrical power would also make such bikes usable by a greater portion of the population. And they can take people longer distances, according to a recent study by the UK-based Centre for Research into Energy Demand Solutions. “I know for middle distances—of around eight miles—it works,” says Christina Harrington, Korn Ferry’s head of advisory for Sweden. “That’s not walking distance for most people.” Read more here.

John Batchelor Show: Scotland permits sunbathing and unrestricted strolling but no pubs yet

By SIMON CONSTABLE