What’s Trending Now? by Stephen Scott
Longboard Funds’ portfolio managers are long-term trend followers, so we make decisions solely based on a disciplined, rules-based process.
But we often get questions from you about how current events potentially relate to certain long-term trends.
Below is our team’s bi-weekly dive into the details.
Oil
- Reserves increased by 1.1 million barrels due to U.S. production increase
- Oversupply concerns due to resumption of output from fracking and oil sands
- Demand forecast for 2016 down almost 1 million barrels
Japanese Equities
- Stronger demand for yen hurting equities
- Markets pricing in 10 trllion yen stimulus package since Abe re-election
- Bank of Japan confirmed no intention to implement helicopter money
European Equities
- Growth concerns due to Brexit and high debt levels of PIIGS
- Banks under continued pressure from low interest rates
- Italian banks dragging markets lower
Cotton
- USDA reporting production cuts for 2016 and 2017
- Tight supply globally, especially China and India
- Global trade forecast for 2016-2017 raised by 1 million bales
REITs
- Low interest rates forcing investors to seek alternative sources of yield
- REITs have considerably less leverage than pre-crisis levels
- U.S. Fed less likely to raise rates this year
Utilities
- Low interest rates forcing investors to seek alternative sources of yield
- Low volatility attractive in uncertain economic environment
- Sector has stable revenue streams, is highly regulated
