“To say we were striving for a one-world government is exaggerated, but not wholly unfair...we couldn’t go on forever fighting one another for nothing and killing people and rendering millions homeless. So we felt that a single community throughout the world would be a good thing."
After a tenure of some 18 years, Ted Burdick, one of the most recognizable Soros lieutenants, has decided to call it a day and quit Soros Fund Management last week.
"By attributing the trade-related news flow to the performance of the US market, we estimated the impact on US equities to be negative 4.5%... this translates into $1.25T of value destruction for US companies."
Global stocks, US equity futures and Treasury yields extended gains while the dollar slumped as "risk-on" sentiment returned after the U.S. and China exchanged trade proposals meant to avoid an escalation of economic tensions.
If in 2017 the ratio was almost an all time low, 2018's average down/up return ratio is one of the highest on record, and the largest we've seen since 2008.
While global markets remain largely a sea of green, ignoring the threat of a trade war between the US and the rest of the world the move higher has been more muted overnight as some familiar risks have re-emerged.
"Looking at the investor base, we believe that there may not be any obvious candidate to support the BTP market if a bear case fiscal expansion was to play out."
"This is precisely the way the argument went after Bear Stearns’ subprime funds became news... Why would bad mortgages hurt good old fashioned stocks like AIG or General Electric?"
"The current pace is probably as good as it gets because we expect the impulse from financial conditions to turn gradually more negative, and the further likely FCI impact of our above-market funds rate forecast."
The main focus for markets next week will instead likely be the fallout from the latest trade war developments, most notably now between the US and EU, as well further clarification around the Italian political scene.
Where previously the threat of renewed trade war between the US and the world would have been sufficient to pummel global markets, today stocks are approaching life with a "glass half full" approach, and global stocks and US futures are green across the board.
