Pavilion in the News

S&P 500 Profit Generators Under Threat From Peak Inflation
Bloomberg, June 20, 2017

“The rolling over of inflation expectations and commodity prices presents unique risks for sectors that were large contributors to better earnings expectations,” said Alex Bellefleur, head of global macro research and strategy at Pavilion Global Markets Ltd. in Montreal. “The risk is that markets begin to reassess the forward earnings picture and turn a little less optimistic.”


Do tax cuts automatically lead to economic growth?
MarketPlace, June 6, 2017

But what if investors and companies don’t want to invest in more machines and factories? Aidan Garrib, a macro strategist with Pavilion Global Markets in Montreal, said that in the past, corporate tax cuts have been used to benefit shareholders. “To pay dividends and issue share buybacks,” Garrib said.


Tech Bubble Talk Is a Dot-Com Flashback
Bloomberg, June 1, 2017

And while investors aren’t paying stratospheric prices as they did in the late ’90s dot-com bubble, enterprise values of a broad collection of tech companies relative to their profits are higher than they have been since early 2004, Pavilion Global Markets calculated last week.


Short Sellers Resist Covering as S&P 500 Retakes Record in Week
Bloomberg, May 26, 2017

“The market appears relatively cautious by historical standards,” Pavilion Global Markets Ltd. strategists led by Alex Bellefleur wrote in a note. “The bullish view is that some of these shorts will have to be covered at some point, lengthening the rally.”


Five things you should know before you start your work day on May 19
The Financial Post, May 19, 2017

A slump in oil prices has hurt demand for property in Alberta, the country’s big cities are seeing rents fall far behind price gains, which dents revenue, and online shopping has shrunk traffic at malls. Finally, in times of broad market stress, REITS behave more like stocks rather than safer bonds, according to Pavilion Global Markets Ltd.


In a fight between large and small managers, who wins ?
Advisor.ca, May 18, 2017

“The belief that small managers outperform is […] an alternative fact,” says Alex Da Costa, the first debater, to audience laughter. He’s managing director of hedge funds at Pavilion Alternatives Group. “Globally, managers running over $1 billion control 90% of industry assets,” he says. “Investors have voted with their dollars.”


Greek, Portuguese Bonds Lead Resurgence of Europe’s Periphery
Washington Post, May 18, 2017

The balance of risks points to further upside for Greek debt in the next few months, with gradual economic improvements and the potential for inclusion of its bonds in the ECB program, according to Pavilion Global Markets Ltd.


Equities in a rising rate environment
Pension & Investment, May 9, 2017

As markets prepare for likely interest rate hikes from the Federal Reserve, concern has grown regarding the possible implications for equity valuations. While no one can say with certainty what will happen, a combination of history and theory provides some guidance.


S&P 500 Limps to Record While ETF Investors Turn Sour on Stocks
Bloomberg, May 5, 2017

“People have shifted so quickly into bonds, and they’re probably doing it by selling equities,” Alex Bellefleur, head of global macro research and strategy at Pavilion Global Markets in Montreal, said by phone. “Maybe people are looking at protection, given stocks are at all-time highs.”


Cracks are emerging’ in one of the riskiest parts of the market
Business Insider, May 5, 2017

These rising yields are widening the gap between high yield and comparable bonds. “Cracks are emerging in the high yield credit space that have the potential to blow out spreads in similar fashion to what occurred in 2014,” Pavilion Global Markets said in a note on Friday.


Will Home Capital Dent Canada’s ‘Boring-but-Stable’ Reputation?
Bloomberg News, May 2, 2017

“Canada’s reputation as a boring-but-stable financial system took a bit of a hit this week,” Alex Bellefleur, head of global macro research and strategy at Pavilion Global Markets Ltd. in Montreal, wrote in a note Friday. He predicts lending will slow across the industry, hurting cash flow into housing, and weakening inflation and the Canadian dollar.


S&P 500 Profit Generators Under Threat From Peak Inflation
Bloomberg, April 21, 2017

“The rolling over of inflation expectations and commodity prices presents unique risks for sectors that were large contributors to better earnings expectations,” said Alex Bellefleur, head of global macro research and strategy at Pavilion Global Markets Ltd. in Montreal. “The risk is that markets begin to reassess the forward earnings picture and turn a little less optimistic.”


Could Gulf States Be Forced To Devalue Their Currencies Against The Dollar?
Forbes, March 24, 2017

Fears of a devaluation first emerged in early 2016. Although the authorities in Riyadh and elsewhere have done their best to quash such speculation, the idea is again being discussed among some analysts, with Pavilion Global Markets suggesting that the Saudi authorities “will be forced to either increase interest rates or devalue the currency”.


Will Saudis Devalue Currency With Oil At $50?
Barron’s, March 23, 2017

OPEC countries depend on oil revenue, but they have been forced to cut production to keep prices near $50 per barrel, and the chief among them — Saudi Arabia — could be the oil markets’ biggest loser, Pavilion Global Markets writes today.


The positives and negatives to larger private equity fund sizes
The Alternative Assets Network, February 27, 2017

GPs raising increasingly large funds can be a double-edged sword for potential LP backers.


Gold Hedge vs Dollar: Chart Of The Day
Barron’s, February 24, 2017

The Montreal-based analysts at independent research house Pavilion Global Markets think that gold isn’t getting enough attention in the post-election rally even as members of the new administration talk down the strength of the dollar.


What Happens When Two Bankers and an Engineer Get a Billion Dollars? How Global Infrastructure Partners turned a sleepy sector into one that has investors clamoring for more.
Bloomberg Markets, February 16, 2017

“These assets are big and complicated and require ­expertise that some managers don’t have. The complexity is often underestimated,” says Jay Yoder, a managing director who oversees real asset investments at Pavilion Alternatives Group, an adviser to institutional investors. “That’s what has helped firms like GIP raise money and generate good returns.”


Indonesia & Commodities: The ‘Resilient’ Emerging Market
Barron’s, February 10, 2017

With Indonesian real rates (about 2%) not as high as those of other EMs, we think that Indonesian bonds remain relatively unattractive. We would rather look into equities rather than bonds to benefit from the country’s still-strong domestic fundamentals and rebounding PMIs…”


Junk May Slam Into $1 Trillion Wall as Maturities Hit Record
The Washington Post, February 8, 2017

Tighter monetary policy, higher volatility, elevated valuations and unfavorable changes to U.S. tax law could all contribute to pressure on spreads and underperformance in the sector, according to a separate report from Pavilion Global Markets, the Montreal-based trading and research firm.


The hedge funds where computers call the shots
Financial News, January 31, 2017

The situation seems to be improving, slowly. Alex Da Costa, director of hedge fund research and consulting at Pavilion Advisory Group, said: “Years ago, AI or ‘neural networks’ as they were sometimes called carried quite a bit of stigma among managers and investors.


How to invest if you think Donald Trump will be good for the U.S. economy
Canadian Business, January 18, 2017

While Aidan Garrib, global macro strategist for Pavilion Global Markets in Montreal, likewise doubts the Trump administration’s ability to effect his plans in the time frame that investors’ widely expect, one area he thinks will get some traction is financial industry deregulation.


Was Emerging Markets’ Trump Selloff Overdone?
Barron’s, January 17, 2017

Trump’s election briefly curtailed markets’ interest in EM assets late last year. As markets get a clearer picture of the outlook for the U.S. economy, we see them rotating back into EM assets … we think there is an interesting entry point into EM U.S.-dollar bonds and into more cyclical EM equity sectors …

 

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