About Us

My photo
CurAlea Associates LLC is an independent risk and due diligence advisory firm focused on hedge funds and family offices.

Sunday, April 5, 2020

The New Age of Covid

We’re hiding in our basements, we’re staying off the grid,
We’re scared to go outside, in the new age of covid.
To flatten out the curve, in bunkers we have hid,
Waiting for the apex, in the new age of covid.
Social distancing’s the norm, any closeness we forbid,
Six feet of separation, in the new age of covid.

The virus is among us, spreading its tentacles like a squid,
Asymptomatic carriers, in the new age of covid.
Please don’t touch your face, your ear or your eyelid,
Don’t touch your nose or mouth, in the new age of covid.
It started out just slowly, suddenly into a crisis we all slid,
It’s exponential growth, in the new age of covid.

Wuhan, Daegu, New Orleans, Milan, New York, Madrid,
Cross continental pandemic hotspots, in the new age of covid.
The old, middle aged, and young, grandparent and grandkid,
It appears no one is safe, in the new age of covid.
Sanitizer, soap, and wipes, anything to help us to get rid,
Of the deadly pathogen, in the new age of covid.

ICU counts and death rates, it all seems quite morbid,
Flying blind without good testing, in the new age of covid.
The national stockpile has run dry, divvy it all up we did,
Hoards last only a few weeks, in the new age of covid.
For PPE and ventilators, sadly many have been outbid,
Every state is on its own, in the new age of covid.

How to cope with all this horror, this sadness we’re amid?
The lonely suffering of so many, in the new age of covid.
We must stay strong alone together, into despair we musn’t skid,
Humanity will emerge triumphant, from the new age of covid.
Better treatments and immunity, on this scourge will put a lid,
And finally a vaccine, will bring us to a new age post covid.

Wednesday, April 1, 2020

March 2020 - Monthly Market Commentary

Risk assets sold off sharply across all asset classes in March, as the corona virus spread across the globe and its devastating impact on the global economy came into focus. Global equities moved sharply lower, with the energy sector, small caps, and value stocks being the hardest hit, the US yield curve moved sharply lower and steepened, the US dollar strengthened, credit spreads widened, and the oil complex collapsed due to a combination of demand destruction stemming from the economic slowdown and increased supply resulting from a breakdown in production level agreements between OPEC and Russia. The Federal Reserve took a series of emergency steps during March, including cutting rates to zero, and launching an unlimited and open-ended asset purchase program, including, for the first time, corporate bonds, a program to support the flow of credit to large and small businesses, a commercial paper funding facility, and a lending facility for foreign central banks. For the week ended March 21, the number of Americans filing for unemployment hit a record 3.3 million, rendering the February US jobs report the ultimate lagging indicator; this report showed that 273,000 jobs were added in February (the 113th consecutive month of job creation), the unemployment rate moved lower to 3.5% (a 50 year low), the labor force participation rate held at 63.4%, average hourly earnings rose 3% from a year earlier, and of the total labor force of 164.6 million, 158.8 million were employed.

Developed market equities moved sharply lower in March (see page 8), with the biggest losses in Italy (-22.4%), Spain (-22%), and Australia (-21.1%). US small caps underperformed large caps, with the Russell 2000 down 21.7%, and the Russell 1000 down 13.2% (see page 3). All 11 S&P 500 sectors were down in March with the biggest losses in Energy (-34.8%), Financials (-21.3%), and Industrials (-19.2%). Large cap growth (-9.8%) outperformed large cap value (-17.1%) in March (see page 3). Emerging market equities moved lower in March (see page 9), with the biggest losses in Argentina (-32.1%), Brazil (-28.9%), and the Philippines (-21.8%).

In currencies, the USD Index was higher (+0.9%) in March (see page 10). The Japanese Yen (+0.5%) and Swiss Franc (+0.4%) strengthened against the USD, while the Norwegian Krone (-9.6%), Australian Dollar (-5.9%), and Canadian Dollar (-4.8%) saw the biggest losses. Emerging market currencies were mostly lower against the USD, with gains in the Taiwanese Dollar (+0.1%), and the biggest losses in the Mexican Peso (-17.3%), Russian Ruble (-14.8%), and Brazilian Real (-14.1%).

The US interest rate curve moved lower and steepened in March (see page 12). 10 year rates closed the month at 0.67%, down from 1.15% at February month end. US investment grade and high yield spreads widened (see page 13).

In commodities, the GSCI index moved lower (-29.4%) in March (see page 11), with losses in Energy (-47.7%), Livestock (-12.8%), Industrial Metals (-10.2%), and Agriculture (-4.1%), and gains in Precious Metals (+0.4%). Within individual commodities, Wheat (+8.4%), Coffee (+7.4%), and Gold (+1.8%) saw the biggest gains, while Gasoline (-60.2%), Crude Oil (-54.7%), and Brent Crude (-48.4%) saw the biggest losses.

Contact CurAlea Associates for a Daily Market Review.