The U.S. energy sector, particularly shale oil, is highly leveraged, with an averge gearing close to 200% and net debt to Ebitda ratio of 2.8x for our independent/shale basket of quoted companies.
At first glance, the U.S. retail industry is the typical case of what the Austrian economist Joseph Schumpeter called “creative destruction”, in which new entrants capture growth or create new markets altogether at the expense of established companies.
The strong decrease in Russia’s current account surplus in 2019 has been confirmed. It declined to USD71bn (an estimated +4.2% of GDP) in 2019, down from USD114bn (+6.8% of GDP) in 2018. Merchandise exports dropped by -6% or -USD25bn to USD418bn in 2019.
We expect global growth to muddle through in the next two years. Monetary policies have to deal with a threefold series of disturbances, i.e. political risk, an external shock on trade and structural issues related to the ecological transition.
The U.S. and China officially signed a “Phase 1” trade deal on 15 January: The U.S. will halve its 15% tariff on about USD120 billion of Chinese goods and suspend planned duties that were set to take effect last December.
Tsai Ing-wen was reelected as president of Taiwan on Saturday 11 January in a landslide victory against runner-up Han Kuo-yu. Tsai’s party, the Democratic Progressive Party (DPP), also managed to keep its majority in the Legislative Yuan (albeit with a smaller margin).
At a global level, the upward trend in business insolvencies continued in 2019 (+9% y/y), mainly due to the prolonged surge in China (+20%) and, to a lesser extent, a trend reversal in Western Europe (+2%) and North America (+3%).
