NEWSLETTER of November 10, 2023

The following content has been added at finexpert:

McKinsey & Company
THE GREAT BANKING TRANSITION
Banks worldwide continue to benefit from rising interest rates. In 2023, the banking sector's average return on equity is expected to be 13% - a further increase compared to 12% in the previous year and significantly higher than the long-term average of 9% since 2010. Due in particular to higher interest margins, the sector's global profit is expected to amount to USD 1.4 trillion in 2023, which represents a doubling since 2017. The institutions generated record earnings totaling USD 6.8 trillion in 2022. >more

Arthur D Little | Invest Europe
THE INSIGHT: STATE OF THE EUROPEAN PRIVATE EQUITY INDUSTRY
Arthur D. Little (ADL) and Invest Europe’s European PE survey, combined with Invest Europe’s first half activity data, takes a clear look at the evolution of fundraising, investment, and divestment in the first six months of the year and gathers fund manager and investor views on the short- and medium-term outlook for activity. The survey also investigates the challenges and opportunities that have the potential to shape Europe’s PE and VC industry further into the future. >more

Lazard
GLOBAL OUTLOOK 2024
Disinflation is underway and developed market central banks have likely finished their rate hike cycles. The United States is entering 2024 in a good position. The question is when — and how quickly — will inflation fall low enough for the Fed to begin policy easing? China sentiment is improving, despite the ongoing issues with housing and consumer confidence. In the second half of 2023 alone, the authorities launched dozens of measures to prop up the economy. >more

Goldman Sachs
MACRO OUTLOOK 2024: THE HARD PART IS OVER
Goldman Sachs Research expects several tailwinds to global growth in 2024, including strong real household income growth, a smaller drag from monetary and fiscal tightening, a recovery in manufacturing activity, and an increased willingness of central banks to deliver insurance cuts if growth slows. >more

INFLATION EXPECTATION AND CRYPTOCURRENCY INVESTMENT
Lin William Cong, Pulak Ghosh, Jiasun Li, and Qihong Ruan
2023
Using proprietary data from a dominant crypto exchange in India and the country’s Household Inflation Expectations Survey, we document a large positive correlation between inflation expectations and individual cryptocurrency purchases. The effect is concentrated in Bitcoin (BTC) and Tether (USDT) and among households in states with higher GDP per capita. There are no significant differences across gender or age groups. The effect also has causal interpretations, as confirmed by using idiosyncratic shocks in current perceived inflation as an instrumental variable for long-term inflation expectations. Our findings suggest that certain cryptocurrencies have already been perceived by households as inflation hedges. >more

SOLVING SERIAL ACQUIRER PUZZLES
Antonio J. Macias, P. Raghavendra Rau, and Aris Stouraitis
2023
Using a novel typology of serial acquirers, we examine several puzzles documented in prior literature. We show that acquisitions by different types of acquirers are driven by different factors, they acquire different sizes of targets, and subsequent acquisitions by acquirers are predictable ex ante. Controlling for market anticipation, the most frequent serial acquirers do not earn declining returns as they continue acquiring, while less frequent acquirers do. Our methodology enhances our understanding of serial acquisition dynamics, anticipation, and economic value adjustments. The methodology is likely to be relevant to topics related to event anticipation beyond those covered in this study. >more