CIVVL SERVANT

The thrills of modern technology.  A new tech start-up will soon offer job-seekers entry into the exciting field of evicting delinquent homeowners and renters laid low by 2020, Vice’s Motherboard reported yesterday.  Upstart app Civvl recently launched a national advertising campaign soliciting job seekers to “be hired as an eviction crew.”  

The Civvl website explains further: “Literally thousands of process servers are needed in the coming months due courts being backed up in judgements that needs to be served to defendants." That’s despite the Center for Disease Control ordering a moratorium on evictions through year-end thanks to the coronavirus. 

Vice notes that Civvl is a subsidiary of gig-economy mainstay OnQall, developer of manual labor apps such as LawnFixr and CleanQwik. Of course, recent experience has demonstrated the differences between so-called gig workers and employees. Vice relays the following:

Civvl did not respond to a question about how the company ensures evictions are legal, though based on the Terms of Service, it appears to pass all risk onto the companies using its platform, stating that it simply "provides lead generation to independent contractors," and does not actually carry out the work itself.  

Momentum investing writ large in Norway. In its annual white paper published yesterday, the Government Pension Fund Global (GPFG) disclosed plans to upsize its allocation to U.S. equity markets. The fund, which manages some NOK 10.49 trillion ($1.15 trillion), would shift about $51 billion (or 6.5% of its assets) to U.S. and Canadian stocks from European ones, bringing the total North American allocation to 48%.  That follows the March decision to upsize its global equity portfolio allocation to 70% from a prior bogey of 65%. 

As Bloomberg noted yesterday, the GPFG traditionally weighted its holdings more towards Europe, which was a function of Norwegian trade patterns.  Other considerations are now front-and-center. "The changes we are proposing will ensure the investments better represent the distribution of value creation in listed companies globally," commented finance minister Jan Tore Sanner in a news release. 

There is no doubt that U.S. equities have been the place to be over the last quarter century.  The MSCI USA index commands a $29.2 trillion market value, dwarfing the MSCI World ex USA gauge’s $15.1 trillion aggregate market cap.  The United States now represents a cool 65.5% of global market cap among so-called developed countries, up from 59% in spring 2018, 49% in spring 2010 and 37% in spring 1995. 

How much room for further concentration remains?  Noting that Japanese equities reached 41% of global market cap at the end of 1988 compared to 30% in the U.S. (despite accounting for only 16% of world output at the time compared to 28% stateside), the Feb. 7 edition of Grant’s detailed the sentiment of that late-80s financial epoch: 

In reply to Gallup’s wintertime 1989 survey question about which country was “the world’s leading economic power,” 58% of respondents (they were American) picked Japan, nearly twice as many as chose the United States, and a majority projected that Japan would continue to dominate in 2000. 

Yet, between 1989 and 2000, the Nikkei 225 fell a cumulative 53.3%, including reinvested dividends, versus a positive 383% return for the S&P 500 (both measured in dollars). That decline came despite a 26% rally in the yen. Over the same span, U.S. GDP as a percentage of the world’s total rose to 30% from 28% while Japan’s slipped to 14% from 15%.

For some specific ways to capitalize on such a future shift, see that Feb. 7 edition of Grant’s.  

The bulls got the upper hand today, as stocks rebounded to the tune of 1% on the S&P 500 to erase yesterday’s losses and leave the broad index higher by about 3% year-to-date.  Treasurys held steady (as is their wont these days), while gold edged lower to $1,910 an ounce and WTI held just below $40 a barrel. The VIX finished at 26.8, remaining near the midpoint of its three-month range.

– Philip Grant