David Woo is the CEO of David Woo Unbound, a global forum devoted to the promotion of fact-based debates about markets, politics, and economics. Woo was previously the Head of Global Interest Rates, Foreign Exchange, Emerging Market Fixed Income & Economics Research at Bank of America, where he researched the world financial markets. Woo is known for his contrarian calls on the 2016 United States elections,[2] the 2015 devaluation of the renminbi,[3] Bitcoin,[4][5] and the future of the Euro.[6] He was voted as one of the twelve smartest people on Wall Street in 2013 by Business Insider.[7]
David Woo | |
|---|---|
| Alma mater | Columbia University Tufts University |
| Occupation | CEO of David Woo Unbound [1] |
| Years active | July 2021 – Present |
The 2016 US election
editIn September 2016, Woo said "markets were failing to adequately price in the probability of a Trump win"[2] and predicted that "if Trump won, it would bring about a stronger dollar and higher rates thanks to fiscal stimulus".[8]
The 2015 renminbi devaluation
editIn April 2015, Woo argued that the renminbi was set to fall because "China cannot allow for looser capital flows while maintaining its monetary policy targets, which include limiting the yuan's moves against the US dollar.[3] In June 2015, Woo called the Chinese equity rally the "world’s largest bubble since dot-com boom of the late 1990s"[9] and predicted that Chinese shares "may drop as much as 30%", and creating a "knock-on effect on the whole world economy."[10] After the August 2015 renminbi devaluation, Woo predicted the renminbi could decline further by as much as 10% against the dollar in 2016.[11] Woo also argued that this would have global repercussions, including a "shallower Fed cycle."[12][13]
Bitcoin
editIn December 2013, Woo argued that Bitcoin "can become a major means of payment for e-commerce and may emerge as a serious competitor to traditional money transfer providers", an opinion that Joe Weisenthal said "represents a top-fligh kappat mind at a major financial institution assessing it in a serious way, and coming to the conclusion that it could be the real deal."[4][5] However, Woo put the upper bound of Bitcoin’s fair value at $1300,[14] stating that "Bitcoin is highly volatile, the result of speculation activities, and that's hindering its general acceptance as a form of payment."[14]
The 2012 European debt crisis
editIn July 2012, in a cost-benefit analysis of whether individual members of the Eurozone should stay with the euro, David Woo and Athanasios Vamvakidis argued that “Italy and Ireland emerge as the countries with the greatest incentive to exit.” They concluded that a much weaker euro was necessary to reduce the incentive of any country to exit.[6]
US energy independence and the dollar
editIn March 2013, Woo argued that "rising U.S. crude oil and natural gas production will likely lift the American greenback against major currencies" by shrinking the US current account deficit, boosting investment and reducing the correlation between the dollar and oil prices.[15]
References
edit- ^ "The dangerous groupthink stalking Wall Street". 10 September 2021.
- ^ a b Gurdus, Elizabeth (8 December 2016). "Merrill Lynch analyst got a standing ovation from 300 of his co-workers the morning after the election for nailing what would happen". CNBC. Retrieved 8 December 2016.
Woo said markets were failing to accurately price in the probability of a Trump win, almost treating the election as a "nonevent." He said then that if Trump won, it would bring about a stronger dollar thanks to fiscal stimulus.
- ^ a b Adinolfi, Joseph (27 April 2015). "Why one of Wall Street's top analysts is betting against the yuan - MarketWatch". MarketWatch. Retrieved 14 October 2015.
In a note to clients, David Woo, head of global rates and currencies research at Bank of America Merrill, said China cannot allow for looser capital flows while maintaining its monetary-policy targets, which include limiting the yuan's moves against the U.S. dollar.
- ^ a b Weisenthal, Joe (5 December 2013). "David Woo On Bitcoin". Business Insider. Retrieved 14 October 2015.
- ^ a b Alden, William (5 December 2013). "For Bitcoin, a Setback in China and an Endorsement on Wall Street". The New York Times. Retrieved 14 October 2015.
- ^ a b Nixon, Simon (12 July 2012). "Italy and Germany's Endgame for the Euro". The Wall Street Journal. Retrieved 14 October 2015.
The risk of a euro-zone breakup may actually be rising rather than falling, according to Bank of America Merrill Lynch strategists David Woo and Athanasios Vamvakidis. Using game theory to consider how the situation might evolve, they believe the crisis will boil down to a game of bluff between Italy and Germany in which neither country has an incentive to back down.
- ^ "The 12 Smartest People On Wall Street". Business Insider. 1 June 2013. Retrieved 14 October 2015.
As head of global rates and currencies research at BAML, David Woo has to keep track of a lot of different things at once – and for those interested in global macro, Woo's perspective is a must-read. Recently, he flagged developments across major world markets as inconsistent, warning of a global slowdown and a major market re-alignment. Woo remains cautious on the outlook for the U.S. economy in the short term, along with its implication for risk assets. However, he says that if the economy begins to improve along the lines of what stocks are already pricing in, then the euro could be the biggest beneficiary.
- ^ Kawa, Luke (12 September 2016). "'Strategist: If Trump Wins, 'The U.S. Economy Would Take Off in a Big Way'". Bloomberg. Retrieved 12 September 2016.
David Woo says investors are still underestimating the real estate mogul's chances of ascending to the highest office in the land, and what a seismic change this could be for markets and the world's largest economy.
- ^ Swanson, Ana (24 June 2015). "Meet the world's biggest stock market bubble since the dot-com boom". The Washington Post. Retrieved 14 October 2015.
No other stock market has ever grown this much in dollar terms over a 12-month period. David Woo, the head of Global Rates and Currencies Research at Bank of America, has called it the world's largest stock market bubble since the dot-com boom of the 1990s.
- ^ Hu, Fox; Keene, Tom (18 June 2015). "Why BofA's Global Bond Guru Is Fixated on Chinese Equities". Bloomberg.com. Bloomberg L.P. Retrieved 14 October 2015.
Woo said China's rally has become so big -- he called it the world's largest bubble since dot-com boom of the late 1990s -- that the eventual collapse will have consequences for markets around the world. Chinese shares may drop as much as 30 percent when the mania ends, weighing on consumers who have been an important driver of growth in Asia's largest economy, Woo said. He expects the selloff will be bullish for the dollar and U.S. Treasuries. It will have a "knock on effect on the whole world economy," Woo said. "The only thing that's holding up the Chinese economy are the Chinese consumers right now. The Chinese consumers are all involved in the Chinese stock market."
- ^ Nguyen, Lananh (4 December 2016). "Boring Wall Street Analyst Notes Are Out. Bold, Funny Are In". Bloomberg. Retrieved 4 December 2016.
In "The Great Divorce," published in November 2015, Woo outlined the biggest call of his career, arguing that China's currency could tumble as much as 10 percent against the dollar in 2016. The estimate was the fourth-most pessimistic of more than 40 forecasts. The onshore yuan has fallen more than 7 percent since, reaching an eight-year low last month and leaving rival strategists racing to catch up.
- ^ Kawa, Luke (23 November 2015). "Bank of America: The 'Great Divorce' Between the World's Two Largest Economies Will Drive Currency and Rates Markets in 2016". Bloomberg. Retrieved 23 November 2015.
The strategist believes that the Federal Reserve's terminal rate—the ceiling for how high its policy rate will go—will be dragged down by the decline in China's currency..
- ^ Kawa, Luke (6 October 2015). "Bank of America's Woo: "China Is Still More Important Than The Fed" - Yahoo Finance". Yahoo! Finance. Retrieved 14 October 2015.
- ^ a b Lopez, Ricardo (6 December 2013). "Bitcoin has clear 'potential for growth,' currency analyst says". Los Angeles Times. Retrieved 14 October 2015.
- ^ Hussain, Yadhullah (11 March 2013). "Energy boom bullish for U.S. dollar: BAML analyst". Financial Post. Retrieved 14 October 2015.