Macroeconomic and Investing, The Macro Compass

Alfonso Peccatiello (Alf)

Macroeconomic and Investing

The Macro Compass

Actionable investment ideas and unique global macro insights. From the desk of a former Head of $20 bn Investment Portfolio straight to your inbox.

Actionable Investment Ideas

Cross Asset Strategy

<ul><li>Markets have moved sharply year-to-date, and in one clear direction: short Cathie Wood and Bitcoin, long cyclicals (banks &amp; oil)</li><li>There are good macro reasons for the downside move in high-beta, high-multiples but much less so for the long cyclical move to continue its upside move</li><li>My credit impulse metric suggests earnings and inflation are going to disappoint consensus</li></ul>

Markets have moved sharply year-to-date, and in one clear direction: short Cathie Wood and Bitcoin, long cyclicals (banks &amp; oil)There are good macro reasons for the downside move in high-beta, high-multiples but much less so for the long cyclical move to continue its upside moveMy credit impulse metric suggests earnings and inflation are going to disappoint consensus

Founder & CEO. Oil markets macro-analysis., Vanda Insights

Vandana Hari

Founder & CEO. Oil markets macro-analysis.

Vanda Insights

Vanda Insights is a Singapore-based boutique provider of intelligence on the global energy markets, launched in September 2016. The venture was born out of a desire to extract the signal from the noise in the complex and often volatile oil markets. Our succinct and clear macro analysis is relied upon by thousands of readers globally, including those doing business directly or indirectly in the physical commodity and derivatives markets; wealth managers; governments, regulatory bodies and think-tanks; as well as trade organizations and educational institutions.

Global Energy Markets

Commodities

<ul>
<li>Demand cheer and supply fear have become the major drivers behind crude's spike to 7-year highs.</li>
<li>Escalating tensions between the US and Russia over Ukraine are a major trigger for a fear premium. But a military conflict and supply disruption is not our base case.</li>
<li>Constant OPEC+ output shortfall and a thinning cushion of OECD stocks makes the market ultra-sensitive to any actual or feared supply disruptions.</li>
</ul>


Demand cheer and supply fear have become the major drivers behind crude's spike to 7-year highs.
Escalating tensions between the US and Russia over Ukraine are a major trigger for a fear premium. But a military conflict and supply disruption is not our base case.
Constant OPEC+ output shortfall and a thinning cushion of OECD stocks makes the market ultra-sensitive to any actual or feared supply disruptions.


OIL MACROS: Snowballing Supply Worries May Keep Prices Elevated

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>Market dynamics remain largely constructive and we are now seeing meaningful improvement within emerging markets (EEM-US) as the Hang Seng index displays bullish price and relative strength (RS) reversals.</li>
<li>Brent and WTI crude oil are hitting 8-year highs, base metals are bullishly inflecting, and critical supports are holding on the broad global indexes.</li>
<li>Sticking with the theme from last week when we recommended Energy and Financials, two more Sectors that stand to benefit from rising rates include Materials and Industrials/Manufacturing -- add exposure.</li>
</ul>


Market dynamics remain largely constructive and we are now seeing meaningful improvement within emerging markets (EEM-US) as the Hang Seng index displays bullish price and relative strength (RS) reversals.
Brent and WTI crude oil are hitting 8-year highs, base metals are bullishly inflecting, and critical supports are holding on the broad global indexes.
Sticking with the theme from last week when we recommended Energy and Financials, two more Sectors that stand to benefit from rising rates include Materials and Industrials/Manufacturing -- add exposure.


Sticking With Value; Buying Materials & Industrials

Founder & Chief Market Strategist - SAV Markets, SAV Markets

Shyam Devani

Founder & Chief Market Strategist - SAV Markets

Provide Comprehensive Analysis & Commentary

SAV Markets

SAV Markets aims to provide comprehensive analysis & commentary on foreign exchange and asset markets. The approach is multi asset as markets are typically interlinked. Cause and effect are always at work, even if those effects take time to manifest. As nothing is permanent we strive to get ahead of the curve in an ever changing world.

<ul>
<li>The rise in Oil and US Yields has come at a time when the equity market is struggling to maintain recent highs</li>
<li>These dynamics are probably linked as a hawkish Fed &amp; rising yields across the curve question one of the major supports for US equity markets - cheap money</li>
<li>The chart below shows that we saw something similar a few months ago</li>
</ul>


The rise in Oil and US Yields has come at a time when the equity market is struggling to maintain recent highs
These dynamics are probably linked as a hawkish Fed &amp; rising yields across the curve question one of the major supports for US equity markets - cheap money
The chart below shows that we saw something similar a few months ago


<ul>
<li>The break in US 10 year yield has opened the way for a move to at least 2% in the near term</li>
<li>It has arrived as Oil rallied and makes new trend highs</li>
<li>Given the long-term setup on Oil, a refreshed long term chart of US 10 year yield suggests much more aggressive targets for the course of this year</li>
</ul>


The break in US 10 year yield has opened the way for a move to at least 2% in the near term
It has arrived as Oil rallied and makes new trend highs
Given the long-term setup on Oil, a refreshed long term chart of US 10 year yield suggests much more aggressive targets for the course of this year


United States

Crude oil is a naturally occurring, unrefined petroleum product composed of hydrocarbon deposits and other organic materials. Crude oil can be refined to produce usable products such as gasoline, diesel and various forms of petrochemicals. It is a nonrenewable resource, also known as a fossil fuel, which means that it can't be replaced naturally at the rate we consume it and is therefore a limited resource.

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Crude Oil (CL1 COM COMDTY)

How To Trade This Market Eruption

Markets have moved sharply year-to-date, and in one clear direction: short Cathie Wood and Bitcoin, long cyclicals (banks & oil)

Alfonso Peccatiello (Alf)

OIL MACROS: Snowballing Supply Worries May Keep Prices Elevated

Supply fears and demand cheer have driven crude prices to 7-year highs. Both influences are sticky, which means a meaningful pullback in prices...

Vandana Hari

Sticking With Value; Buying Materials & Industrials

Sticking with the theme from last week when we recommended Energy and Financials, two more Sectors that stand to benefit from rising rates include...

Vermilion Research

US Equities with Rising Yields and Oil

The rise in yields and Oil seem to be having a negative impact on equities...again. This was also seen a few months ago which is being compared to...

Shyam Devani

US Yields – Onwards and Upwards

The rise in US 10 year yield has arrived as Oil makes new trend highs. Both markets look to trend further and this note looks at both short term...

Shyam Devani

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