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

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

iShares Russell 2000 ETF / Technical Analysis

<ul>
<li>The market continues to send mixed signals - some neutral or healthy signals but some risk-off signals as well.</li>
<li>As long as the Russell 2000 index (IWM) is above $208, Russell Micro Cap index (IWC) is above $134-$135, and the S&amp;P 500 is above 4495, we cannot be bearish.</li>
<li>Treasury yields are not breaking down below 1.40%-1.45% support on the 10-year Treasury yield and 1.76% support on the 30-year Treasury yield.</li>
</ul>


The market continues to send mixed signals - some neutral or healthy signals but some risk-off signals as well.
As long as the Russell 2000 index (IWM) is above $208, Russell Micro Cap index (IWC) is above $134-$135, and the S&amp;P 500 is above 4495, we cannot be bearish.
Treasury yields are not breaking down below 1.40%-1.45% support on the 10-year Treasury yield and 1.76% support on the 30-year Treasury yield.


Continued Absence Of Breakdowns Is A Positive Sign; Many Bottoms-Up Stock Recommendations

<ul>
<li>Market dynamics continue to deteriorate and there are plenty of reasons to be concerned, which we outline below.</li>
<li>With that said, the bottom line is that the Russell 2000 index (IWM) is above $208 support and the Russell Micro Caps index (IWC) is above $135 support.</li>
<li>As long as these supports hold we expect more consolidation and mixed markets ahead, but we would turn bearish on breakdowns.</li>
</ul>


Market dynamics continue to deteriorate and there are plenty of reasons to be concerned, which we outline below.
With that said, the bottom line is that the Russell 2000 index (IWM) is above $208 support and the Russell Micro Caps index (IWC) is above $135 support.
As long as these supports hold we expect more consolidation and mixed markets ahead, but we would turn bearish on breakdowns.


Supports Holding Despite Concerning Developments; Semis & Home Improvement Retailers Attractive

Cross-Asset Liquidity Strategist, CrossBorder Capital

Michael J. Howell

Cross-Asset Liquidity Strategist

Implementing Research Using Alt Data & AI

CrossBorder Capital

CrossBorder Capital is a London-based independent investment advisory firm. Founded in 1996, it exploits a gap in the investment arena by focusing on Central bank liquidity. 

It specialises in the monitoring and analysis of global liquidity flows - an important determinant of asset prices, from currencies through to bonds, equities and real estate.

CrossBorder Capital implements its investment strategy and currently manages over US$ 350m.


<ul>
<li>Re-configured US Fed is becoming more hawkish towards inflation</li>
<li>Bond market term structure warns of near-term economic troubles
</li>
<li>Expect a ‘catch up’ with faster QE taper by US Fed</li>
<li>Inflation is transitory but ‘sticky’. Disinflationary forces will ultimately reassert themselves</li>
</ul>


Re-configured US Fed is becoming more hawkish towards inflation
Bond market term structure warns of near-term economic troubles

Expect a ‘catch up’ with faster QE taper by US Fed
Inflation is transitory but ‘sticky’. Disinflationary forces will ultimately reassert themselves


Watch-Out For The Fed’s Big ‘Catch-Up’

Cross-Asset Strategist & Quantitative Analyst, Pennock Idea Hub

Cam Hui

Cross-Asset Strategist & Quantitative Analyst

Pennock Idea Hub

We are creators of independent equity research. The Pennock Idea Hub team are veterans of the investment industry. Much of our team has spent their careers at Merrill Lynch, Deutsche Bank, RBC Capital Markets and Wood Gundy. We have taken every aspect of research back to the studs and returned to first principles. The Pennock Idea Hub marries the interests of the sell and buy side. 

We offer the best research for institutional investors by:

-Only publishing research from veteran analysts
-Eliminate the inherent conflicts of the traditional sell and buy side relationship
-Ensure our team is always accessible; collaboration with clients nurtures our collective success

Cross-Asset & Quantitative Research

Here are our main takeaways from the analysis of daily asset rotation using a 60/40 U.S. stock/bond mix as a benchmark for USD investors.•     The S&amp;P 500 is in the leading quadrant and shows no signs of weakness. The market is on track for a rally into year-end. The open question is whether value or growth stocks will lead the charge.•     Bond prices are in the lagging quadrant but showing signs of improvement. In particular, long Treasuries (TLT) is on the verge of rising into the improving quadrant. Much depends on the language from the FOMC meeting in the coming week.In the wake of a hawkish surprise from the Bank of Canada last week, the market began to price in an aggressive tightening cycle by global central banks as yield curves around the world flattened. Will the Fed also turn hawkish in reaction to market expectations and rising inflation pressures to pull the tightening schedule forward, or will it stay the course, which would be a dovish outcome?The Fed’s tone will also matter to equity market leadership. The value/growth relationship has been correlated to bond yields. A dovish Fed would be value bullish and a hawkish tone would be growth bullish.

Here are our main takeaways from the analysis of daily asset rotation using a 60/40 U.S. stock/bond mix as a benchmark for USD investors.•     The S&amp;P 500 is in the leading quadrant and shows no signs of weakness. The market is on track for a rally into year-end. The open question is whether value or growth stocks will lead the charge.•     Bond prices are in the lagging quadrant but showing signs of improvement. In particular, long Treasuries (TLT) is on the verge of rising into the improving quadrant. Much depends on the language from the FOMC meeting in the coming week.In the wake of a hawkish surprise from the Bank of Canada last week, the market began to price in an aggressive tightening cycle by global central banks as yield curves around the world flattened. Will the Fed also turn hawkish in reaction to market expectations and rising inflation pressures to pull the tightening schedule forward, or will it stay the course, which would be a dovish outcome?The Fed’s tone will also matter to equity market leadership. The value/growth relationship has been correlated to bond yields. A dovish Fed would be value bullish and a hawkish tone would be growth bullish.

United States

iShares 20+ Year Treasury Bond ETF is an exchange-traded fund incorporated in the USA.  The ETF seeks to track the investment results of an index composed of U.S. Treasury bonds with remaining maturities greater than twenty years. 

iShares 20+ Year Treasury Bond ETF (TLT US)

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iShares 20+ Year Treasury Bond ETF (TLT US)

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)

Continued Absence Of Breakdowns Is A Positive Sign; Many Bottoms-Up Stock Recommendations

As long as the Russell 2000 index (IWM) is above $208, the Russell Micro Caps index (IWC) is above $134-$135, and the S&P 500 is above 4495, we...

Vermilion Research

Supports Holding Despite Concerning Developments; Semis & Home Improvement Retailers Attractive

Market dynamics continue to deteriorate and there are plenty of reasons to be concerned. However, the bottom line is that Russell 2000 (IWM) is...

Vermilion Research

Watch-Out For The Fed’s Big ‘Catch-Up’

Inflation is a near-term political threat in the US and will trigger a more hawkish response from the US Fed. This will unsettle stock markets, but...

Michael J. Howell

Waiting for the FOMC

In the wake of a hawkish surprise from the BoC, the market began to price in an aggressive tightening cycle by global central banks as yield curves...

Cam Hui

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)