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

Cross Asset Strategy

<ul>
<li>We recently suggested a number of long/short pair trades, with inflation hedge vehicles forming the long portion of a number of pairs.</li>
<li>Inflation hedge factors have begun to underperform, and the subsequent performance of the pairs is revealing of the factors driving the current market environment.</li>
<li>We are inclined to give the long inflation hedge pairs the benefit of the doubt. They are being sold along in a panic liquidation where all correlations converge to 1.</li>
</ul>


We recently suggested a number of long/short pair trades, with inflation hedge vehicles forming the long portion of a number of pairs.
Inflation hedge factors have begun to underperform, and the subsequent performance of the pairs is revealing of the factors driving the current market environment.
We are inclined to give the long inflation hedge pairs the benefit of the doubt. They are being sold along in a panic liquidation where all correlations converge to 1.


Pairs Monitor: Are Correlations Converging to 1?

<ul>
<li>The U.S. equity market outlook is undergoing an unusual bifurcated condition.</li>
<li>Intermediate-Term technical indicators remain bearish but survey-based sentiment indicates crowded short conditions, which is contrarian bullish. </li>
<li>As long as our pairs trading factors remain in uptrends, we are inclined to remain cautious on the equity outlook.</li>
</ul>


The U.S. equity market outlook is undergoing an unusual bifurcated condition.
Intermediate-Term technical indicators remain bearish but survey-based sentiment indicates crowded short conditions, which is contrarian bullish. 
As long as our pairs trading factors remain in uptrends, we are inclined to remain cautious on the equity outlook.


The Canaries in the Bifurcated Market Coalmine

<ul>
<li>While we are intermediate term cautious, our working hypothesis for the near-term outlook is a choppy market, but the S&amp;P 500 is unlikely to breach its 2022 lows.  </li>
<li>It is with this chaotic environment in mind that we suggest pairs trading as a more risk-controlled way of finding better returns.</li>
<li>We will update all of the pairs periodically. Feedback and expressions of interest are appreciated so we know how much resources to devote to the regular update to this strategy.</li>
</ul>


While we are intermediate term cautious, our working hypothesis for the near-term outlook is a choppy market, but the S&amp;P 500 is unlikely to breach its 2022 lows.  
It is with this chaotic environment in mind that we suggest pairs trading as a more risk-controlled way of finding better returns.
We will update all of the pairs periodically. Feedback and expressions of interest are appreciated so we know how much resources to devote to the regular update to this strategy.


Achieving Stable Alpha in a Chaotic Bear Market

<ul>
<li>Some chartists have recently become excited over the commodity outlook. Setting aside the headline-driven rise in oil prices, the long-term chart of many commodities looks bullish.</li>
<li>The latest spike in commodity prices should be interpreted as an exhaustive move as it is a supply shock that should resolve with demand destructive in the coming months.</li>
<li>To the extent that investors hold or overweight energy and mining stocks, consider rotating into long-duration Treasury bonds in anticipation of a bond market rally as the economy slows.</li>
</ul>


Some chartists have recently become excited over the commodity outlook. Setting aside the headline-driven rise in oil prices, the long-term chart of many commodities looks bullish.
The latest spike in commodity prices should be interpreted as an exhaustive move as it is a supply shock that should resolve with demand destructive in the coming months.
To the extent that investors hold or overweight energy and mining stocks, consider rotating into long-duration Treasury bonds in anticipation of a bond market rally as the economy slows.


<ul>
<li>A short-term panic bottom is probably in, but it’s difficult to predict short-term market fluctuations in the current circumstances.</li>
<li>The situation on the ground in Ukraine is highly fluid and a jittery market is highly sensitive to headline risk.</li>
<li>Investors could focus on agriculture (MOO), aerospace and defense (ITA), and cyber security (HACK) for outperformance opportunities in the current heightened geopolitical risk environment.</li>
</ul>


A short-term panic bottom is probably in, but it’s difficult to predict short-term market fluctuations in the current circumstances.
The situation on the ground in Ukraine is highly fluid and a jittery market is highly sensitive to headline risk.
Investors could focus on agriculture (MOO), aerospace and defense (ITA), and cyber security (HACK) for outperformance opportunities in the current heightened geopolitical risk environment.


We'll Never Complain About A Lack of Panic Again

United States

Market Vectors Agribusiness ETF is an exchange-traded fund incorporated in the USA. The Fund seeks investment results of the Market Vectors Global Agribusiness Index by investing primarily in large and mid cap companies. The Fund's majority of holdings are concentrated in the consumer staples, materials, and industrials industries.

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Market Vectors Agribusiness (MOO US)

Pairs Monitor: Are Correlations Converging to 1?

Give long inflation hedge pairs the benefit of the doubt. In all likelihood, they are being sold along with other equity positions in a panic...

Cam Hui

The Canaries in the Bifurcated Market Coalmine

Intermediate technical indicators remain bearish but survey-based sentiment indicates crowded short conditions. Stay cautious as long as our pairs...

Cam Hui

Achieving Stable Alpha in a Chaotic Bear Market

It is with a chaotic bearish environment in mind that we suggest pairs trading as a more risk-controlled way of finding better returns.

Cam Hui

Not Your Father's Commodity Bull

We believe the latest spike in commodity prices should be interpreted as an exhaustive move instead of the start of a new bull cycle.

Cam Hui

We'll Never Complain About A Lack of Panic Again

A short-term panic bottom is probably in, but it’s difficult to predict short-term market direction. The situation in Ukraine is highly fluid and a...

Cam Hui

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)