Global Multi-Asset Investment Strategist, True Insights

Jeroen Blokland

Global Multi-Asset Investment Strategist

Build Well-Diversified Multi-Asset Portfolios

True Insights

Our research helps investors build well-diversified multi-asset portfolios and profit from market developments. In addition, our unique and proven Macro – Sentiment – Valuation (MSV) investment framework ensures a consistent flow of new investment opportunities. Together with our market views, these opportunities will be reflected in our live ETF-based Global Multi-Asset Portfolios.

Cross Asset Strategy

<ul>
<li>Positioning has been one of the few positives for equities in recent weeks, but a storm is brewing.</li>
<li>Systematic Macro investors have been absorbing USD 170 billion in global equities in recent weeks for just one reason, volatility.</li>
<li>Should equities drop to their October lows, our charts suggest volatility-related equity selling pressure of USD 300 billion. We remain underweight equities.</li>
</ul>


Positioning has been one of the few positives for equities in recent weeks, but a storm is brewing.
Systematic Macro investors have been absorbing USD 170 billion in global equities in recent weeks for just one reason, volatility.
Should equities drop to their October lows, our charts suggest volatility-related equity selling pressure of USD 300 billion. We remain underweight equities.


Systematic Macro Investors Represent USD 300 Billion in Selling Pressure!

<ul>
<li>US retail sales fell 1.0% in March, the fourth decline in the last five months. We expect the downturn in the housing market to cause another dip in consumer sentiment.</li>
<li>Our earnings-per-share vs. P/E ratio analysis provides little upside. It will demand higher valuations and/or positive earnings growth to allow for meaningful upside.</li>
<li>Sentiment has been the key market driver in recent weeks. But with the VIX Index down to 17 in a weakening macro environment, the impulse may be fading.</li>
</ul>


US retail sales fell 1.0% in March, the fourth decline in the last five months. We expect the downturn in the housing market to cause another dip in consumer sentiment.
Our earnings-per-share vs. P/E ratio analysis provides little upside. It will demand higher valuations and/or positive earnings growth to allow for meaningful upside.
Sentiment has been the key market driver in recent weeks. But with the VIX Index down to 17 in a weakening macro environment, the impulse may be fading.


Changes in Portfolio Weights: Lowering the Weight of Equities

<ul>
<li>We have to go back to 1980 to find a month when small US businesses thought it was an even worse time to expand.</li>
<li>Volatility is falling off a cliff as investors embrace a new kind of goldilocks. </li>
<li>A common denominator drives Bitcoin and Gold higher: their perceived value as insurance against adverse market circumstances.</li>
</ul>


We have to go back to 1980 to find a month when small US businesses thought it was an even worse time to expand.
Volatility is falling off a cliff as investors embrace a new kind of goldilocks. 
A common denominator drives Bitcoin and Gold higher: their perceived value as insurance against adverse market circumstances.


Sentiment Strengthens, While Fundamentals Fade

Macroeconomics

<ul>
<li>The 3-month annualized change of all six CPI measures in our US Inflation Monitor fell compared to February.</li>
<li>Given the levels of inflation and its poor track record, the Fed will want to put one extra hike in to be ‘better safe than sorry.’</li>
<li>The odds markets will win this battle with Powell are increasing, but only because so is the likelihood of a recession.</li>
</ul>


The 3-month annualized change of all six CPI measures in our US Inflation Monitor fell compared to February.
Given the levels of inflation and its poor track record, the Fed will want to put one extra hike in to be ‘better safe than sorry.’
The odds markets will win this battle with Powell are increasing, but only because so is the likelihood of a recession.


The Market’s Triumph over the Fed: Winning by Losing!

<ul>
<li>Cracks are appearing in the US labor market, bringing relief for the Federal Reserve concerning inflation. But higher unemployment significantly increases the odds of a US recession.</li>
<li>The increase in Federal Reserve liquidity is keeping markets afloat. But assuming the banking crisis does not worsen from here, liquidity will reverse.</li>
<li>Our Fear &amp; Frenzy Sentiment Index moved away from ‘Frenzy’ but remains in Neutral territory. Futures positioning and equity flows worsened, pushing the Fear &amp; Frenzy Sentiment Index toward ‘Fear.’</li>
</ul>


Cracks are appearing in the US labor market, bringing relief for the Federal Reserve concerning inflation. But higher unemployment significantly increases the odds of a US recession.
The increase in Federal Reserve liquidity is keeping markets afloat. But assuming the banking crisis does not worsen from here, liquidity will reverse.
Our Fear &amp; Frenzy Sentiment Index moved away from ‘Frenzy’ but remains in Neutral territory. Futures positioning and equity flows worsened, pushing the Fear &amp; Frenzy Sentiment Index toward ‘Fear.’


Weekly Market Monitor 14 - Did the Fed Finally Break the US Labor Market?

United States

The MSCI World Index is a free-float weighted equity index. It was developed with a base value of 100 as of December 31, 1969. MXWO includes developed world markets, and does not include emerging markets. MXWD includes both emerging and developed markets.

MSCI World Index (MXWO INDEX)

Systematic Macro Investors Represent USD 300 Billion in Selling Pressure!

When volatility rises, as several indicators suggest, Systematic Macro investors will be forced to dump billions of stocks onto the market.

Jeroen Blokland

Changes in Portfolio Weights: Lowering the Weight of Equities

We lower the weight of equities in our Global Multi-Asset Portfolios as the catalysts for an extension of the rally are fading.

Jeroen Blokland

Sentiment Strengthens, While Fundamentals Fade

Sentiment strengthens, while Fundamentals fade. 30+ charts to get you up to speed on all things Macro, Sentiment, and Valuation, and why you should...

Jeroen Blokland

The Market’s Triumph over the Fed: Winning by Losing!

Winning by Losing! The odds markets will win this battle with Powell are increasing, but only because so is the likelihood of a recession.

Jeroen Blokland

Weekly Market Monitor 14 - Did the Fed Finally Break the US Labor Market?

Welcome to the weekly Market Monitor, keeping you updated on the week’s most important charts and developments in financial markets.

Jeroen Blokland