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.


Cross Asset Strategy

<ul>
<li>US 10-year Treasuries likely to test a 2½% yield base</li>
<li>Break-evens already up to speed with V-shaped economic rebound</li>
<li>Real rates likely to move up more substantially in next market phase</li>
<li>Equities benefit from higher inflation (early), but are hit when real rates jump</li>
</ul>


US 10-year Treasuries likely to test a 2½% yield base
Break-evens already up to speed with V-shaped economic rebound
Real rates likely to move up more substantially in next market phase
Equities benefit from higher inflation (early), but are hit when real rates jump


Will Rising US Yields Spoil World Equities?

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

Our bullish outlook remains intact and is supported by the absence of breakdowns across major global indexes (MSCI ACWI, ACWI ex-US, EM, and EAFE) and ongoing positive market dynamics. Until this changes, we believe global equities are headed higher in the coming weeks and months.

Our bullish outlook remains intact and is supported by the absence of breakdowns across major global indexes (MSCI ACWI, ACWI ex-US, EM, and EAFE) and ongoing positive market dynamics. Until this changes, we believe global equities are headed higher in the coming weeks and months.

Global Equity Strategy: Stick With Reflation & Reopening Theme

<ul>
<li>The past year has underscored the importance of ‘Liquidity’ for markets</li>
<li>We use AI-method to extrapolate the Global Liquidity Cycle further into the future</li>
<li>Next World cyclical low occurs in third quarter of 2022</li>
<li>Asian cycle very different and will not peak before March 2022</li>
</ul>


The past year has underscored the importance of ‘Liquidity’ for markets
We use AI-method to extrapolate the Global Liquidity Cycle further into the future
Next World cyclical low occurs in third quarter of 2022
Asian cycle very different and will not peak before March 2022


When Will This Investment Cycle End? – Insight From AI Systems

<ul>
<li>There is no bubble in stock prices</li>
<li>P/Es are an inappropriate and misleading guide to assessing aggregate stock markets</li>
<li>Aggregate stock markets depend on liquidity and behavioral factors</li>
<li>
China and Emerging Markets have the most to gain from future equity investment</li>
</ul>


There is no bubble in stock prices
P/Es are an inappropriate and misleading guide to assessing aggregate stock markets
Aggregate stock markets depend on liquidity and behavioral factors

China and Emerging Markets have the most to gain from future equity investment


<ul>
<li>
Global Liquidity hits record US$175 trillion in 2021, or near 2x World GDP</li>
<li>
Central Bank QE will test US$30 trillion, up by around 15% and led by US Fed</li>
<li>
Monetary velocity fell in 2020 (bullish), but will likely rise (bearish) in 2021</li>
<li>Major concern in 2021 is that strong economies will crowd-out asset markets</li>
</ul>



Global Liquidity hits record US$175 trillion in 2021, or near 2x World GDP

Central Bank QE will test US$30 trillion, up by around 15% and led by US Fed

Monetary velocity fell in 2020 (bullish), but will likely rise (bearish) in 2021
Major concern in 2021 is that strong economies will crowd-out asset markets


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)

Will Rising US Yields Spoil World Equities?

Strength of the post-COVID economic rebound will push nominal US Treasury yields towards 2.5%, led by an increase in real rates. Equities are more...

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Global Equity Strategy: Stick With Reflation & Reopening Theme

Our bullish outlook remains intact supported by the absence of breakdowns across major global indexes. Until this changes, we believe global...

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When Will This Investment Cycle End? – Insight From AI Systems

We use AI (artificial intelligence) methods to project the Global Liquidity Cycle forwards in time. Liquidity has proved, without question...

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Is This The Greatest Bubble of All Time?

P/Es are a misleading and wrong way to value aggregate stock markets. What works at the individual security level does not work well in aggregate....

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Global Liquidity in 2021: A Warning

2020 was the Year of Liquidity. What will 2021 bring? Global Liquidity will break new records this year, but it may not be enough for equity...

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