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>Global Liquidity, the main driver of World asset markets, will head much lower </li>
<li>World Central Bank Liquidity slated to contract by 10-20% over next 2 years</li>
<li>Bond markets are already screaming a warning with 'death-cross' formation</li>
</ul>


Global Liquidity, the main driver of World asset markets, will head much lower 
World Central Bank Liquidity slated to contract by 10-20% over next 2 years
Bond markets are already screaming a warning with 'death-cross' formation


<ul>
<li>
 Global Liquidity, the main driver of World asset markets, is heading much lower. Bear market is here</li>
<li>
Recession coming: some economies may even already be in recession </li>
<li>
Investor exposure to stocks too high and out-of-line with deteriorating economies</li>
</ul>



 Global Liquidity, the main driver of World asset markets, is heading much lower. Bear market is here

Recession coming: some economies may even already be in recession 

Investor exposure to stocks too high and out-of-line with deteriorating economies


Global Economist, DeSaque Macro Research

Said Desaque

Global Economist

Delivering Global Macro Investment Insights

DeSaque Macro Research

DeSaque Macro Research Limited was formed by Said DeSaque in April 2012 with the view to delivering global macro investment insights aimed at providing new ideas to clients.

Said DeSaque has over 26 years of experience working as a professional economist in financial services. Prior to establishing DeSaque Macro Research, Said held positions as Senior Economist at Robert W Baird and William Blair. He began his career as a graduate at PaineWebber in 1986, where he eventually became Head of the London Economics Department.

Said takes a very keen interest in international relations, along with their implications for economic development. His research interests include the economic transformation of China and its implications for global capital markets, particularly in the United States. He is a member of Chatham House in London.

The US economy and capital markets have historically been Said’s main focus of attention. He frequently presents his views to institutional investors in diverse geographic locations. In recent years, Said has also been carefully monitoring economic developments in Asia, particularly China and Japan.

Macroeconomics

<ul>
<li>The Fed's urgency to return the federal funds rate to neutrality by year-end has recently risen. Further upside risks depend on whether inflation risks have receded sufficiently by 2023 Q1.</li>
<li>The current strength of US labour demand seems inconsistent with the imminent onset of recession.  Companies may feel comfortable about labour hoarding if they are able to raise selling prices.</li>
<li>Analysts are optimistic about higher operating margins in 2023, but equity investors are reluctant to pay richer valuations due to greater economic risks, courtesy of more hawkish Fed policy. </li>
</ul>


The Fed's urgency to return the federal funds rate to neutrality by year-end has recently risen. Further upside risks depend on whether inflation risks have receded sufficiently by 2023 Q1.
The current strength of US labour demand seems inconsistent with the imminent onset of recession.  Companies may feel comfortable about labour hoarding if they are able to raise selling prices.
Analysts are optimistic about higher operating margins in 2023, but equity investors are reluctant to pay richer valuations due to greater economic risks, courtesy of more hawkish Fed policy. 


Rush to Normalise Fed Policy Settings Raises Questions Over US Corporate Profits Outlook

Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

<ul>
<li>Nominal GDP increased 6.5%QoQsaar, but the GDP deflator was up 8%, so real GDP declined 1.4% in Q1CY22. With core PCE inflation at 5.4%, brace for 50bp hike next week.</li>
<li>With M2 growing faster in Apr'20-Mar'21 than any time in the past 150 years, the recent surge in inflation is precisely as we'd predicted.  The overheating economy needs monetary tightening. </li>
<li>Imports (+17.7% in Q1CY22) subtracted 2.5% from GDP and inventory-destocking subtracted 0.84%. These will be less negative as monetary policy tightens,  with FF rate rising to 2.75% by end-2022. </li>
</ul>


Nominal GDP increased 6.5%QoQsaar, but the GDP deflator was up 8%, so real GDP declined 1.4% in Q1CY22. With core PCE inflation at 5.4%, brace for 50bp hike next week.
With M2 growing faster in Apr'20-Mar'21 than any time in the past 150 years, the recent surge in inflation is precisely as we'd predicted.  The overheating economy needs monetary tightening. 
Imports (+17.7% in Q1CY22) subtracted 2.5% from GDP and inventory-destocking subtracted 0.84%. These will be less negative as monetary policy tightens,  with FF rate rising to 2.75% by end-2022. 


US Continues to Overheat, Reflected in a Seemingly-Weak GDP Print

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>We are getting the test of the lows we have been calling for, following some indiscriminate selling late last week which produced back-to-back 80%+ downside volume days on the NYSE.</li>
<li>There can certainly be more 80%-90%+ downside days that take the indexes to new lows.</li>
<li>We need to see back-to-back 80%+ upside volume days or one 90%+ upside day on the NYSE in order to have confidence that a major market bottom is in place</li>
</ul>


We are getting the test of the lows we have been calling for, following some indiscriminate selling late last week which produced back-to-back 80%+ downside volume days on the NYSE.
There can certainly be more 80%-90%+ downside days that take the indexes to new lows.
We need to see back-to-back 80%+ upside volume days or one 90%+ upside day on the NYSE in order to have confidence that a major market bottom is in place


Panic Selling Achieved, Now Waiting for Panic Buying; Major Indexes At/Near Support

United States

The S&P 500® is widely regarded as the best single gauge of large-cap U.S. equities and serves as the foundation for a wide range of investment products. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization.

S&P 500 INDEX (SPX INDEX)

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