Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

Factset Research Systems Inc / Event-Driven

<ul>
<li>There are 3 stocks migrating from the S&amp;P500 to the S&amp;P400 and vice versa and another 3 stocks migrating from the S&amp;P600 to the S&amp;P400 and vice versa.</li>
<li>The impact of changes in the number of index shares for quite a few index constituents and the funding trade take the one-way trade size to US$18.5bn.</li>
<li>There appear to be pre-positions on some of the stocks. While the flow is large on many stocks, there are only a few that have over 2 days of ADV.</li>
</ul>


There are 3 stocks migrating from the S&amp;P500 to the S&amp;P400 and vice versa and another 3 stocks migrating from the S&amp;P600 to the S&amp;P400 and vice versa.
The impact of changes in the number of index shares for quite a few index constituents and the funding trade take the one-way trade size to US$18.5bn.
There appear to be pre-positions on some of the stocks. While the flow is large on many stocks, there are only a few that have over 2 days of ADV.


S&P500 Index Rebalance: Migrations Across the Indices

<ul>
<li>The BHP Board has decided to proceed with the Unification due to the advantages of simplification, strategic flexibility, elimination of DLC dividend arrangement, and elimination of share price differentials. </li>
<li>Since announcement of the Unification, the <a href="https://www.smartkarma.com/entities/bhp-billiton-plc-adr" target="_blank" data-smartkarma-citation="entities:14531:1" rel="noopener">BHP Billiton Plc (ADR) (BBL US)</a> discount to <a href="https://www.smartkarma.com/entities/bhp-billiton-ltd-adr" target="_blank" data-smartkarma-citation="entities:5424:1" rel="noopener">BHP Billiton (ADR) (BHP US)</a> has narrowed from 16.6% to 1.4% and will reach parity soon.</li>
<li>There will be selling on <a href="https://www.smartkarma.com/entities/bhp-billiton-plc" target="_blank" data-smartkarma-citation="entities:21840:1" rel="noopener">BHP Billiton (BLT LN)</a> from UK Index and STOXX trackers in January, and S&amp;P/ASX trackers will buy <a href="https://www.smartkarma.com/entities/bhp-group-ltd" target="_blank" data-smartkarma-citation="entities:147:1" rel="noopener">BHP Group (BHP AU)</a>, possibly in 2 tranches. </li>
</ul>


The BHP Board has decided to proceed with the Unification due to the advantages of simplification, strategic flexibility, elimination of DLC dividend arrangement, and elimination of share price differentials. 
Since announcement of the Unification, the BHP Billiton Plc (ADR) (BBL US) discount to BHP Billiton (ADR) (BHP US) has narrowed from 16.6% to 1.4% and will reach parity soon.
There will be selling on BHP Billiton (BLT LN) from UK Index and STOXX trackers in January, and S&amp;P/ASX trackers will buy BHP Group (BHP AU), possibly in 2 tranches. 


BHP Unification: Board Approves; S&P Market Consultation in Progress

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

Macroeconomics

<ul>
<li>M2 growth consistently in the 12-13% YoY range is the key reason why all core inflation gauges scaled 30-year highs last month. Fiscal stimulus was a secondary contributor.</li>
<li>Mere tapering of asset purchases will not materially slow M2 growth, and housing will likely boost inflation further. FOMC will be obliged to tighten earlier in 2022 than markets expect. </li>
<li>Despite the US$1.2tn Infrastructure Act, the fiscal deficit in FY2022 will be only 5% of GDP, from 12.4% in FY2021, restraining the recovery. Stagflation will result by mid-2022. </li>
</ul>


M2 growth consistently in the 12-13% YoY range is the key reason why all core inflation gauges scaled 30-year highs last month. Fiscal stimulus was a secondary contributor.
Mere tapering of asset purchases will not materially slow M2 growth, and housing will likely boost inflation further. FOMC will be obliged to tighten earlier in 2022 than markets expect. 
Despite the US$1.2tn Infrastructure Act, the fiscal deficit in FY2022 will be only 5% of GDP, from 12.4% in FY2021, restraining the recovery. Stagflation will result by mid-2022. 


Inflation Caused by Monetary Surge; Risk of Stagflation in 2022 Amid Fiscal Tightening

Founder & Chief Market Strategist - SAV Markets, SAV Markets

Shyam Devani

Founder & Chief Market Strategist - SAV Markets

Provide Comprehensive Analysis & Commentary

SAV Markets

SAV Markets aims to provide comprehensive analysis & commentary on foreign exchange and asset markets. The approach is multi asset as markets are typically interlinked. Cause and effect are always at work, even if those effects take time to manifest. As nothing is permanent we strive to get ahead of the curve in an ever changing world.

Technical Analysis

<ul>
<li>Tonight's close on the S&amp;P 500 will be important and should be watched closely</li>
<li>We are in line for a weekly reversal at the highs - something that has not been seen in this whole bull trend from March 2020</li>
<li>Weekly negative divergence would suggest a prolonged consolidation or correction down towards year end</li>
</ul>


Tonight's close on the S&amp;P 500 will be important and should be watched closely
We are in line for a weekly reversal at the highs - something that has not been seen in this whole bull trend from March 2020
Weekly negative divergence would suggest a prolonged consolidation or correction down towards year end


<ul>
<li>Latest price action showing a daily reversal at the high on the S&amp;P 500 Future warns of another correction</li>
<li>The rise in US yields (2y &amp; 5Y) cannot be ignored and the wider market must get used to this new path of least resistance</li>
<li>We also have negative divergence developing on the S&amp;P 500 daily chart – it is a tired looking market</li>
</ul>


Latest price action showing a daily reversal at the high on the S&amp;P 500 Future warns of another correction
The rise in US yields (2y &amp; 5Y) cannot be ignored and the wider market must get used to this new path of least resistance
We also have negative divergence developing on the S&amp;P 500 daily chart – it is a tired looking market


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)

S&P500 Index Rebalance: Migrations Across the Indices

There are 3 migrations from the S&P400 to the S&P500 and vice versa and another 3 migrations from the S&P600 to the S&400 and vice versa. The one...

Brian Freitas

BHP Unification: Board Approves; S&P Market Consultation in Progress

The BHP Board has approved the Unification and the UK line could stop trading on 28 January. The UK line will see selling from UK Index and STOXX...

Brian Freitas

Inflation Caused by Monetary Surge; Risk of Stagflation in 2022 Amid Fiscal Tightening

Fiscal deficit to fall from 12% of GDP in FY2021 to 5% in FY2022, dragging growth down. 18 months of 12-27%YoY M2 growth will keep inflation high...

Prasenjit K. Basu

US Price Action Update

Price action since the start of the week has been concerning. The week's close will be key in identifying the risks over the coming days/weeks. We...

Shyam Devani

S&P 500: Another Bump Along the Way

Latest price action on the S&P 500 indicates a short term correction down as the market gets used to higher short end yields

Shyam Devani