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

Aggregate demand is exceeding supply in the US economy, partly due to employment growth lagging behind the recovery in real output. Based on current trends, private sector payrolls will not return to their prior peaks for another 12-months, while there are debates as to whether recent gains are sustainable into 2022. 
Labour supply constraints on output could persist over the summer, but the Federal Open Market Committee (FOMC) is probably discounting an easing of headwinds in September when schools re-open and enhanced unemployment insurance payments expire. Meanwhile, the long-term unemployed form a very large component of the total and the FOMC could face a pressure to resist tapering actions if this backdrop fails to improve quickly. 
Despite the slow recovery of the labour market, consumer spending remain well-underpinned and far less dependent on equity withdrawal compared to the last period of strong house price appreciation. Companies will be keen to bridge the gap between supply and demand by making up for last year's lost capital spending plans, but there are concerns about excess new capacity being brought on stream when the economy is destined to slow.
<div>Long-term US Treasury yields have been declining since March due to investors demanding lower real returns, thereby implying concerns about the economic outlook if the FOMC decides to taper asset purchases. In the aftermath of the taper tantrum, bond investors eventually forced the FOMC to lower their estimate of the neutral policy rate. Valuations for perfectly-priced US equities are vulnerable if the economic slowdown anticipated by US Treasury investors is sufficiently large to negatively impact corporate profit expectations.</div>

Aggregate demand is exceeding supply in the US economy, partly due to employment growth lagging behind the recovery in real output. Based on current trends, private sector payrolls will not return to their prior peaks for another 12-months, while there are debates as to whether recent gains are sustainable into 2022. 
Labour supply constraints on output could persist over the summer, but the Federal Open Market Committee (FOMC) is probably discounting an easing of headwinds in September when schools re-open and enhanced unemployment insurance payments expire. Meanwhile, the long-term unemployed form a very large component of the total and the FOMC could face a pressure to resist tapering actions if this backdrop fails to improve quickly. 
Despite the slow recovery of the labour market, consumer spending remain well-underpinned and far less dependent on equity withdrawal compared to the last period of strong house price appreciation. Companies will be keen to bridge the gap between supply and demand by making up for last year's lost capital spending plans, but there are concerns about excess new capacity being brought on stream when the economy is destined to slow.
Long-term US Treasury yields have been declining since March due to investors demanding lower real returns, thereby implying concerns about the economic outlook if the FOMC decides to taper asset purchases. In the aftermath of the taper tantrum, bond investors eventually forced the FOMC to lower their estimate of the neutral policy rate. Valuations for perfectly-priced US equities are vulnerable if the economic slowdown anticipated by US Treasury investors is sufficiently large to negatively impact corporate profit expectations.

US Growth Held Back by Supply Constraints, but US Treasury Investors Predict Slower Times Ahead

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

Nasdaq-100 Stock Index / Technical Analysis

SPX trendline and price support at 4,250/65 is a key inflection point to hold. NDX well defined trendline support is a bull/bear pivot to watch to hold or break that will define tech risk. HK tech rippling into global cycle as Europe breaks key supports.1-2 day downside spikes have been a buying opportunities in recent months and July seasonality is strong into mid-July and should then taper off.Risk lies with a key low today, spring back Friday and then re tests support conviction in order to set the stage for a fresh risk on push.

SPX trendline and price support at 4,250/65 is a key inflection point to hold. NDX well defined trendline support is a bull/bear pivot to watch to hold or break that will define tech risk. HK tech rippling into global cycle as Europe breaks key supports.1-2 day downside spikes have been a buying opportunities in recent months and July seasonality is strong into mid-July and should then taper off.Risk lies with a key low today, spring back Friday and then re tests support conviction in order to set the stage for a fresh risk on push.

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.

US Treasury (10 Yr Generic) / Technical Analysis

Market dynamics remain largely bullish and we continue to see signs of improving risk appetites. As a result, we are on the verge of shifting to an outright bullish stance. High yield spreads hit new 2021 narrows on Friday as they moved to 14-year lows. Additionally, defensive areas including Staples (XLP), Utilities (XLU), and Gold (GLD) are breaking to new 2021 RS lows.

Market dynamics remain largely bullish and we continue to see signs of improving risk appetites. As a result, we are on the verge of shifting to an outright bullish stance. High yield spreads hit new 2021 narrows on Friday as they moved to 14-year lows. Additionally, defensive areas including Staples (XLP), Utilities (XLU), and Gold (GLD) are breaking to new 2021 RS lows.

U.S. Equity Strategy: Downgrading Consumer Staples To Underweight; Watching 10-Year Yield Closely

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

Cross Asset Strategy

The FOMC's insistence that inflation is "transitory" looks increasingly delusional. Over the latest 3 months (March-May 2021), the core PCE price index has increased at an annualized pace of 6.4% -- and the core CPI has increased at an annualized 7.6% in those 3 months. While the Fed's median inflation forecast for 2021 rose by 1 percentage point between March and June (to 3.4% YoY), and real GDP growth is projected to be far above trend in 2021 and 2022 (which would normally trigger inflation), the FOMC remains sanguine about inflation in 2022, and hence promises to persist with US$120 billion of asset purchases monthly. 
In our view, the persistence of aggressive monetary expansion is the key cause of the spurt in inflation, and will boost inflation further in the months ahead. M2 money supply grew consistently more than 20% YoY in April 2020-March 2021 (more than double the pace in 2009-10), and was still up 14.5% YoY in April 2021 and 12.9% YoY in May 2021 on a very high base. However, despite the FOMC promising to purchase US$120 billion of bonds monthly, the monetary base declined marginally in May 2021 (admittedly after very rapid increases in the previous 3 months), suggesting that the FOMC is turning more pragmatic in its monetary expansion than its official statements suggest. 
Equity valuations are extremely stretched, as exemplified by a CAPE (cyclically-adjusted P/E) ratio of 38x -- levels only reached once in the past 140 years (in the run-up to the "dot com bubble" that peaked in March 2000). As the inflation prints continue to stay elevated, we expect the Fed to be obliged to incrementally withdraw its monetary accommodation -- first by "tapering" (reducing the size of asset purchases, arguably begun in May 2021), and then by raising the Fed Funds rate to 0.25% (up 12.5bp) by the 2-3 November 2021 FOMC meeting. Incremental tightening actions will cause the over-valued equity market to decline 10% over the next 3-6 months. We recommend being underweight equities and risk assets (including emerging markets). Cyclicals, consumer cyclicals and high-yielding defensive stocks will provide refuge from the storm.

The FOMC's insistence that inflation is "transitory" looks increasingly delusional. Over the latest 3 months (March-May 2021), the core PCE price index has increased at an annualized pace of 6.4% -- and the core CPI has increased at an annualized 7.6% in those 3 months. While the Fed's median inflation forecast for 2021 rose by 1 percentage point between March and June (to 3.4% YoY), and real GDP growth is projected to be far above trend in 2021 and 2022 (which would normally trigger inflation), the FOMC remains sanguine about inflation in 2022, and hence promises to persist with US$120 billion of asset purchases monthly. 
In our view, the persistence of aggressive monetary expansion is the key cause of the spurt in inflation, and will boost inflation further in the months ahead. M2 money supply grew consistently more than 20% YoY in April 2020-March 2021 (more than double the pace in 2009-10), and was still up 14.5% YoY in April 2021 and 12.9% YoY in May 2021 on a very high base. However, despite the FOMC promising to purchase US$120 billion of bonds monthly, the monetary base declined marginally in May 2021 (admittedly after very rapid increases in the previous 3 months), suggesting that the FOMC is turning more pragmatic in its monetary expansion than its official statements suggest. 
Equity valuations are extremely stretched, as exemplified by a CAPE (cyclically-adjusted P/E) ratio of 38x -- levels only reached once in the past 140 years (in the run-up to the "dot com bubble" that peaked in March 2000). As the inflation prints continue to stay elevated, we expect the Fed to be obliged to incrementally withdraw its monetary accommodation -- first by "tapering" (reducing the size of asset purchases, arguably begun in May 2021), and then by raising the Fed Funds rate to 0.25% (up 12.5bp) by the 2-3 November 2021 FOMC meeting. Incremental tightening actions will cause the over-valued equity market to decline 10% over the next 3-6 months. We recommend being underweight equities and risk assets (including emerging markets). Cyclicals, consumer cyclicals and high-yielding defensive stocks will provide refuge from the storm.  

3 Months of MoM Inflation Oblige Stealth Tightening; Overvalued Equities to Fall

We continue to see a mixed market environment, but we remain constructive overall considering market dynamics remain largely positive (high yield spreads and relative strength for defensives sending risk-on signals, etc.). We explain our outlook below.

We continue to see a mixed market environment, but we remain constructive overall considering market dynamics remain largely positive (high yield spreads and relative strength for defensives sending risk-on signals, etc.). We explain our outlook below.

U.S. Equity Strategy: S&P 500 Still Bullish, Holding Above 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)

US Growth Held Back by Supply Constraints, but US Treasury Investors Predict Slower Times Ahead

Barring current labour supply constraints, US growth would be even stronger. US Treasury investors are discounting slowing growth, particularly if...

DeSaque Macro Research

NDX and SPX Pivot Supports a Must Hold

SPX trendline and price support at 4,250/65 is a key inflection point to hold. NDX well defined trendline support is a bull/bear pivot to watch to...

Thomas Schroeder

U.S. Equity Strategy: Downgrading Consumer Staples To Underweight; Watching 10-Year Yield Closely

Market dynamics remain largely bullish and we continue to see signs of improving risk appetites. As a result, we are on the verge of shifting to an...

Vermilion Research

3 Months of MoM Inflation Oblige Stealth Tightening; Overvalued Equities to Fall

Core PCE rose 6.4% annualized in Mar-May 2021; despite FOMC promises to persist with large QE, base money contracted in May 2021, & more tightening...

Prasenjit K. Basu

U.S. Equity Strategy: S&P 500 Still Bullish, Holding Above Support

We continue to see a mixed market environment, but we remain constructive overall considering market dynamics remain largely positive. We explain...

Vermilion Research