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.

Cross Asset Strategy

President Biden has followed up fiscal stimulus measures passed into law in December with the announcement of an even larger programme just prior to his inauguration. Full passage of the new measures via regular legislative orders will require 60 votes in Senate, an unlikely outcome, but the alternative budget reconciliation process would require a simple majority in the Senate, although revisions to spending and revenue projections by various committees could become time-consuming.
Any fiscal stimulus invoked by the Biden Administration will be welcomed by the Fed who have appealed for extra help to support aggregate demand for the past few months. The Fed will not seek to prevent rising bond yields in 2021 unless short-term interest rate expectations become unhinged.
Financial markets and the Fed expect economic conditions to significantly improve as vaccine rollouts gain traction and, consequently, reduce the need to impose further lockdowns. Expectations of improving economic conditions underpin forecasts for a strong recovery in corporate profits to new all-time highs, thereby reducing the disconnect between the real economy and financial markets.
<div>Banks' holdings of Treasuries and Agency securities have risen since May, while commercial &amp; industrial loans have fallen over the same period, historically consistent with the arrival of recessionary conditions. Holdings of government securities at banks since the Great Recession have been consistently higher than commercial &amp; industrial loans, thereby leaving them exposed to sizeable capital losses if bond yields continue to climb.  </div>

President Biden has followed up fiscal stimulus measures passed into law in December with the announcement of an even larger programme just prior to his inauguration. Full passage of the new measures via regular legislative orders will require 60 votes in Senate, an unlikely outcome, but the alternative budget reconciliation process would require a simple majority in the Senate, although revisions to spending and revenue projections by various committees could become time-consuming.
Any fiscal stimulus invoked by the Biden Administration will be welcomed by the Fed who have appealed for extra help to support aggregate demand for the past few months. The Fed will not seek to prevent rising bond yields in 2021 unless short-term interest rate expectations become unhinged.
Financial markets and the Fed expect economic conditions to significantly improve as vaccine rollouts gain traction and, consequently, reduce the need to impose further lockdowns. Expectations of improving economic conditions underpin forecasts for a strong recovery in corporate profits to new all-time highs, thereby reducing the disconnect between the real economy and financial markets.
Banks' holdings of Treasuries and Agency securities have risen since May, while commercial &amp; industrial loans have fallen over the same period, historically consistent with the arrival of recessionary conditions. Holdings of government securities at banks since the Great Recession have been consistently higher than commercial &amp; industrial loans, thereby leaving them exposed to sizeable capital losses if bond yields continue to climb.  

Biden's Fiscal Bazooka Raises Risks of Significant Bond Portfolio Losses for Commercial Banks

Founder & Chief Market Strategist - SAV Markets, SAV Markets

Shyam Devani

Founder & Chief Market Strategist - SAV Markets

The last time we saw a major market panic, before Covid, and subsequent delivery of aggressive economic policies - largely monetary - was in 2009. Remarkably, the stock market performance since March 2020 has been very similar to 2009-2010. What indication does this comparison offer today? The answer is "some short term pain and some long term gain". In addition there are other indications across Oil, Bonds, the USD and in Asia South Korea which further supports this thesis.

The last time we saw a major market panic, before Covid, and subsequent delivery of aggressive economic policies - largely monetary - was in 2009. Remarkably, the stock market performance since March 2020 has been very similar to 2009-2010. What indication does this comparison offer today? The answer is "some short term pain and some long term gain". In addition there are other indications across Oil, Bonds, the USD and in Asia South Korea which further supports this thesis. 

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

Our base case called for buying risk on the January 4 dip into mid-January that sets up a peak in the risk cycle with a USD low front running this cycle as the SPX put the final touches on the topside of the rising wedge. Short call just above SPX 3,800.A mid-January risk peak to induce a decline that may surprise markets into late January/early February that sets up a fresh long entry point. Gold has reacted to the USD and now see oil peaking along followed by an equity inflection.NDX exhibits a more compelling top given the contracting rising wedge and mature divergence.

Our base case called for buying risk on the January 4 dip into mid-January that sets up a peak in the risk cycle with a USD low front running this cycle as the SPX put the final touches on the topside of the rising wedge. Short call just above SPX 3,800.A mid-January risk peak to induce a decline that may surprise markets into late January/early February that sets up a fresh long entry point. Gold has reacted to the USD and now see oil peaking along followed by an equity inflection.NDX exhibits a more compelling top given the contracting rising wedge and mature divergence.

Macroeconomics

Since March, US financial markets have been slaves to news about COVID-19 and, consequently, have become susceptible to negative news stemming from other sources. Priced for perfection entering 2021, investors are largely ignoring adverse outcomes, such as higher inflation, stemming from non-pandemic sources.The Federal Open Market Committee (FOMC) will probably tolerate a 50 basis points inflation overshoot of the long-term target, even though members are not expecting this outcome before 2023 Q4. Aggregate demand exceeding supply is the most plausible route to higher inflation, but the economy remains in a sizeable negative output gap at present.Higher prices due to supply chain disruptions in Q1 will probably be overlooked by the FOMC. Meanwhile, narrow money supply (M1) has surged since March, suggesting significant pent-up spending firepower, that could impact inflation, particularly in services.Winter lockdowns will depress economic activity in Q1, thereby reducing global inflationary pressures, notably in Europe. While the FOMC is powerless to prevent economic weakness in Q1, leaving the responsibility to fiscal policy, the real issue facing investors is how long full economic recovery from the pandemic will ultimately require. According to their latest Summary of Economic Projections, FOMC members believe it will take three years for the economy to properly heal and, consequently, any future changes in policy will be signalled by alterations in asset purchases that could produce another taper tantrum.

Since March, US financial markets have been slaves to news about COVID-19 and, consequently, have become susceptible to negative news stemming from other sources. Priced for perfection entering 2021, investors are largely ignoring adverse outcomes, such as higher inflation, stemming from non-pandemic sources.The Federal Open Market Committee (FOMC) will probably tolerate a 50 basis points inflation overshoot of the long-term target, even though members are not expecting this outcome before 2023 Q4. Aggregate demand exceeding supply is the most plausible route to higher inflation, but the economy remains in a sizeable negative output gap at present.Higher prices due to supply chain disruptions in Q1 will probably be overlooked by the FOMC. Meanwhile, narrow money supply (M1) has surged since March, suggesting significant pent-up spending firepower, that could impact inflation, particularly in services.Winter lockdowns will depress economic activity in Q1, thereby reducing global inflationary pressures, notably in Europe. While the FOMC is powerless to prevent economic weakness in Q1, leaving the responsibility to fiscal policy, the real issue facing investors is how long full economic recovery from the pandemic will ultimately require. According to their latest Summary of Economic Projections, FOMC members believe it will take three years for the economy to properly heal and, consequently, any future changes in policy will be signalled by alterations in asset purchases that could produce another taper tantrum.      

US Inflation Risks in 2021: Supply Chain Pressures Dampened by Winter Lockdowns

The call to buy risk on the January 4 draw down has panned out. SPX sub 3,700 long now meeting the 3,800 objective representing the topside of the rising wedge. We also touted buying the Nikkei at 27,000. Keep in mind that rising wedge formations have a 70% probability of breaking lower. Our cycle works turns negative mid Jan into late Jan for a pullback that sets up a very nice long entry for a February rally. The next risk cycle would come in late February.

The call to buy risk on the January 4 draw down has panned out. SPX sub 3,700 long now meeting the 3,800 objective representing the topside of the rising wedge. We also touted buying the Nikkei at 27,000. Keep in mind that rising wedge formations have a 70% probability of breaking lower. Our cycle works turns negative mid Jan into late Jan for a pullback that sets up a very nice long entry for a February rally. The next risk cycle would come in late February.

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)

Biden's Fiscal Bazooka Raises Risks of Significant Bond Portfolio Losses for Commercial Banks

President Biden's $1.9 trillion stimulus augments the $950 billion package passed in December. Rising bond yields could expose banks to significant...

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The Pain and the Gain in Equities and FX

New year celebrations are over and there are bumps along the road for Equity and USD trends - beware we are going over one now.

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Short Risk Call at Top of SPX Wedge

Base case called for buying risk on the January 4 dip into mid-January, setting up a peak in risk, USD low front running this cycle as the SPX put...

Thomas Schroeder

US Inflation Risks in 2021: Supply Chain Pressures Dampened by Winter Lockdowns

US financial markets are priced for perfection in early-2021. Near-term inflation risks stem from supply-chain dislocation. Winter shutdowns should...

DeSaque Macro Research

US Cycle January Event Risk

The call to buy risk on the January 4 draw down has panned out. SPX long meeting the 3,800 objective representing the topside of the rising wedge -...

Thomas Schroeder