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>The 'trade recession' of 2023 is over, and the OECD CLI suggests global trade should grow 4.5% this year, after just 0.4% growth in 2023 (akin to global trade recession). </li>
<li>Despite a hot job market (unemployment rate below NAIRU for 3 years), record illegal and legal immigration (and their higher working-age proportion) are keeping US wage growth relatively in check. </li>
<li>MoM gains in core PCE were lower than core CPI in Feb'24, and likely will be in Mar'24 also, allowing a glide to lower core-PCE inflation and Jul'24 rate cut. </li>
</ul>


The 'trade recession' of 2023 is over, and the OECD CLI suggests global trade should grow 4.5% this year, after just 0.4% growth in 2023 (akin to global trade recession). 
Despite a hot job market (unemployment rate below NAIRU for 3 years), record illegal and legal immigration (and their higher working-age proportion) are keeping US wage growth relatively in check. 
MoM gains in core PCE were lower than core CPI in Feb'24, and likely will be in Mar'24 also, allowing a glide to lower core-PCE inflation and Jul'24 rate cut. 


US Benign This Year: Trade Recession Over, but Rates Still Likely to Decline

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 has been the key factor driving risk assets higher. It faces a short-term air pocket that investors need to understand</li>
<li>Three factors are dragging Global Liquidity -- the US Fed, the PBoC and the rising MOVE Index</li>
<li>Most important near-term, the US money market liquidity has suffered a major hit this week following the April 15th Tax-filing deadline. Next up the QFA at month-end</li>
</ul>



Global Liquidity has been the key factor driving risk assets higher. It faces a short-term air pocket that investors need to understand
Three factors are dragging Global Liquidity -- the US Fed, the PBoC and the rising MOVE Index
Most important near-term, the US money market liquidity has suffered a major hit this week following the April 15th Tax-filing deadline. Next up the QFA at month-end


The Liquidity ‘Air Pocket’: A Short Update After US Tax Filing-Week

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The S&amp;P 500 index tracks the 500 largest names listed in the US and it is one of the most highly-tracked indices in the world.</li>
<li>The index is reviewed quarterly. The next review will be in June 2024 and the evaluation date for the rankings for the constituent selection process is 6th June 2024.</li>
<li>In this insight, we take a look at the Potential ADDs and Potential DELs for the June 2024 index rebal event and the intra-review ADDs/DELs.</li>
</ul>


The S&amp;P 500 index tracks the 500 largest names listed in the US and it is one of the most highly-tracked indices in the world.
The index is reviewed quarterly. The next review will be in June 2024 and the evaluation date for the rankings for the constituent selection process is 6th June 2024.
In this insight, we take a look at the Potential ADDs and Potential DELs for the June 2024 index rebal event and the intra-review ADDs/DELs.


Quiddity Leaderboard S&P 500 June 2024 - Minimal Changes Expected but Intrareview Changes Possible

Global Multi-Asset Investment Strategist, True Insights

Jeroen Blokland

Global Multi-Asset Investment Strategist

Build Well-Diversified Multi-Asset Portfolios

True Insights

Our research helps investors build well-diversified multi-asset portfolios and profit from market developments. In addition, our unique and proven Macro – Sentiment – Valuation (MSV) investment framework ensures a consistent flow of new investment opportunities. Together with our market views, these opportunities will be reflected in our live ETF-based Global Multi-Asset Portfolios.

<ul>
<li>The Fed stuck with its intention to cut rates three times this year while penciling in one rate cut less for 2025 and 2026.</li>
<li>The key takeaway was that Powell is really keen on maintaining ample liquidity instead of what he calls abundant liquidity now. </li>
<li>Stocks, Gold, and Bitcoin love ample liquidity, especially when it becomes abundant again when the economy heads south.</li>
</ul>


The Fed stuck with its intention to cut rates three times this year while penciling in one rate cut less for 2025 and 2026.
The key takeaway was that Powell is really keen on maintaining ample liquidity instead of what he calls abundant liquidity now. 
Stocks, Gold, and Bitcoin love ample liquidity, especially when it becomes abundant again when the economy heads south.


March FOMC Meeting Conclusion: Powell Likes His Balance Sheet ‘BIG!

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>
<a href="https://www.smartkarma.com/entities/super-micro-computer-inc" target="_blank" data-smartkarma-citation="entities:7921:1" rel="noopener">Super Micro Computer (SMCI US)</a> and <a href="https://www.smartkarma.com/entities/deckers-outdoor-corp" target="_blank" data-smartkarma-citation="entities:3028:1" rel="noopener">Deckers Outdoor (DECK US)</a> replace <a href="https://www.smartkarma.com/entities/whirlpool-corp" target="_blank" data-smartkarma-citation="entities:1538:1" rel="noopener">Whirlpool Corp (WHR US)</a> and <a href="https://www.smartkarma.com/entities/zions-bancorporation" target="_blank" data-smartkarma-citation="entities:9490:1" rel="noopener">Zions Bancorporation (ZION US)</a> in the <a href="https://www.smartkarma.com/entities/s-p-500-index" target="_blank" data-smartkarma-citation="entities:22886:1" rel="noopener">S&amp;P 500 INDEX</a> at the close on 15 March.</li>
<li>There are a bunch of inclusions, deletions and migrations across the <a href="https://www.smartkarma.com/entities/s-p-500-index" target="_blank" data-smartkarma-citation="entities:22886:1" rel="noopener">S&amp;P 500 INDEX (SPX INDEX)</a>, the S&amp;P Midcap 400 Index, and the S&amp;P SmallCap 600 Index.</li>
<li>The largest flows will be in the <a href="https://www.smartkarma.com/entities/s-p-500-index" target="_blank" data-smartkarma-citation="entities:22886:1" rel="noopener">S&amp;P 500 INDEX (SPX INDEX)</a> adds and the largest impact in the adds to the S&amp;P SmallCap 600 Index.</li>
</ul>



Super Micro Computer (SMCI US) and Deckers Outdoor (DECK US) replace Whirlpool Corp (WHR US) and Zions Bancorporation (ZION US) in the S&amp;P 500 INDEX at the close on 15 March.
There are a bunch of inclusions, deletions and migrations across the S&amp;P 500 INDEX (SPX INDEX), the S&amp;P Midcap 400 Index, and the S&amp;P SmallCap 600 Index.
The largest flows will be in the S&amp;P 500 INDEX (SPX INDEX) adds and the largest impact in the adds to the S&amp;P SmallCap 600 Index.


S&P500 Index Rebalance: SPCY Additions & Large Impact

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 Benign This Year: Trade Recession Over, but Rates Still Likely to Decline

Global trade volume grew 0.4% in 2023, but lead indicators suggest a strong 2024 recovery. Benign MoM rises in core PCE should enable YoY inflation...

Prasenjit K. Basu

The Liquidity ‘Air Pocket’: A Short Update After US Tax Filing-Week

Global Liquidity is the key factor driving risk assets. It faces an 'air pocket' over coming weeks. Investors need to understand the three factors...