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>With core PCE and core CPI both rising more than 4.8%MoM annualised in recent months, and up 4.7%YoY and 5.3%YoY respectively, the pause could only be justified with forward hawkishness.  </li>
<li>ISM manufacturing PMI below 50 for six months, manufacturing new orders below 50 for 9 months, and Services PMI at 50.3 now, suggest that the US is already in recession.</li>
<li>We continue expecting the FedFunds rate to peak at 5.5%, with the Apr-Sep'23 recession and lagged impact of rate hikes enabling core PCE inflation to subside to 3%YoY by end-2023.</li>
</ul>


With core PCE and core CPI both rising more than 4.8%MoM annualised in recent months, and up 4.7%YoY and 5.3%YoY respectively, the pause could only be justified with forward hawkishness.  
ISM manufacturing PMI below 50 for six months, manufacturing new orders below 50 for 9 months, and Services PMI at 50.3 now, suggest that the US is already in recession.
We continue expecting the FedFunds rate to peak at 5.5%, with the Apr-Sep'23 recession and lagged impact of rate hikes enabling core PCE inflation to subside to 3%YoY by end-2023.


FOMC's Hawkish Pause: Recession and a FF Peak of 5.5% to Finally Restrain Core PCE

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

<ul>
<li>Explosive SPX upside is a result of funds having to chase as most have not participated in the rise above 4,200. </li>
<li>Our 4,500 target may need to be upgraded with a fresh projection at 4,547. Bull energy slated to extend into late June and like buying dips.</li>
<li>Will A and H shares be the next rotation flavor? HSCEI 6,600 bull pivot. A50 13,200 resistance.</li>
</ul>


Explosive SPX upside is a result of funds having to chase as most have not participated in the rise above 4,200. 
Our 4,500 target may need to be upgraded with a fresh projection at 4,547. Bull energy slated to extend into late June and like buying dips.
Will A and H shares be the next rotation flavor? HSCEI 6,600 bull pivot. A50 13,200 resistance.


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.

Dow Jones Industrial Average / Technical Analysis

<ul>
<li>The S&amp;P 500 has marginally surpassed the 4300-4325 area which we have anticipated would cap upside for 2023. </li>
<li>As noted in our 6/6/23 Compass, we are vigilant at these levels given we expect inflation to remain elevated, but we <em><strong>cannot be bearish</strong></em>if the SPX is above 4165-4200</li>
<li>Breadth has continued to improve within the Russell 2000, and the $IWM is approaching our first target of $190 following the breakout above $180. Also see breadth improving within SPX.</li>
</ul>


The S&amp;P 500 has marginally surpassed the 4300-4325 area which we have anticipated would cap upside for 2023. 
As noted in our 6/6/23 Compass, we are vigilant at these levels given we expect inflation to remain elevated, but we cannot be bearishif the SPX is above 4165-4200
Breadth has continued to improve within the Russell 2000, and the $IWM is approaching our first target of $190 following the breakout above $180. Also see breadth improving within SPX.


Dow Testing 1-Year Resistance at 34,280 Ahead of FOMC; Buy Ideas Within Manufacturing/Industrials

Research from Water Tower Research, Water Tower Research

Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Equity Research Firm

Thematic (Sector/Industry)

<ul>
<li>WTR Sustainable Index: During the week ended June 9, 2023, the WTR Sustainable Index outperformed the broader market, rising 9.7% W/W versus the S&amp;P 500 Index (up 0.4%), the Russell 2000 Index (up 1.9%), and the Nasdaq Composite Index (up 0.1%).</li>
<li>Advanced Transportation Solutions (73.6% of the index) drove the index’s performance, rising 12.8%, while Energy Technology (6.8% of the index) was up 2.1% and Industrial Climate and Ag Technology was up 2.5%.</li>
<li>Valuation: Based on forward 12-month consensus estimates, the current P/E ratio of the WTR Sustainable index is 25.0x versus 20.0x for the S&amp;P 500.</li>
</ul>


WTR Sustainable Index: During the week ended June 9, 2023, the WTR Sustainable Index outperformed the broader market, rising 9.7% W/W versus the S&amp;P 500 Index (up 0.4%), the Russell 2000 Index (up 1.9%), and the Nasdaq Composite Index (up 0.1%).
Advanced Transportation Solutions (73.6% of the index) drove the index’s performance, rising 12.8%, while Energy Technology (6.8% of the index) was up 2.1% and Industrial Climate and Ag Technology was up 2.5%.
Valuation: Based on forward 12-month consensus estimates, the current P/E ratio of the WTR Sustainable index is 25.0x versus 20.0x for the S&amp;P 500.


Weekly Sustainable Investing Surveyor : Week Ended June 9, 2023

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.

Cross Asset Strategy

<ul>
<li>The ISM Manufacturing Index scenarios call for a long US Treasuries, short (US) Equities strategy in each scenario.</li>
<li>Financial conditions paint a rosier picture for equities than the ISM Manufacturing, yet downside prevails. </li>
<li>Despite the uptick in US Macro surprises, global economic surprises are dropping. As a result, a massive gap has opened between the MSCI World Index performance and macro surprises. </li>
</ul>


The ISM Manufacturing Index scenarios call for a long US Treasuries, short (US) Equities strategy in each scenario.
Financial conditions paint a rosier picture for equities than the ISM Manufacturing, yet downside prevails. 
Despite the uptick in US Macro surprises, global economic surprises are dropping. As a result, a massive gap has opened between the MSCI World Index performance and macro surprises. 


Macro Market Indicators (June 2023)(Update)

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)

FOMC's Hawkish Pause: Recession and a FF Peak of 5.5% to Finally Restrain Core PCE

We've FOMC critics since Dec'21. ISM manuf'g new orders <50 for 9 months affirm the US is in recession. That, with the FF rate at 5.5% by Sep'23,...

Prasenjit K. Basu

Forced Participation

Explosive SPX upside is a result of funds having to chase as most have not participated in the rise above 4,200. Our 4,500 target may need to be...