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>The popular ‘End of China’ narrative is wide-of-the mark. China has suffered a self-induced (Western-style) demand slowdown to protect the Yuan</li>
<li>2023 seems to have brought in a new policy regime that emphasizes domestic GDP growth over a rigid exchange rate</li>
<li>Watching liquidity is crucial. Latest evidence shows the People’s Bank injecting substantial funds back into domestic money market. Expect a coming cyclical pick-up</li>
</ul>


The popular ‘End of China’ narrative is wide-of-the mark. China has suffered a self-induced (Western-style) demand slowdown to protect the Yuan
2023 seems to have brought in a new policy regime that emphasizes domestic GDP growth over a rigid exchange rate
Watching liquidity is crucial. Latest evidence shows the People’s Bank injecting substantial funds back into domestic money market. Expect a coming cyclical pick-up


‘The End of China’ Narrative Is Completely Wrong: Think Liquidity, Think Cycle

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.

Macroeconomics

<ul>
<li>Contrary to many other Sentiment Indicators - which we don’t really understand - our Fear &amp; Frenzy Sentiment Index has moved into ‘Frenzy.’</li>
<li>China is considering launching a state-backed stabilization fund to boost the Chinese stock market. We show what happened the last time China came up with a similar move. </li>
<li>Even though headline and core inflation were close to expectations, the underlying data signals trouble. Powell’s favorite CPI measure, SuperCore inflation, rose 7.6% on an annualized basis in September. </li>
</ul>


Contrary to many other Sentiment Indicators - which we don’t really understand - our Fear &amp; Frenzy Sentiment Index has moved into ‘Frenzy.’
China is considering launching a state-backed stabilization fund to boost the Chinese stock market. We show what happened the last time China came up with a similar move. 
Even though headline and core inflation were close to expectations, the underlying data signals trouble. Powell’s favorite CPI measure, SuperCore inflation, rose 7.6% on an annualized basis in September. 


The Weekly Market Monitor – Bad Inflation + Bad Sentiment = Bad Bounce?

<ul>
<li>This week, we show why the economy is in the final innings of this economic cycle. The only macro-indicator that stubbornly refuses to acknowledge this is the US labor market. </li>
<li>Real yields are bad for Equities and good for Bonds, but gold is the unlikely asset class that really thrives when real rates spike above 2%. </li>
<li>We update our scary valuation chart, revealing a monstrous gap between yields and stock market valuation, and look at Bitcoin positioning, our Fear &amp; Frenzy Sentiment Index, and much more.</li>
</ul>


This week, we show why the economy is in the final innings of this economic cycle. The only macro-indicator that stubbornly refuses to acknowledge this is the US labor market. 
Real yields are bad for Equities and good for Bonds, but gold is the unlikely asset class that really thrives when real rates spike above 2%. 
We update our scary valuation chart, revealing a monstrous gap between yields and stock market valuation, and look at Bitcoin positioning, our Fear &amp; Frenzy Sentiment Index, and much more.


The Weekly Market Monitor – Real Rates = Growth Scare?

<ul>
<li>Inflation Came down fast across Europe, yet bond yields continued to rally. We think markets are wrong on yields even though Italy and France have zero appetite to sustainably lower their budget deficits.</li>
<li>We discuss falling consumer sentiment and the increasing parallel between current macro-consumer conditions and Q4 2018 when retail sales tumbled. Are we in for a rerun? </li>
<li>Though not the mother of all stock market indices, several indices have dropped below their 200-day moving average, while the equally weighted S&amp;P 500 Index has reversed all of this year’s gains. </li>
</ul>


Inflation Came down fast across Europe, yet bond yields continued to rally. We think markets are wrong on yields even though Italy and France have zero appetite to sustainably lower their budget deficits.
We discuss falling consumer sentiment and the increasing parallel between current macro-consumer conditions and Q4 2018 when retail sales tumbled. Are we in for a rerun? 
Though not the mother of all stock market indices, several indices have dropped below their 200-day moving average, while the equally weighted S&amp;P 500 Index has reversed all of this year’s gains. 


The Weekly Market Monitor – Immaculate Disinflation, Spiking Yields, and the Waiting Continues

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.

Technical Analysis

TSE Tokyo Price Index TOPIX / Technical Analysis

<ul>
<li>There continues to be little traction above $93 on the MSCI ACWI (ACWI-US), which remains the top-end of our anticipated 2023 trading range.</li>
<li>At the same time, we cannot get too bearish until there is a break below $90.50 short-term support.</li>
<li>EURO STOXX 50 pulling back to 4100-4200 buy area. TOPIX holding above 2120 support. Buy ideas within Technology, Construction Materials, gold miners, Utilities, other defensives.</li>
</ul>


There continues to be little traction above $93 on the MSCI ACWI (ACWI-US), which remains the top-end of our anticipated 2023 trading range.
At the same time, we cannot get too bearish until there is a break below $90.50 short-term support.
EURO STOXX 50 pulling back to 4100-4200 buy area. TOPIX holding above 2120 support. Buy ideas within Technology, Construction Materials, gold miners, Utilities, other defensives.


Japan Remains Leadership; Actionable Pullback in Europe; Downgrading China/Hong Kong

China

The Shanghai Stock Exchange Composite Index is a capitalization-weighted index. The index tracks the daily price performance of all A-shares and B-shares listed on the Shanghai Stock Exchange. The index was developed on December 19, 1990 with a base value of 100. 

Shanghai Stock Exchange Composite Index (SHCOMP INDEX)

Shanghai Stock Exchange Composite Index (SHCOMP INDEX)

‘The End of China’ Narrative Is Completely Wrong: Think Liquidity, Think Cycle

The hip ‘End of China’ story is wrong. China has suffered a self-induced (Western-style) demand slowdown to protect the Yuan, but 2023 has brought...

Michael J. Howell

The Weekly Market Monitor – Bad Inflation + Bad Sentiment = Bad Bounce?

Eurozone Equities are pricing in a massive improvement of the Credit Impulse (change in credit growth relative to GDP) that is unlikely to...

Jeroen Blokland

The Weekly Market Monitor – Real Rates = Growth Scare?

Defaults are rising, gasoline demand is falling out of bed, and price pressures reside despite spiking energy prices. Is the growth slump finally...

Jeroen Blokland

The Weekly Market Monitor – Immaculate Disinflation, Spiking Yields, and the Waiting Continues

Inflation is collapsing and even turned negative in the Netherlands. Yet, bond yields continue to spike, providing ample downside risk for equities.

Jeroen Blokland

Japan Remains Leadership; Actionable Pullback in Europe; Downgrading China/Hong Kong

#Japan #Nikkei 225 and #TOPIX above base supports at 30,800 and 2120, respectively. We've discussed buying pullbacks to 1950-2000 on TOPIX, but it...

Vermilion Research