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>With the ISM below 50 and falling, this historically has been one of the weakest phases for equities. On average, the 3-month average return has been virtually zero.</li>
<li>For any level below 46.0, our ‘Neutral’ scenario, equities have no upside, including Emerging Market Equities.</li>
<li>Our ISM Manufacturing Index scenarios call for a long US Treasuries, short US Equities strategy.</li>
</ul>


With the ISM below 50 and falling, this historically has been one of the weakest phases for equities. On average, the 3-month average return has been virtually zero.
For any level below 46.0, our ‘Neutral’ scenario, equities have no upside, including Emerging Market Equities.
Our ISM Manufacturing Index scenarios call for a long US Treasuries, short US Equities strategy.


ISM Manufacturing: Zero Upside Left for Equities

<ul>
<li>The MOVE/VIX ratio has spiked to its highest level since 2005.</li>
<li>When high MOVE/VIX ratio levels are driven predominantly by an increase in Treasury market volatility, things look ugly for equities.</li>
<li>When the MOVE/VIX ratio tops 7.0, driven by an elevated MOVE Index, US equities have underperformed US Treasuries by almost 6% in the next three months.</li>
</ul>


The MOVE/VIX ratio has spiked to its highest level since 2005.
When high MOVE/VIX ratio levels are driven predominantly by an increase in Treasury market volatility, things look ugly for equities.
When the MOVE/VIX ratio tops 7.0, driven by an elevated MOVE Index, US equities have underperformed US Treasuries by almost 6% in the next three months.


MOVE Vs. VIX: Hard Data Showing that Equity Markets Are at Risk!

<ul>
<li>Monday market dynamics suggest more liquidity is needed to limit contagion risks.</li>
<li>5% is the magic level at which things start to break. The Fed needs time to make things whole again before resuming rate hikes.</li>
<li>Recent events will profoundly impact consumer and business confidence and increase the odds of a recession. Just watch oil!</li>
</ul>


Monday market dynamics suggest more liquidity is needed to limit contagion risks.
5% is the magic level at which things start to break. The Fed needs time to make things whole again before resuming rate hikes.
Recent events will profoundly impact consumer and business confidence and increase the odds of a recession. Just watch oil!


Monetary Policy Update! Federal Reserve Unlikely to Hike Rates in March

<ul>
<li>A concise overview of the latest developments in the unfolding banking crisis and the surprise central bank intervention following them.</li>
<li>Three key reasons equities markets did not collapse: 1) LIQUIDITY, 2) ECB, 3) The Outlier Narrative.</li>
<li>Other Macro data not to be overlooked and our Fear &amp; Frenzy Sentiment Index moved away(!) from Fear this week.</li>
</ul>


A concise overview of the latest developments in the unfolding banking crisis and the surprise central bank intervention following them.
Three key reasons equities markets did not collapse: 1) LIQUIDITY, 2) ECB, 3) The Outlier Narrative.
Other Macro data not to be overlooked and our Fear &amp; Frenzy Sentiment Index moved away(!) from Fear this week.


Weekly Market Monitor (10) - Central Banks Intervene to Fight Contagion Risks

<ul>
<li>The (equity) risk premium for banks (<a href="https://www.smartkarma.com/entities/spdr-s-p-bank-etf" target="_blank" data-smartkarma-citation="entities:32764:1" rel="noopener">SPDR S&amp;P Bank ETF (KBE US))</a> will go up while bank profitability will go down. There will be questions about smaller bank regulations.</li>
<li>Startups and smaller tech funds will struggle, potentially resulting in a lower valuation of the entire technology space (<a href="https://www.smartkarma.com/entities/ishares-us-technology-etf" target="_blank" data-smartkarma-citation="entities:32856:1" rel="noopener">iShares US Technology ETF (IYW US)).</a>
</li>
<li>Unless the Bank Term Funding Program does not solve the liquidity issues, the Federal Reserve must continue raising rates, forcing another standoff with markets (<a href="https://www.smartkarma.com/entities/spdr-s-p-500-etf-trust" target="_blank" data-smartkarma-citation="entities:763:1" rel="noopener">SPDR S&amp;P 500 (SPY US))</a> .</li>
</ul>


The (equity) risk premium for banks (SPDR S&amp;P Bank ETF (KBE US)) will go up while bank profitability will go down. There will be questions about smaller bank regulations.
Startups and smaller tech funds will struggle, potentially resulting in a lower valuation of the entire technology space (iShares US Technology ETF (IYW US)).

Unless the Bank Term Funding Program does not solve the liquidity issues, the Federal Reserve must continue raising rates, forcing another standoff with markets (SPDR S&amp;P 500 (SPY US)) .


Silicon Valley Bank: Some Observations on Contagion, Moral Hazard, and Monetary Policy

United States

SPDR S&P 500 ETF Trust is an exchange-traded fund incorporated in the USA. The ETF tracks the S&P 500 Index. The Trust consists of a portfolio representing all 500 stocks in the S&P 500 Index. It holds predominantly large-cap U.S. stocks. This ETF is structured as a Unit Investment Trust and pays dividends on a quarterly basis. The holdings are weighted by market capitalization.

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SPDR S&P 500 (SPY US)

ISM Manufacturing: Zero Upside Left for Equities

The ISM Manufacturing Index, down to 46.3 and likely to fall further, points to zero upside for US, Developed, and Emerging Market Equities in the...

Jeroen Blokland

MOVE Vs. VIX: Hard Data Showing that Equity Markets Are at Risk!

The MOVE/VIX ratio spike driven by rising Treasury market volatility indicates that equities will significantly underperform Treasuries in the...

Jeroen Blokland

Monetary Policy Update! Federal Reserve Unlikely to Hike Rates in March

Elevated contagion risks, ongoing liquidity needs, and lack of trust likely force the Fed to pause, not end hiking rates.

Jeroen Blokland

Weekly Market Monitor (10) - Central Banks Intervene to Fight Contagion Risks

The Weekly Monitor - Your weekly chart storm covering all major developments in Macro, Sentiment, and Valuation and their impact on Portfolio...

Jeroen Blokland

Silicon Valley Bank: Some Observations on Contagion, Moral Hazard, and Monetary Policy

After the US Treasury and Federal Reserve intervention, where are we now on contagion risk and monetary policy after the Silicon Valley Bank demise?

Jeroen Blokland

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