This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.
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1. Ray Dalio on the Coming Crisis in US Debt
- Ray Dalio, founder of Bridgewater and author, discusses big numbers and debt cycles in a social and political context
- Tracy and Joe host a podcast episode with Ray Dalio, known for his insights on finance and the invention of the chicken nugget
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2. From Gene Hackman to Bitcoin: Signals, Sell-Offs, and Discipline | The New Barbarians #010
- Episode 10 of New Barbarians podcast covers recent events and discusses Gene Hackman’s passing
- Mark Connors shares insights on investors seeking certainty and compares them to characters in Gene Hackman’s movies
- Trump’s statements on Truth social and implications for the crypto market are analyzed, drawing parallels to themes of integrity and leadership in Hoosiers.
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3. The US Bear Market: Stage One – DENIAL
- After several months of a technical top-consolidation, the US market is entering a bear market. The piercing of the Magnificent-7 bubble will continue to drive selling pressure in the market.
- Inflation pressures will tie the Fed’s hands to bail out the market with another Fed Put. Another market bailout would cost much more than the $5 trillion COVID bailout.
- The administration’s policy sequencing is pushing inflation expectations higher as the immediate tariff implementation supersedes other anti-inflationary policies, which will take longer to implement.
4. HONG KONG ALPHA PORTFOLIO (February 2025)
- HK Alpha Portfolio returned 13.58% in February and outperformed the benchmark by 7.68%. The portfolio has outperformed Hong Kong indexes by 5.16% to 11.48% since its inception on 10/01/24.
- About 50% of the portfolio’s excess returns have been from alpha generation. The portfolio had no exposure to Real Estate, Energy, or Utilities.
- At month-end we sold AAC Technologies Holdings (2018 HK) , Trip.com Group (9961 HK) , MINISO Group Holding (9896 HK) , and trimmed Xiaomi Corp (1810 HK) .
5. 2025 Global Investment Strategy
- Last year 70% of the calls made money. This year we make another 43 investment recommendations, global, US, Europe, Japan and 8 Asian countries.
- Our prediction that Bitcoin will become a US reserve asset under Trump is already playing out.
- Stock market volatility will persist, with diverging performance and subdued gains compared with 2024. Our top picks are the US, Japan, Taiwan, Korea and India and selectively China.
6. ECB: Meaningfully Less Restrictive
- The ECB’s sixth 25bp deposit rate cut to 2.5% was unsurprising, and its characterisation of policy as meaningfully less restrictive leaned towards our relatively hawkish view.
- Policy rates may already be close to neutral. Looser fiscal policy plans also pressure monetary policy to follow a tighter path than would otherwise have been necessary.
- We still expect the ECB to hold rates in April, which is no longer a controversial call. A final 25bp ECB cut in June remains in our outlook (BoE cuts in May and Fed on hold).
7. The Drill – Geopolitical Tensions Are Easing, Not Escalating
- Hello everyone, and welcome back to our weekly editorial on geopolitics, commodities, and macro.
- While there hasn’t been much news on the commodity front since last week, we have a bunch of moving parts on the geopolitical scene—last Friday’s heated (and unplanned) Zelensky/Trump debate, the subsequent removal of all military aid targeting Ukraine, and now Trump trying his best to get all counterparts and allies to block any partnerships with China.
- While this was already evident earlier this week, when the administration urged Mexico to impose tariffs on China to avoid US tariffs, today’s reports of Putin acting as the middleman in the Iran nuclear deal were not something anyone had on their bingo cards.
8. HEM: Pausing Policy Easing
- Central banks are advised to slow, pause, or stop reducing rates due to rising inflation and labour costs.
- Inflation is unexpectedly increasing, and labour costs are exceeding target-consistent levels.
- Monetary policy is almost neutral according to activity trends, but rate hikes in 2026 could counteract unnecessary easing.
9. Steno Signals #187 – Remember August & September 2024? Tariffs are to blame
- Friday’s bizarre scenes in the Oval Office will take some time to digest for all involved counterparties.
- I don’t feel in a position to judge either side, but I will use this analysis to assess the ramifications of the event.
- As a disclaimer, remember that I am European!Trump’s argument that the U.S. pays too much to the rest of the world is, in many ways, entirely correct—but also quite banal.
10. HEW: Political Blunderbuss
- Shot from Trump’s blunderbuss is hitting sentiment and risk appetite yet the hard data remain resilient. Europe waking up on defence punched markets more in hope than reality, but hawkish inflation and ECB news helped create room to close our bullish call.
- Next week’s US inflation data are the scheduled global highlight, along with the Bank of Canada likely pausing its cutting cycle. We also await UK GDP data confirming resilience inconsistent with the dovish panic at February’s BoE meeting.
- Note: Smartkarma is now the sole distributor of our research, so clients will only receive all other research from Smartkarma (queries to transition@smartkarma.com).