Macro

In today’s briefing:

Charting Beyond the Euro Area Headlines
The Week That Was in ASEAN@Smartkarma – Sea Ltd’s Loss, Grab’s Balance, and Bangkok Dusit Medical.
Energy Cable #47: Price Always Leads Narrative
Positioning Watch – Positioning for Lower Yields and Weaker USD

Charting Beyond the Euro Area Headlines

By Thomas Lam

Available data through October implies that prevailing GDP growth is possibly tracking weaker than the prior quarter
A proxy of household saving propensity seems to be hovering around elevated levels partly because of greater uncertainty
Notwithstanding the recent disinflationary prints, the most persistent category of HICP inflation appears to be sticky at roughly twice the pre-pandemic average level

The Week That Was in ASEAN@Smartkarma – Sea Ltd’s Loss, Grab’s Balance, and Bangkok Dusit Medical.

By Angus Mackintosh

The past week saw insights on Sea (SE US), Grab Holdings (GRAB US), Bangkok Dusit Medical Services (BDMS TB), SCG Decor PCL (SCGD TB), and Amara Holdings (AMA SP).
There was also a macro insight on Singapore’s economic outlook plus insights on Singapore Airlines, Sheng Siong (SSG SP), Mitra Keluarga (MIKA IJ), and Japfa Comfeed Indonesia.
The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across Southeast Asia.

Energy Cable #47: Price Always Leads Narrative

Happy Monday to everybody from a cold and rainy Copenhagen.
We are now long crude oil again as we find the narrative too bearish given the fundamentals.
Before we start to talk about our crude oil case, we would like to highlight the volatility in post covid energy markets and how these have benefitted sellers in the futures markets more than buyers keeping storage costs constant.

Positioning Watch – Positioning for Lower Yields and Weaker USD

Hello everyone, and welcome back to our weekly positioning watch where we run through interesting observations found in positioning data for the latest week (now back on schedule).
Recent trading days have been all about lower bond yields, a weaker USD and rising equity prices, as risk asset prices are at the moment all about discount rates and swap-pricing of the future of central bank policy.
As we have addressed, conditions are slowly but surely starting to decrease the risk/reward of going long-risk assets at current junctures.

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Nov 20

Daily Brief Macro: Steno Signals #74 – Did King USD Just Break? and more

In today’s briefing:

Steno Signals #74 – Did King USD Just Break?
Fed’s Policy Rate Benchmark Under Scrutiny: Goodbye to the Federal Funds Rate?
How Far Can This Rally Run?
Assessing Economic Risk Through the Biden-Xi Meeting Lens

Steno Signals #74 – Did King USD Just Break?

The sharp move in USDJPY and other USD pairs towards the end of last week has caught our attention and it arrives on the back of Powell letting go of the steering wheel on USD real rates.
The weekly credit data from the US economy keeps weakening and we are en route for a credit contraction in the US during Q1/Q2 next year.
Powell is probably right to let go of the tightness in USD real rates, but the question is whether he could be tempted to take back control in December in a final policy error?

Fed’s Policy Rate Benchmark Under Scrutiny: Goodbye to the Federal Funds Rate?

By Said Desaque

The poor results from the US Treasury’s latest 30-year bond auction highlights limited private investor appetite. Pressure on the Treasury to persist with high levels of short-term borrowing has increased.
Aggressive quantitative easing and interest on reserves have significantly lowered trading in the federal funds market by US banks, while Federal Home Loan Banks currently dominate lending.
The Fed’s policy rate could shift to the Secured Overnight Funding Rate. Functionality could be impacted by shifting perceptions about the collateral quality of Treasury securities due to high borrowing.

How Far Can This Rally Run?

The U.S. equity rally off the bottom in late October is characterized by strong price momentum and shows a high degree of upside potential.
Point and figure charting signifies measured objectives indicating percentage gains in the high teens or low 20s.
We also offer a series of sell signal triggers that indicate possible inflection points in risk/reward potential.

Assessing Economic Risk Through the Biden-Xi Meeting Lens

The Biden-Xi meeting in San Francisco exposed the growth risks and vulnerabilities of each country’s economy.
The recent bond market rally and falling oil prices could be a signal of a growth slump.
A review of the U.S. and Chinese economies shows that slowdown risks are low. Consequently, investors should embrace the recent risk-on tone in the markets.

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Nov 18

Daily Brief Macro: EM by EM #30 Pick-up from King Carry? and more

In today’s briefing:

EM by EM #30 Pick-up from King Carry?
US Recession Still Likely but Imports to Rebound Sooner, Benefiting India-ASEAN
Portfolio Watch: Celebration for the right or wrong reasons?
China Housing Market’s ‘Silver October’ Tarnishes
EA: Inflation Tracking Toward Target
The Weekly Market Monitor – On Deflation, Spot Bitcoin ETFs, Rising Delinquencies, & Faltering China

EM by EM #30 Pick-up from King Carry?

By Emil Moller

After a prolonged saga of stimulus negotiations and the expenditure of countless man-hours in preparation, it is evident that the Chinese stimulus can, at best, provide temporary relief to an ongoing structural issue that is not going away anytime soon.
While we received some positive numbers this week, with industrial production and consumer spending exceeding expectations, the housing market figures remain dismal and are unlikely to improve unless the CCP alters its course.
Apart from causing concern in the financial sector, the direct impact on the labor market is an often overlooked yet plainly evident consequence of the current crackdown on real estate

US Recession Still Likely but Imports to Rebound Sooner, Benefiting India-ASEAN

By Prasenjit K. Basu

China continues losing US market share at 1pp+ per year since Mar’18 (when its share was 21.8%); in the year to Sep’23, China’s share of US imports declined to 14%.
US imports have declined YoY in 10 of the past 11 months. Although we expect the US to go into recession this quarter and next, US imports have already troughed.
Although the US economy will weaken (as PCE is slowed by student-loan repayments, and fiscal pullback begins), US imports should start rebounding in Q1CY24, boosting India and ASEAN, not China.

Portfolio Watch: Celebration for the right or wrong reasons?

By Elias Lisberg Glistrup

The Fed was ‘navigating by the stars under cloudy skies’, but now markets have implicitly been allowed a go.
The provisional result? Rally in bonds and a subsequent rally in equities.
In this week’s Portfolio Watch, we’ll have a closer look at the reasoning behind the move lower in yields and whether they are a sign of misalignment between hopes and expectations versus still lingering suboptimal fundamentals. We also try to gauge whether the recent weakness in the USD will continue, and its link to the manufacturing cycle.

China Housing Market’s ‘Silver October’ Tarnishes

By Caixin Global

China’s housing sales continued to slide in October, a traditionally peak month for the real estate sector, showing that recent supportive government policies failed to boost the ailing property market.
Commercial housing sales by area in October declined 28.4% from September to 77.73 million square meters, according to data released Wednesday by the National Bureau of Statistics (NBS).
September and October are usually two months of upbeat property sales and are known as “Golden September and Silver October.

EA: Inflation Tracking Toward Target

By Phil Rush

The final EA HICP inflation print confirmed the 2.9% flash for Oct-23. Disinflation was broadly experienced across countries, primarily driven by food and energy prices.
Underlying inflation has also eased further, with the median impulse now close to the ECB’s target in each of the EA’s Big-4 member states.
November remains likely to be a temporary trough ahead of December base effects. The ECB should hold rates if the impulse stays here and eventually cut if it falls further.

The Weekly Market Monitor – On Deflation, Spot Bitcoin ETFs, Rising Delinquencies, & Faltering China

Our Fear & Frenzy Sentiment Index has hit ‘FRENZY,’ sending a short-term SELL signal!
The Fed is likely done, especially with inflation expectations falling, keeping real yields high. Unfortunately, some macro indicators hint at deflation, which is the ugly side of disinflation.
China, new week, same story. China’s property sector is going absolutely nowhere. In fact, things are worsening with the decline in house prices the steepest nine(!) years.

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Nov 17

Daily Brief Macro: Increase in Trading of Inverse ETFs in Korea Post Temporary Ban on Stocks Short Selling and more

In today’s briefing:

Increase in Trading of Inverse ETFs in Korea Post Temporary Ban on Stocks Short Selling
EIA Watch: September Weakness Was Fake News. Time to Buy Oil?
CX Daily: Big Tech Is Changing in China, and So Are Its Hiring Plans
US Policy Watch: No Shutdown but Are We Out of the Woods Yet?

Increase in Trading of Inverse ETFs in Korea Post Temporary Ban on Stocks Short Selling

By Douglas Kim

In this insight, we discuss the increase in trading of inverse ETFs in Korea post the temporary ban on stock short selling.
From 6th to 14th November, individual investors made net purchases of 46 inverse ETFs worth 3.7 trillion won. Local institutions also made net purchases of 1.6 trillion won.
On the other hand, foreigners net sold 5.8 trillion won worth of inverse ETFs.

EIA Watch: September Weakness Was Fake News. Time to Buy Oil?

Welcome back to our weekly EIA report, where we run through demand and supply data and give our cents on where we are heading next – and what the implications are for energy markets.
As always we present the main conclusions up-front: 1) Oil demand will likely come in hot in November on the back of strong gasoline demand in October due to the lags in energy markets (Gasoline leads oil – not the other way around).
2) Gasoline numbers in September were likely just a data-glimpse, as no high-frequent data series seem to agree with the narrative that demand for fuel is dropping.

CX Daily: Big Tech Is Changing in China, and So Are Its Hiring Plans

By Caixin Global

Jobs / In Depth: Big tech is changing in China, and so are its hiring plans\
China-U.S. /: China, U.S. agree to boost climate cooperation ahead of leaders’ meeting
Credit rating /: Central bank pushes fintech companies to jump into credit rating

US Policy Watch: No Shutdown but Are We Out of the Woods Yet?

By Anne Sandager

The U.S. House of Representatives has approved a short-term extension of the FY-2023 budget 3 days before the government was scheduled to shut down.
The so-called Continuing Resolution (CR) was passed in a 336-95 vote.
Two Democrats — Reps. Jake Auchincloss (Mass.) and Mike Quigley (Ill.) — and 93 Republicans opposed the bill.

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Nov 16

Daily Brief Macro: Navigating the Crude Oil Crack Spread and more

In today’s briefing:

Navigating the Crude Oil Crack Spread
Positioning Watch – The Cocktail of Heavy Logs in Both Equities and Bonds
Charting Beyond the US CPI Headlines
CX Daily: Chinese Consumers Deluged With Cheap Loans
Electricity Watch: Why Ze Germans Are OK for Now
UK: Disinflation Driven in Oct-23
5 Things We Watch: Trump, Electricity, CPI, Crude Oil, Fixed Income
EUR Watch: Damned if You Do Until You Are Damned if You Don’t

Navigating the Crude Oil Crack Spread

By Pranay Yadav

Crack spread refers to the gross processing margin of refining (“cracking”) crude oil into its by-products.
Crack spreads are affected by seasonality, supply, and inventory levels of crude and refined products, as well as demand for each refined product.
A low-demand outlook for refined products of crude is prevalent due to expectations of an economic slowdown.

Positioning Watch – The Cocktail of Heavy Logs in Both Equities and Bonds

Hello everyone, and welcome back to our weekly positioning watch, which due to delays in the CFTC data has been postponed to today (data was available yesterday evening).
Almost as usual, markets find themselves in an odd position, as they await the next big event to move price action after Powell’s latest shocker a couple of weeks ago coupled with a severe sell-off in bonds in recent weeks.
Today’s CPI report will likely not change a whole lot, but equity markets may continue their run upward if we are right in our prediction from yesterday (more on that here).

Charting Beyond the US CPI Headlines

By Thomas Lam

Both “supercore” and the Most Persistent category of CPI inflation improved directionally in October
But the implications on inflation expectations and trend inflation as a result of the above-average 3-month and 12-month run-rates remain moot
My measure of long-term inflation expectations (CPI-based) tentatively shows a somewhat less well anchored backdrop than before

CX Daily: Chinese Consumers Deluged With Cheap Loans

By Caixin Global

Loans / In Depth: Chinese consumers deluged with cheap loans
APEC /Analysis: Xi-Biden APEC meeting may help stabilize ties, won’t change fundamentals
Credit /: Government borrowings boosted China’s credit growth in October

Electricity Watch: Why Ze Germans Are OK for Now

We have so far seen a very contained market reaction to the electricity aid package from Germany last week, but there are loads of reasons why markets can absorb the demand-fuelling news in energy markets short-term.
Maybe there is a window of opportunity for the German industry before price pressures return?
The IFO index covering the Germany industry is likely going to improve in the coming months.

UK: Disinflation Driven in Oct-23

By Phil Rush

UK inflation undershot expectations of 4.8% in October by plummeting to 4.6%. Most of that drop was an energy price base effect with downside news in car and hotel prices.
Services inflation aligned with our relatively low forecast but disappointed the BoE. Other measures of underlying inflation, like the median, remained surprisingly strong.
This outcome lessens the risk of another BoE rate hike. However, second-round effects still constrain this disinflation trend, with persistent excesses discouraging cuts.

5 Things We Watch: Trump, Electricity, CPI, Crude Oil, Fixed Income

By Ulrik Simmelholt

This week we start out by looking at Trump’s chances of getting reelected then move on to European electricity markets after that we’ll discuss yesterday’s CPI print before moving on to crude oil and then ending with fixed income positioning.
President Biden’s approval ratings continue to sour as the country heads into potential Oil price headwinds and numerous unsolved foreign policy challenges.
The Biden camp has launched a number of PR offensives during 2023 – most notably the coining of “Bidenomics”, but none have managed to close the gap, which has even accelerated since summertime.

EUR Watch: Damned if You Do Until You Are Damned if You Don’t

EUR assets will suffer if the activity levels rebound too quickly due to a lack of elasticity in the commodity/energy supply in Europe.
The EUR (and EUR assets) have suffered from a damned if you do, damned if you don’t a scenario in recent years as the scarcity of energy has taken center stage in the pricing of everything from the EUR, to EUR discount rates and EUR risk assets.
Low volatility in energy prices allows energy-sensitive industrials to brighten up the outlook, which is initially good for the EUR, but the problem is just that there is a potential negative embedded feedback loop in that journey.

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Nov 15

Daily Brief Macro: US Inflation: First Take! and more

In today’s briefing:

US Inflation: First Take!
UK CPI Watch: No Path to 2% Unless Inflation Deflates on a Monthly Basis
US CPI Reaction Nugget: Further Fuel for the Market Rally
Great Game – 3 Reasons Why Trump Will Win – And 1 Reason He Won’t
UK: Resilience Defies Doves

US Inflation: First Take!

Disinflation Lives! US consumer prices were unchanged in October. As a result, headline inflation dropped to 3.2%. Core inflation declined to 4.0%, the lowest level in two years.
However, like last month, the underlying data look less upbeat. The 3-month annualized Core Services excluding Housing CPI has risen for four(!) consecutive months and reached 4.9% in October.
The disinflation narrative remains intact, opening the door for the Fed to proactively lower interest rates. But it remains doubtful whether Powell & Co. are truly inclined to do so.

UK CPI Watch: No Path to 2% Unless Inflation Deflates on a Monthly Basis

Welcome to our short and chart-packed preview of UK inflation out tomorrow morning.
Extreme base effects are at play in October due to energy price revisions in October 2022
Housing and household services are about to turn negative year over year

US CPI Reaction Nugget: Further Fuel for the Market Rally

By Elias Lisberg Glistrup

We just had the October inflation data from the US, and our projections were spot on.
0% MoM and 3.23% YoY, is a sign of successful cooling but also that tailwinds from base-effects are long gone.
As we rightly called, the energy component has collapsed, and while the category doesn’t contribute much (in its separate bracket) it does however feed into most of the other.

Great Game – 3 Reasons Why Trump Will Win – And 1 Reason He Won’t

By Mikkel Rosenvold

While the internet seems totally preoccupied with the San Francisco summit between Xi and Biden, I find other news and analysis much more interesting right now.
This week saw the release of a major New York Times/Siena Poll of the 2024 Presidential Election – and some of the results were outright shocking.
I’m now at a point where a Trump win next November looks very likely to me.

UK: Resilience Defies Doves

By Phil Rush

The UK unemployment rate remained at 4.2% again, contrary to consensus expectations that may still be extrapolating the spurious earlier trend or revision-prone payrolls.
Demand may be softening for new workers, but wages seem excessive because of structural issues more than cyclical ones, which means the problem can persist.
We believe the BoE stopped hiking prematurely, but it is unlikely to hike again soon. Resilient activity and persistent excess inflation would discourage cuts instead.

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Nov 14

Daily Brief Macro: The Week That Was in ASEAN@Smartkarma – Cisarua Mountain Dairy and more

In today’s briefing:

The Week That Was in ASEAN@Smartkarma – Cisarua Mountain Dairy, Sumber Alfaria Trijaya, and DBS Bank
Energy Watch: Time to Buy Oil Again?
USD CPI Watch: The tricky path to 2% despite a soft report
EUROPOLITICS WATCH: Opposition Victory in Poland Opens Door for Ukraine in the EU?
Energy Cable #46: Scholz to the rescue!
Singapore Economics: Cost Pressures Warrant a Review of the Old Playbook
China Economics: Troubles Not Easily Solved by Beijing’s Support Measures
[TW2] The Week That Was in Markets in 11 Charts (W/E 11th Nov 2023)

The Week That Was in ASEAN@Smartkarma – Cisarua Mountain Dairy, Sumber Alfaria Trijaya, and DBS Bank

By Angus Mackintosh

The past week saw insights on Cisarua Mountain Dairy (CMRY IJ), Sumber Alfaria Trijaya (AMRT IJ), Ace Hardware Indonesia (ACES IJ), Boustead Holdings (BOUS MK), and Multi Bintang Indonesia.
There was also a macro insight on Thailand as the new government settles in and equity bottom-up insights on OCBC (OCBC SP) and DBS (DBS SP) from Daniel Tabbush.
The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across Southeast Asia.

Energy Watch: Time to Buy Oil Again?

By Ulrik Simmelholt

Conclusions up front: – We agree with OPEC that the demand side seems to be doing decent; paper markets are net short oil again.
Our model is approaching the buy zone despite the recent weakness seen in Oil.
The big risk to our model is a supply increase from an exhausted Saudi Arabian one-man-army.

USD CPI Watch: The tricky path to 2% despite a soft report

Another CPI report, another preparation piece, where we as always share our thoughts on the coming report, what to expect next, and how far the Fed is from their all-important mandate of 2% inflation.
Main conclusions/notes upfront: 1) The path to 2% is tricky or almost impossible for the next 6 months.
CPI needs to average 0% MoM, which does not seem feasible.

EUROPOLITICS WATCH: Opposition Victory in Poland Opens Door for Ukraine in the EU?

By Anne Sandager

On Wednesday, the European Commission made a formal recommendation to start EU membership negotiations with Ukraine and Moldova.
Ukraine is thereby catching up to countries such as Montenegro, Serbia, and North Macedonia whose accession processes have been underway since the 00s.
Accepting Ukraine with a population of 43,79 million into the EU will be the end to the Union as we know it.

Energy Cable #46: Scholz to the rescue!

After moaning like it’s the beginning of the 00’s German industry has once again been lent a helping hand from the government and this could have a huge potential impact on global energy markets.
So let’s see what is up and down on the surface of the proposal.
First in order to help the very energy-intensive German industry the government has decided to decrease the taxes on electricity by a whopping 190% from almost 2 cents to 0.05 cents running into 2025.

Singapore Economics: Cost Pressures Warrant a Review of the Old Playbook

By Manu Bhaskaran

The fall in real wages despite apparent tightness in the labour market may be a symptom of the economy’s reliance on low-cost foreign labour to supplement its workforce.
Survey evidence points to renewed cost pressures for businesses seeking to retain and expand their workforce, while cost-of-living challenges continue to plague consumers.
These phenomena are the latest in a long-running trend of Singapore being increasingly costly for businesses and individuals. The policy playbook needs to be relooked at.

China Economics: Troubles Not Easily Solved by Beijing’s Support Measures

By Manu Bhaskaran

Beyond the cyclical downsides for trade, Chinese goods are also facing an increasingly hostile environment due to trade restrictions imposed by skeptical recipient markets.
Anaemic price growth suggests that demand has yet to mount a sustained recovery. Belt-tightening by consumers continues despite seasonal sales and aggressive discounting.
Beijing has expanded support for the property sector, but long-run inefficiencies may be deepened. Watch for the next party Plenum for further hints on Beijing’s policy agenda.

[TW2] The Week That Was in Markets in 11 Charts (W/E 11th Nov 2023)

By Srinidhi Raghavendra

US equities were on a tear last week. Asian equities were buoyant but less muted.
Commodity majors were on a retreat. Gold, Silver, Oil, and Copper retreated on geopolitical conflicts that appears to be contained.
SLOOS reported tighter standards and weaker demand for commercial and industrial loans to firms of all sizes over the third quarter.

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Nov 13

Daily Brief Macro: Steno Signals #73 – An Abysmal Impulse for 2024 and more

In today’s briefing:

Steno Signals #73 – An Abysmal Impulse for 2024
Extended Fed Policy Pause Puts Focus on US Equity-Bond Valuation Imbalance
Five Bullish Risk Reversals You May Have Missed
Will Narrow Leadership Unravel the ZBT Buy Signal?
Comment on Exchange Rate EUR/USD October 27, 2023

Steno Signals #73 – An Abysmal Impulse for 2024

Happy Sunday and welcome to our flagship editorial! As per usual we take you for a chart-heavy guided macro tour around major asset classes.
Conclusions up front: – The credit impulse for 2024 looks abysmal– Rates volatility is likely going to rise sharply again– Equities still look (too) expensive on most parameters – JPY and CNY trends to continue worsening– Oil bulls have less to cheer about than Nat Gas bulls
Momentum in 2023 saw a positive impulse from 1) lower input costs for production due to lower commodity and energy prices than in 2022 and 2) Easing financial conditions due to higher multiples and an easing momentum in rates.

Extended Fed Policy Pause Puts Focus on US Equity-Bond Valuation Imbalance

By Said Desaque

The US Treasury’s reliance on T-bill issuance has been embraced positively by risky assets, but any sustained rally will require the return of disinflation supported by economic fundamentals.
The arrival of positive real interest rates enhances the chances of disinflation returning, but Fed policy is on an extended holding period into 2024, notwithstanding the political calendar
Private sector imbalances in the US economy are not particularly large by historic standards. Financial asset valuation imbalances remain intact, notably a low equity risk premium versus Treasury bonds.

Five Bullish Risk Reversals You May Have Missed

We’re old enough to remember how the market was panicked about a U.S. recession and a rising term premium in the Treasury market.
Since then, a series of positive technical, macro and fundamental reversals have occurred to alleviate those concerns.
These reversals of an extremely bearish psychology are bullish for risk assets.

Will Narrow Leadership Unravel the ZBT Buy Signal?

By VRS (Valuation & Research Specialists)

The market action in the wake of the recent Zweig Breadth Thrust buy signal has been characterized by narrow leadership and poor breadth.
A historical analysis of market breadth shows that it can take two or more years of negative breadth divergences before a market tops out.
Today’s market conditions indicate that the current megacap growth leadership is not extended and can rise much further.

Comment on Exchange Rate EUR/USD October 27, 2023

During the period under consideration, i.e. September 27th – October 27th, 2023, the EUR/USD exchange rate fluctuated between 1.049 and 1.061 until October 22nd, 2023, but thereafter it followed an instantaneous daily uptrend on October 23 to finally secure the price of 1.0668.
However, at the finish of October, the Euro notched a slight drop, but it was still trading higher than the levels at the end of September.
According to Graph 1, during the first 18 trading days of the period under consideration, the pair showed a consolidation pattern mainly along the range of 1.05-1.0593 (except 2 sessions).

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Nov 12

Daily Brief Macro: The Weekly Market Monitor – China Makes History and more

In today’s briefing:

The Weekly Market Monitor – China Makes History, Nobody Likes US Debt, and a Massive Chart on Yields

The Weekly Market Monitor – China Makes History, Nobody Likes US Debt, and a Massive Chart on Yields

FDI into China turned negative. To explain why, we look at interest rate differentials, profitability, and ‘uninvestability.’ Meanwhile, the country has slipped into deflation again as it buys gold like there is no tomorrow.
US consumer credit is rolling over as the highest yields in decades take their toll. When credit growth stumbles, GDP growth will soon follow.
We look at key takeaways of the latest Fed SLOOS, the surprising decline in oil prices, our Fear & Frenzy Sentiment Index, and earnings surprises & stock market reactions.

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Nov 11

Daily Brief Macro: Do Not SNOOZE the SLOOS and more

In today’s briefing:

Do Not SNOOZE the SLOOS
Seasonality Watch: Why a Dec hike remains in play
Portfolio Watch: Staying Afloat in a Storm of Uncertainty

Do Not SNOOZE the SLOOS

Based on the correlation with the ISM Manufacturing Index, dismissing the SLOOS as a useless macro indicator is a bit too easy.
Even though lending standards did not tighten as much as the previous quarter, current levels point to elevated odds of a US recession.
SLOOS also confirms the start of a new default cycle, revealing that high-yield bond spreads are way too low, especially when the spread widening of CMBS is taken into account.

Seasonality Watch: Why a Dec hike remains in play