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In today’s briefing:
- Making a Drama Out of a Steel Crisis
- Saurabh Mukherjea: The Case for Investing in India – [Making Markets, EP.42]
- US Rates Strategy: July CPI, Jackson Hole, and Jittery markets
- Best Of: Is Japan At An Inflection Point?
- Copper Inventories Back at Pre-Covid Levels & Oil Demand Cuts Everywhere
- The Week at a Glance: The USD in the (Jackson) Hole amidst Over 1 Million Jobs Disappearing?
- Some Do, Some Don’t, Some Will, Some Won’t
- Steno Signals #113 – Neither Inflation, Growth, Nor Liquidity is rising right now
- Revisiting Peak Oil
- The Week That Was in ASEAN@Smartkarma – Sea Ltd, GoTo, Grab, and Comfort Delgro
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Making a Drama Out of a Steel Crisis
- China’s steel industry is facing significant challenges, including price drops, overcapacity, and government intervention
- Steel producers are preparing for potential consolidation and supply side reforms to address the industry crisis
- Iron ore prices have also been impacted by the challenges in the steel market, with expectations for lower Chinese imports and domestic output
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Saurabh Mukherjea: The Case for Investing in India – [Making Markets, EP.42]
- Guest is Saurabh Mukherjeeya, founder of Marcellus Investment Managers and advocate for investing in India
- Contrasts India and China, highlighting India’s better performance over the years
- Discusses the reasons behind India not receiving as much attention in terms of foreign investment compared to China, with recent shift towards investing in India
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US Rates Strategy: July CPI, Jackson Hole, and Jittery markets
- Inflation rates are gradually slowing, with both headline and core inflation in line with expectations and at multi-year lows
- Housing prices showed more firming than expected, particularly in rental markets
- Markets are pricing in very soft core CPI inflation over the coming months, with expectations for gradual disinflation and a focus on wage growth by the Fed
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
Best Of: Is Japan At An Inflection Point?
- Japan peaked in 1989, but then experienced decades of underperformance and false dawns in terms of economic growth and stock market valuations
- Recent changes in Japan, including increased inflation, wage growth, and more shareholder-friendly behavior from corporations, are leading to renewed optimism for investors
- Japan’s history of stagnation and deflation created risk-averse investors, but recent policies and efforts are turning the economy around, making it an exciting investment opportunity
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Copper Inventories Back at Pre-Covid Levels & Oil Demand Cuts Everywhere
- During last week, the International Energy Association (IEA) as well as OPEC both announced that demand for oil is slowing, revising down previous demand forecasts for the year and beyond.
- The world is seeing a major deceleration in oil demand growth led by China, with inventories set to rise next year even if OPEC+ were to postpone its plans to ease output cuts, the IEA stated.
- Meanwhile, the growth from the US won’t be able to offset the slowdown from China, according to the agency.
The Week at a Glance: The USD in the (Jackson) Hole amidst Over 1 Million Jobs Disappearing?
- Welcome to our weekly “The Week At A Glance” publication, where we explore the most important key figure releases and tradeable themes for the upcoming week.
- We remain almost exclusively long on USD fixed income, and therefore, our attention is particularly focused on two key developments this week:
- The Jackson Hole Conference and Ueda’s Appearance in the Japanese Parliament. Revisions to U.S. Employment Data: The Bureau of Labor Statistics (BLS) will release first-quarter 2024 data from the QCEW on August 21, 2024, at 10:00 a.m. (ET).
Some Do, Some Don’t, Some Will, Some Won’t
- Volatility continues to ease with US recession fears and Bank of Japan induced volatility fading
- Several central banks, including New Zealand and the Philippines, have joined the rate cut party, while Norway’s central bank kept rates unchanged
- US CPI report showed higher than expected inflation, particularly in rental and OER inflation, with expectations of continued growth at close to trend level in the US economy
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
Steno Signals #113 – Neither Inflation, Growth, Nor Liquidity is rising right now
- As most of you know, we remained upbeat on the cycle until around mid-July, as growth parameters continued to perform solidly in real-time, while inflation also posed a risk of re-acceleration.
- Our real-time tracking of the three main macro parameters is the cornerstone of our macro thinking, and through July and August, we have begun to observe a significant shift.
- The risk of rising inflation has collapsed, while growth momentum has also weakened substantially.
Revisiting Peak Oil
- There are notable differences in short-term prospects for oil demand.
- These differences become more pronounced when considering the timing of ‘peak oil’.
- ‘Peak oil’ refers to the hypothetical point at which global oil production will hit its maximum rate before declining.
The Week That Was in ASEAN@Smartkarma – Sea Ltd, GoTo, Grab, and Comfort Delgro
- The past week saw insights on Sea Ltd (SE US), GoTo Gojek Tokopedia (GOTO IJ), Grab Holdings (GRAB US), and Comfortdelgro Corp (CD SP).
- There were also macro insights on Indonesia from Manu Bhaskaran and on the Philippines, as well as the CrossASEAN Ground Zero and an SET Index Rebalance Insight from Brian Freitas.
- 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.