In today’s briefing:
- Asset Allocation Watch: Still early innings for US cyclicals?
- CX Daily: Are Chinese Solar Giants Flying Too Close to the Sun?
- Energy Watch: Can oil rally 25% further in Q4?
- The Energy Cable #36 – Will We Finally See Chinese Demand with the New Stimulus?
- The S&P 500 Index Needs a Macro Miracle!
Asset Allocation Watch: Still early innings for US cyclicals?
- Each month, we offer our best assessment of the current and coming month’s macroeconomic conditions and weigh risks against reward – using both our Macro Regime Indicator Framework in combination with the interactive Structural Asset Allocation Model.
- Coming into August, we wrote that: “We have (over the prior month) grown in confidence that the Manufacturing cycle is actually bouncing and that portfolios accordingly have to adjust.
- This month, we see 1) rising headline, but falling core inflation, 2) rising PMIs and 3) lower liquidity – the so-called ‘QT-regime’.”Looking ahead, we do not expect sudden shocks or changes to the current conditions.
CX Daily: Are Chinese Solar Giants Flying Too Close to the Sun?
- Solar /Cover Story: Are Chinese solar giants flying too close to the sun?
- ASEAN Summit /: Chinese Premier Li Qiang to visit Indonesia for ASEAN Summit
- Stocks /: China tightens oversight of program trading in stock market
Energy Watch: Can oil rally 25% further in Q4?
- Welcome to this short and sweet Energy Watch on the back of the Saudi/Russian decision to prolong cuts of supply through Q4.
- It leaves a smell of 2022 in the air and we note how the USD, bond yields AND energy/commodity prices move up in tandem.
- An odd cocktail, which can only happen, when Zars and Muftis are in charge of the supply/demand balance in global energy markets.
The Energy Cable #36 – Will We Finally See Chinese Demand with the New Stimulus?
- In this edition of your maverick energy/commodity newsletter from both sides of the pond, we discuss whether the Chinese stimulus will finally see demand picking up markedly in China and whether this could lead to Energy becoming THE consensus bet again.
- Let’s dive right in!
- Will we finally see Chinese demand with the new stimulus?
The S&P 500 Index Needs a Macro Miracle!
- Our simple regression analysis yields an S&P 500 Index estimate of 3,710, or 18% lower than the last closing price of 4,515 based on the latest ISM Manufacturing number.
- An ISM Manufacturing Index of 56.5., which means the economy must boom, starkly contrasting with the initial signs of a cooling labor market.
- If a ‘soft landing’ occurs, our S&P 500 estimate with an ISM of 52 equals 3,990, 12% lower than the current closing price.
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