In today’s briefing:
- Global Equity: Consensus Positioning
- Equity Market Expectations Ahead of FOMC Meeting
- How to Trade the Fed Whisperer Rally
- Global Supply Chains: Pressures Ease in 2022, but Geopolitical Forces Will Shape Their Future
Global Equity: Consensus Positioning
- We analyse our Global fund universe to find out the consensus overweight and underweight exposures, together with the consensus and under-owned stock holdings.
- Consensus overweights are led by Developed Europe, Health Care and countries in the EMEA region. On a stock level, Microsoft and Alphabet are the most widely held companies.
- Consensus underweights are led by Asia and selected industry groups such as Telcos and Banks. Raytheon Technologies and Al Rajhi Bank are among the most under-owned stock in the world.
Equity Market Expectations Ahead of FOMC Meeting
- Ahead of the upcoming FOMC, meeting, what is the equity market discounting? We conduct a factor and sector review for some answers.
- We find the market is starting to discount a cyclical rebound, but much depends on Fed policy.
- However, even if the Fed were to signal an imminent pause in rate hikes, that’s not necessarily very equity bullish.
How to Trade the Fed Whisperer Rally
- How should investors interpret the recent risk-on episode? We call it the Fed Whisperer rally.
- The S&P 500 continues to be inversely correlated to the USD Index, which is mainly driven by the expectations of a less hawkish Fed.
- Tactically, the S&P 500 may have more upside as it regained its 50 dma, which gives it a shot at its inverse head and shoulders measured objective of about 4120.
Global Supply Chains: Pressures Ease in 2022, but Geopolitical Forces Will Shape Their Future
- Hopes of ending China’s zero tolerance policy to COVID-19 were dashed by President Xi at the recent National Congress, thereby making further lockdowns and supply disruptions a distinct possibility.
- Based on data calculated by the New York Fed, stress on global supply chains has eased significantly in 2022, suggesting a reduction in price pressures for traded goods in 2023.
- Restrictions on technology transfers by the US could lead to the evolution of competing technological eco systems that will raise costs for Western companies wanting to do business with China.
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