In today’s briefing:
- North America Hits New Highs as Global Rotation Continues
- CX Daily: The Heated Fight Against Facial Recognition Scams
- BoE: Waiting for Broken Markets to Heal
- Commodities, Politics, and Mispriced Securities in Emerging Markets
North America Hits New Highs as Global Rotation Continues
- North American allocations continue to trend higher, hitting a record average weight of 58.1% across the 358 global funds in our analysis
- North America has consistently stolen market share from other key global regions, most notably Developed Market Europe, where average fund weights have hit all-time lows of 24.24%
- Sectors driving allocations higher are led by Energy, Health Care and Industrials with active rotation in to all 3, whilst Consumer Staples have seen signs of investor fatigue.
CX Daily: The Heated Fight Against Facial Recognition Scams
Cover Story: The heated fight against facial recognition scams
China foreign minister urges U.S. to clearly denounce Taiwan separatist activities
Chinese mainland students are flocking back to Hong Kong universities
BoE: Waiting for Broken Markets to Heal
- Markets puked after the new UK government announced its fiscal plans, and panic ensued. Sterling and rates remain at historically extreme levels.
- Rate rises are more than offsetting the inflationary effect of GBP devaluation, which suggests the BoE need not match hawkish pricing unless neutral rates have surged.
- We struggle to see the BoE massively exceeding the Fed’s tightening pace and extent. Contrarian trades are tough, but that is arguably why the current spread exists.
Commodities, Politics, and Mispriced Securities in Emerging Markets
- Commodity price gyrations and political black swan events will shape frontier and emerging equity markets during the next few years.
- 2022-2023 are the best years to selectively shop for attractive narratives, as normalization in commodity prices and geopolitical tensions is necessary in order to adopt a holistic bullish view of emerging market equities.
- If equity valuations move towards Post 2008 levels, then emerging market equities could be one of the most attractive buys of this decade by 2024 or later.
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