In today’s briefing:
- Out of the Box #12: What if the deacceleration of EZ inflation starts to outpace that of the US?
- Equities Watch: Today’s Philly Fed Figures Make For Bullish Reading
- CX Daily: Why Temasek Is Steering Clear of China’s Generative AI Stock Frenzy for Now
- Commodity Watch – A rebound in the most cyclical asset class?
- Portfolio Watch: Timing the Beta Exit
Out of the Box #12: What if the deacceleration of EZ inflation starts to outpace that of the US?
- With the disinflation narrative starting to catch momentum, a long-awaited process that we have anticipated would kick in late Q1 or early Q2, we are back on track for a global economic cooldown.
- Central bankers are slowly but surely conceding to inflation being the last war and as they shift their primary focus shifts toward keeping the bottom up on the economy and avoiding the nasty R-word to spread.
- Recently Knot in ECB has turned his back on the hawk line which is the first step toward an actual pivot as hardliners need to cede ground to the doves in the council:Chart 1: ECB Governing Council: Knot moving toward Center, more to follow?
Equities Watch: Today’s Philly Fed Figures Make For Bullish Reading
- Welcome to this fourth release in our “Business Cycle Week”, where, besides addressing the just released Philadelphia Fed Manufacturing Survey, we’ll probe the probability for a cyclical rebound and assess the implications for equities in particular.
- Take away: Divergence in soft and hard data has scared the outlook for earnings in US industrials the most. Equity betas to soft and hard data show an interesting discrepancy. Long US industrials vs short German industrials look interesting here. 2 reasons for PMI bullishness, 2 reasons for PMI bearishness.
- This week has been all about our ‘business cycle week’ here at Steno Research and for this one we’ll zoom in on both soft and hard data from the manufacturing sector and put it into an equity perspective.
CX Daily: Why Temasek Is Steering Clear of China’s Generative AI Stock Frenzy for Now
- Temasek /: Why Temasek is steering clear of China’s generative AI stock frenzy for now
- Kissinger /: Xi praises Kissinger’s ‘historic contribution’ to U.S.-China ties
- Private /: China vows to create a ‘bigger, better, and stronger’ private sector
Commodity Watch – A rebound in the most cyclical asset class?
- Welcome to the final series of our “Business Cycle Week”, where we cover how a possible rebound in manufacturing might affect asset markets, and if markets are already starting to position for it.
- Commodities is the only asset class we need to tick off, and what a way to end the business cycle week with the most cyclical asset of them all, looking to benefit the most from a rebound in manufacturing.
- Commodities have had a rough 2022 (and start of 2023) as USD strength and a lack of Chinese demand have held commodities prices down, despite the scarcity that characterizes the market currently.
Portfolio Watch: Timing the Beta Exit
- Hello Everyone and welcome back to our weekly Portfolio Watch! Quite an interesting week here leading up to central bank decisions and as per usual we will be all over it.
- Goldilocks data keeps coming in but we fear markets may be a bit stretched on risk appetite, and as a result, we have closed our AI FOMO trade today.
- Besides getting out of the AI we have entered a Commodity long, taken profits on USDCNY long, and added a UST steepener.
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