Daily Brief Macro: Portfolio Watch – What can we trade in this weak labor environment? and more

• What a crazy day (week), starting August off with a somewhat disastrous NFP report.
• Private sector jobs are trending down, government payrolls are trending down, while manufacturing and goods-producing jobs actually improved in July despite the recessionary ISM manufacturing report.
• This is a clue that the manufacturing sector is rebounding, as we have been alluding to, which is something that will likely become relevant for markets in the coming months.

• Welcome to our weekly “The Week At A Glance” publication, where we dig into the most important key figure releases and tradeable themes for the upcoming week.
• Everything is about assessing the USD economic cycle and the potential for rate cuts of the magnitude priced in after a crazy week last week.
• We ultimately have our doubts (especially as the labor market report on Friday was heavily impacted by the storm Beryl), but we are still waiting for potential triggers to bet on it.

• Happy Sunday! What a week, and what a few months we have ahead!
• To use the words of my friend Boris Kovacevic, “it’s like 2024 never happened.” Everything we learned about the re-acceleration of inflation in H1 and the “high for longer” narrative has just vanished into thin air over the course of a few days.
• While it is hard to disagree that a cutting cycle is commencing, it is still very much up in the air whether this is a normal cutting cycle.
• We spent last week examining returns in various asset classes around the commencement of cutting cycles, and the saddening truth is that it very much depends on the type of cycle.

• In this insight, we discuss strategies for outperformance amid market convulsions and downturn. 
• In particular, we highlight six reasons why it may be a wise move to position one’s portfolio more defensively (at least for the next several months).
• Warren Buffett slashed nearly half of his holdings in Apple, which was probably one of the main triggers of the tremendous market sell off in Asian markets on Monday.

• China’s state grid is increasing spending by 13% this year, which could boost sentiment in the copper sector
• Chinese steel rebar standards are changing, leading to concerns about obsolete inventories and potential pressure on steel prices
• India’s rising demand for metals, particularly in steel production, could have a significant impact on the global market by 2030

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• The July Nonfarm Payroll report showed only 114k jobs added, increasing the unemployment rate to 4.3%, the highest since 2021.
• The Sahm rule, a reliable recession indicator, was triggered with a current value of 0.53, signaling a potential recession on the horizon.
• FedWatch indicates a >90% probability of a 50 basis point rate cut in September, up from 10% last week, due to recession fears.

• The US oil and gas rig count declined by three to 586 for the week ending 02/Aug, following two consecutive weeks of increases. 
• The US oil rig count held steady at 482, after rising by 5 last week. Gas rigs decreased by three to 98, marking a second consecutive weekly decline.  
• In May, US crude oil production experienced its first monthly decline since January, while natural gas output dropped to its lowest level since February 2023. 

• The past week saw insights on Bank Central Asia (BBCA IJ), Thai Beverage (THBEV SP), Sheng Siong (SSG SP), and Delta Electronics Thailand (DELTA TB).
• There was also a macro insight on the Singapore economy from Manu Bhaskaran and a Thai banking sector post-results review from Victor Galliano with Krung Thai Bank as top pick.
• 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.

• A monthly review of how the markets and our themes are currently performing
• Analysing what went wrong and what went right in stocks and sectors
• Highlighting positions added or removed from the thematic investment portfolio

• Sajeet Pai, a VC at Bloom Ventures, provides insights on the Indian market, discussing unique features like low levels of debt and lack of trust.
• India’s massive population presents challenges and opportunities for investors, with a large segment of the population having low per capita income.
• Cultural differences, such as the prevalence of cash on delivery in e-commerce, highlight the need for a nuanced approach when entering the Indian market.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.