In today’s briefing:
- S&P 500 Vulnerable to a Setback
- The Eventual Shift in Fed Policy: When & By How Much?
- A Point and Figure Tour Around the World
- CX Daily: Why China’s Efforts to Juice Stocks Typically Don’t Last
- Services Week: Will Services now turn into the weakest link of the economy?
- Macro Nugget: 3 Charts on US Labour market
- The Week That Was in ASEAN@Smartkarma – Bank Rakyat Executing, Avia Avian, and Thai Politics
- Great Game – Biden on charm offensive
S&P 500 Vulnerable to a Setback
- About two weeks ago, we highlighted the severe oversold nature of the stock market and suggested that it was poised for a relief rally.
- The relief rally duly arrived, and a week ago we set out a number of tripwires for traders to take profits on the tactical rally.
- The rally is unlikely to continue. The S&P 500 should find strong support in the 4200–4300 zone should the market correct from current levels.
The Eventual Shift in Fed Policy: When & By How Much?
- The Fed policy debate, while ongoing, has become increasingly intricate
- But an extended history of almost 100 years offers clues on the future rate path
- Ballparking the likely timing and extent of the eventual rate cut cycle
A Point and Figure Tour Around the World
- Sometimes it’s useful to step back and look at the big picture by ignoring the squiggles of the market. One useful technique is the point and figure chart.
- Our point and figure tour tells a story of a global cyclical recovery, which should be equity bullish.
- Notwithstanding the P&F analysis, a contrarian analysis of China suggests that it is poised for a cyclical recovery.
CX Daily: Why China’s Efforts to Juice Stocks Typically Don’t Last
- Stocks / Caixin Explains: Why China’s efforts to juice stocks typically don’t last
- China-U.K. /: China-U.K. thaw continues as top officials confer in Beijing
- Green /: China, Europe and the U.S. have broad prospects for climate cooperation, top climate envoy says
Services Week: Will Services now turn into the weakest link of the economy?
- We highlighted, analyzed and traded the Manufacturing bottom during the early parts of July during our Business Cycle Week, which proved to be a very well-timed rotational call.
- The spread between Manufacturing and Services is highly cyclical and driven largely by relative changes in the cost and input structure of companies.
- Our thesis is currently that the shift in input cost structures will start to favour Manufacturing over Services in coming quarters, also as goods prices have started to come down, making them relatively cheaper to services from a consumption standpoint.
Macro Nugget: 3 Charts on US Labour market
- As you may be aware, a notable abundance of indicators suggests increased credit stress and layoffs.
- One of the particularly consistent signals in my chart book is the Conference Board’s Jobs hard-to-get Less Plentiful, which consistently has been leading the unemployment rate
- The ongoing accumulation of recent revisions also serves as a signal of potential turbulence in the labor market, possibly indicating forthcoming challenges in the upcoming months.
The Week That Was in ASEAN@Smartkarma – Bank Rakyat Executing, Avia Avian, and Thai Politics
- The past week saw in insights published on Bank Rakyat Indonesia, PT Avia Avian, Ultrajaya Milk, Telekomunikasi Indonesia, Vinagame IPO, and a Digital Core REIT/Keppel DC REIT pair trade.
- There were also macro insights looking at Thai political situation, and an insight looking at a more positive outlook for the Philippines, which investors remain dramatically underweight.
- 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 South East Asia.
Great Game – Biden on charm offensive
- Welcome to this week’s edition of the Great Game.
- This week, all eyes are on Asia with a series of high-level summits taking place across the continent.
- Both U.S. President Joe Biden and VP Kamala Harris will be flying out to attend in person, but what’s at stake and what are they trying to accomplish?
💡 Before it’s here, it’s on Smartkarma
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