In today’s briefing:
- Why You Should Fade the NASDAQ Surge
- Macro Strategy– Has Global Liquidity (And the Equity Market) Bottomed Already?
- Cautious Signs of a Bullish Revival
Why You Should Fade the NASDAQ Surge
- The recent market rally has been led by a resurgence in large-cap NASDAQ stocks
- This leadership has become overly extended, as evidenced by the rising divergence between their relative performance and the 10-year Treasury yield.
- A detailed factor and sector performance analysis reveals an underlying trend in favor of cyclical exposure.
Macro Strategy– Has Global Liquidity (And the Equity Market) Bottomed Already?
- Liquidity trends are RAPIDLY on the rise in China and Japan in contrast to the West
- Global liquidity probably bottomed in November unless BoJ turns around soon
- The PBoC is currently helping global equities perform via new liquidity/credit
Cautious Signs of a Bullish Revival
- The signs of a bullish revival are becoming more evident in both the sentiment and technical data.
- However, forward P/E valuations are elevated and fundamental risk is rising.
- The market is also extended in the short run and may be in need of a corrective or consolidation period.
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