In today’s briefing:
- How To Time The Recession Market Bottom
- Sentiment: This Time Is Different
- India: Value/Growth Divide Hits New Peak Among GEM Funds.
- Chile: Political Change Spurs Investor Return
How To Time The Recession Market Bottom
- Recession fears have arrived on Main Street. Google searches for “recession” have spiked and anecdotal evidence indicates that recession talk has hit the party circuit.
- Recession modeling depends on several moving parts, namely inflation, the supply chain effects of the war and war-related sanctions, as well as the Chinese zero-COVID lockdown and Fed policy.
- While the jury is still out on a recession call, we also offer two rough guideposts to a market bottom should a recession develop.
Sentiment: This Time Is Different
- AAII and Investors Intelligence surveys have become extremely bearish, which should be contrarian bullish, but we interpret the surveys as the bulls have capitulated but the bears haven’t.
- Investment-Oriented accounts should be positioned cautiously and take advantage of rallies to raise cash.
- Trading accounts should be aware that the market is short-term oversold and poised for a relief rally in the context of a downtrend.
India: Value/Growth Divide Hits New Peak Among GEM Funds.
- The difference in Indian exposures between Value and Aggressive Growth managers hits record wides of +10.5%.
- Value managers are increasing underweights, with today’s level of -5.52% below benchmark the lowest on record. Key underweights are Reliance Industries, Infosys, HDFC Limited, Bajaj Finance and Bharti Airtel
- For Aggressive Growth funds, Infosys was a key driver behind the recent spike in exposure, with 8.6% of funds buying in to the stock and average weights increasing by +0.42%.
Chile: Political Change Spurs Investor Return
- After a decade long decline in Chilean allocations that stretched the entire twenty-tens, investment levels in Chile have started to reverse course.
- The shift in ownership among active managers confirms how a favorable and stable political environment can directly feed through to increased investment in a region.
- Active GEM managers have been buying Soc Quimica Y Minera Chile-B, Cencosud SA (CENCOSUD CI) and Empresas Copec Sa.
Before it’s here, it’s on Smartkarma
