This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.
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1. Four Reasons To Be Tactically Bullish
- The U.S. stock market is poised for a period of continued strength.
- Four reasons to be tactically bullish on stocks: price momentum; a sentiment reset from bullish to caution; the historical bullish record of VIX spikes; and positive internals.
- We continue to favour non-Magnificent Seven leadership for the next bull phase.
2. Energy Cable: China is killing the commodity super cycle
- Take aways: Low margins and high stock levels mean that China will export its excess metal capacity. Other commodities like crude and its derivatives look weak as well. Gold only strong performing commodity in China due to domestic economic weakness .
- Welcome to this week’s energy cable with a focus on the economic troubles in China and its impact on commodity prices.
- This week’s piece will have a lot of charts, therefore we’ll keep the text short.
3. The Week at a Glance: The USD in the (Jackson) Hole amidst Over 1 Million Jobs Disappearing?
- Welcome to our weekly “The Week At A Glance” publication, where we explore the most important key figure releases and tradeable themes for the upcoming week.
- We remain almost exclusively long on USD fixed income, and therefore, our attention is particularly focused on two key developments this week:
- The Jackson Hole Conference and Ueda’s Appearance in the Japanese Parliament. Revisions to U.S. Employment Data: The Bureau of Labor Statistics (BLS) will release first-quarter 2024 data from the QCEW on August 21, 2024, at 10:00 a.m. (ET).
4. VIX Went Cray Cray
- Recent market disruptions, including a dramatic rally in the yen and a significant increase in the VIX, have raised concerns
- The convergence of US and Japan CPI rates may have contributed to the narrowing of Fed BoJ policy spread
- The VIX’s large move on August 5, 2019, has sparked concerns about the stability of the S&P options market and the potential impact on global risk levels
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
5. Emerging Markets: Structural Shifts as Allocations Stabilise Among Global Funds.
- Emerging Market allocations are stabilizing among active Global equity funds.
- Country-Level shifts show China & HK allocations more than halving since 2022, while Taiwan has seen strong gains. India becomes the top country underweight.
- Alibaba has declined to record lows, Tencent ownership is stabilizing, and TSMC has reached new highs.
6. BUY/SELL/HOLD: Hong Kong Stock Updates (August 21)
- Hong Kong market showed defensiveness during early August selloff and the overall breadth of the market continues to improve.
- J&T Global Express (1519 HK) received upgrades after reporting strong 2Q24 results. Its SEA and China business showed growth in revenue and profitability.
- Galaxy Entertainment Group (27 HK) received an upgrade after revenue and EBITDA approached pre-COVID levels. FIT Hon Teng (6088 HK) is seeing improvement in AI server, AirPod, and EV segments.
7. China Is One Step Closer to Its ‘Event Horizon” in the Property Market
- The latest policy proposal is one step closer but still incremental
- Incremental steps taken so far have been ineffective in the short-term
- The ideal solution would be full intervention by the Central Government
8. US Rates Strategy: July CPI, Jackson Hole, and Jittery markets
- Inflation rates are gradually slowing, with both headline and core inflation in line with expectations and at multi-year lows
- Housing prices showed more firming than expected, particularly in rental markets
- Markets are pricing in very soft core CPI inflation over the coming months, with expectations for gradual disinflation and a focus on wage growth by the Fed
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
9. Macro/Rates Watch: When the entire foundation rests on liquidity
- What a July we’ve had.
- The G3 central banks have now received plenty of labor market data that justifies cutting rates fairly aggressively.
- In our opinion, this is a tricky trend to resist, even if market pricing does admittedly seem aggressive.
10. Steno Signals #113 – Neither Inflation, Growth, Nor Liquidity is rising right now
- As most of you know, we remained upbeat on the cycle until around mid-July, as growth parameters continued to perform solidly in real-time, while inflation also posed a risk of re-acceleration.
- Our real-time tracking of the three main macro parameters is the cornerstone of our macro thinking, and through July and August, we have begun to observe a significant shift.
- The risk of rising inflation has collapsed, while growth momentum has also weakened substantially.
