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. Investment Strategy Under Upcoming US Rate Cut
- In face of the recent speeches by several FOMC members, we are changing or non-consensus view of no rate cut this year to one rate cut in September
- Under rate cuts, several asset classes such as real estate stocks, gold, and other safe haven currencies will rise.
- However, we still believe there will not be continuous series of rate cuts in the remainder of this year such that various asset classes listed above will only rise modestly.
2. Launch of Korea Value Up Index in September
- Korea Value-Up index is finally expected to be launched in September 2024 which is likely to include at least 100 companies in KOSPI and KOSDAQ.
- There are expectations that Korea’s Value Up index could resemble JPX Prime 150 index which is a Japanese version of the value up index launched last year.
- We provide 70 stocks in Korea that could be included in the Korea Value Up index. These 70 stocks could outperform the market in the next several months.
3. The Hang Seng Index Is at a Critical Juncture
- In the short-term, meaningful policy reforms needed out of the Third Plenum
- Chinese data continues to be lacklustre as expected while markets tread water
- What can we expect from the Third Plenum to galvanise the next stage
4. Equity Watch: The Trump versus Biden Basket
- We’ve received loads of feedback from our clients regarding our Trump versus Biden basket.
- As a result, we will provide a detailed breakdown of both baskets and explain the rationale behind each.
- We are updating the baskets regularly based on the political proposals of the two candidates.
5. Steno Signals #108 – A messianic Donald
- Happy Sunday from Copenhagen after the atrocious assassination attempt in Pennsylvania late Saturday.
- Trump was apparently struck by some fragments but managed to raise his fist and greet his supporters in a strong show of defiance as he was escorted off the stage.
- This incident will undoubtedly dominate the campaign in the coming days and weeks, transforming his appearance at the upcoming Republican Convention into a near-messianic event.
6. The Week At A Glance: Another inflation shocker in the UK paired with a rebound in US retail sales?
- Morning from Europe! Remember that we release our “Week at a glance” publication instead of the “Something for your Espresso” every Monday before lunch-time.
- Our aim is to digest the release calendar in an actionable way and assess the risk/reward around the macro themes in the context of the economic release calendar.
- This week, we will focus on the US consumer (Retail Sales), UK inflation (CPI) and the EUR rates (ECB meeting).
7. Technically Speaking: Breakouts & Breakdowns: HONG KONG (July 17)
- China State Construction International and Sinopec Engineering have short term reversal patterns indicating profit taking from recent advances.
- China Resources Cement reverses downtrend with volume indicating some near term gains after reporting that 1st half profit was under pressure.
- Yum China continues to show downward pressure given the increasing competition in the retail food segment, while Nongfu Spring collapses on news about the safety of its products.
8. Where US Stocks Are Heading Before Rate Cut
- To assess US equity direction before rate cut, we must first forecast the next rate cut. Our house forecasts that there will only be one rate cut during 2024.
- We believe S&P500, after hitting all-time high this week is due a 10% correction until the rate cut in September. Rate cuts are essential for S&P500 to tread new high.
- But we believe the rate cut is going to be one-off as the labor market remains bullish and inflation still comes off a tad higher than the Fed target.
9. China: Second Quarter 2024 GDP Growth
- China’s National Bureau of Statistics on Monday said the country’s second-quarter GDP rose by 4.7%.
- That’s slower than the 5.3% year-on-year GDP increase in the first quarter, and misses the 5.1% expectation.
- Retail sales for June missed expectations, while industrial production figures beat.
10. Great Game – Trump: Election or Coronation?
- We cover the Trump assassination attempt in other spaces, so in this we’ll focus on the political fallout and touch upon other relevant topics, including the Chinese Policy Plenary.
- Firstly some thought on Trump picking J.D. Vance as his running mate.
- As a staunch Trump supporter, Vance represents a more grassroots, anti-establishment figure compared to others like Nikki Haley.
