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. Portfolio Watch: What if We Add a Rate Cut to This Fire..
- The cyclical rotation is slowly but slowly rolling and if central banks add rate cuts to this mix, we are staring directly into the melt up.
- Welcome to our weekly Portfolio Watch, where we assess the tradeable themes and discuss our portfolio composition.
- In this revamped version of the series, we will touch upon the developments in our Macro Alpha Portfolio and our Digital Assets Portfolio.
2. 3 Take-Aways from Li Qiang’s Speech
- Welcome to this week’s Great Game where we turn our attention to China.
- The Communist Party is annual National People’s Congress where Premier Li Qiang (Xi’s right hand man) delivered a very noteworthy speech on the Central Committee’s financial and political plans.
- Watching a speech from a Chinese politician is a very different beast from watching top US politicians address the masses.
3. February Themes and Thematic Portfolio Review
- A monthly review at how the markets and our themes are currently performing
- Analysing what went wrong and what went right in stocks and sectors
- Highlighting positions added or removed from the thematic investment portfolio
4. Positioning Watch – Are the unpopular bets back in town?
- Hello everyone, and welcome back to our weekly positioning watch! Equity markets continue their drift higher for yet another week, and it seems safe to say that markets are now more concerned about liquidity/growth than rates to reiterate ourselves, as equity markets have not attributed the U-turn in rates expectations any value whatsoever.
- As the growth and liquidity outlook still looks decent for the weeks/months ahead, we keep our long risk asset bias.
- The rates outlook looks to have a bigger impact in FX and especially the carry-heavy side of this asset class, and with the market likely going to up-hawk expectations even further if inflation picks up momentum, it could be time for a revival of the USD – FX volatility has at least started to pick up a bit of momentum (bullish USD).
5. Macro Regime Indicator: MORE liquidity is coming
- Greetings and welcome to this month’s Macro Regime Indicator.
- Financial markets have behaved pretty much just as we laid out in last month’s predictions.
- Sentiment remains strong and the US consumer continues to spend.
6. Nowcasting Nearly Half of Global GDP
- My hybrid nowcasting framework tracks the inflation-adjusted or real GDP growth rates of US, Euro Area and Japan
- My nowcasts for the individual G3 economies are prospectively diverging at the beginning of 2024
- But in aggregate, my nowcast suggests that G3 GDP growth is potentially tracking softer through the first-half of 2024 on average
7. How to Trade the YOLO and FOMO Market
- A YOLO and FOMO mania has gripped stock market psychology and it’s unclear when the mindset will reverse. Numerous warnings are appearing and the market can correct at any time.
- We are long-term bullish on stocks, but remain cautious near term.
- Despite our cautious short-term outlook, traders are advised against taking a short position until some tangible signs of a bearish reversal appear.
8. Monday Macro – a deep dive into stocks and bonds for the long run
- This week, I’m going to try and combine my three interests: 1. working out what the heck markets might do next,
- 2. figuring out how economic growth rates impact stock market returns (surely there must be some relationship or are they entirely unrelated), and
- 3. digging into the economic history record books to see what’s worked in the past in investment terms.
9. Are You Ready To Be A Contrarian Cigar Butt Investor?
- We review Warren Buffett’s shareholder letter and his pivot from deep value to QGARP investing.
- We offered two case studies to compare and contrast his approach: 1) Berkshire’s holdings in Japan, which was successful; and 2) China, a deep value opportunity that he ignored.
- We are agnostic in our opinion between the two approaches and believe both can offer alpha, but on different time horizons.
10. Commodity & Shipping Watch: Time to get back into the shipping bets?
- Negative roll yield killing BCOM returns, even as spot has performed OK
- We need to see some serious stimulus out of China for broad commodities to rally
- Macro data turning bullish in shipping and the Container output from Shanghai is showing signs of a STRONG rebound
