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. 2025 High Conviction Idea: Gold
- Gold prices have staged multi-year breakouts in multiple currencies, indicating a long-term bullish outlook.
- In addition, gold is on the verge of staging relative breakouts against global equity markets that point to multi-year outperformance ahead.
- The U.S. macro outlook calls for a re-acceleration of inflation, which is also positive for gold.
2. Trump Watch: Possible U-Turn on Tariffs?
- Our Geopolitical team is wrapping up an analysis on the escalating Ukraine-Russia conflict.
- In the meantime, here’s a piece we believe markets might not yet be fully tuned into:With Donald Trump and Elon Musk seemingly forming a close alliance, their influence on trade and economic policies has become a hot topic.
- Notably, Vivek Ramaswamy and Musk have thrown their support behind Javier Milei’s economic strategy in Argentina, which includes radical measures such as aggressive spending cuts and a commitment to reducing trade barriers.
3. EM as an Asset Class 2024
- EM sovereign debt has seen significant changes since the pandemic, but no wave of defaults has occurred
- China’s debt numbers are higher than Europe’s for the first time, impacting the global market
- Sovereign debt restructuring remains a complex and idiosyncratic process, with challenges ahead for debt dynamics and growth in the EM market
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4. The Week at a Glance – The largest company about to report – fuel for the Nasdaq bet?
- Happy Monday! Welcome to our “Week at a Glance” series, where we highlight the key events and trends to watch for the week ahead.
- Monday:BOJ Ueda – Volatility IgnitedBank of Japan Governor Ueda’s remarks today set the stage for rising yen volatility, as he dodged giving markets a decisive signal on December’s rate hike prospects.
- With Ueda emphasizing data-dependency and the challenge of gauging the weak yen’s impact, traders are left grappling with a coin toss for December – keeping uncertainty alive.
5. Overseas Equity ETFs Surpass Domestic Equity ETFs For the First Time in 17 Years
- One of the biggest trends impacting the fund flow in Korea this year has been the huge capital inflow into overseas equity ETFs.
- The net asset value of the listed ETFs in Korea investing in overseas stocks surpassed the ETFs investing in domestic stocks for the first time in 17 years.
- The ETFs that invest in overseas stocks were 35.8 trillion won on 12 November 2024, up 111% from 12 January 2024.
6. Steno Signals #126 – Where did all the liquidity go?
- Happy Sunday, everyone! If you can’t show it in a meme, then it’s not true.
- That’s my modus operandi in the research business, and I stumbled upon this tremendous meme of the business cycle and how JPoww and his ilk respond to it.
- This has been the Fed’s operating model for a while: exaggerating the business cycle in both directions.
7. US Politics: “Liquid Gold”
- Donald Trump is committed to reducing energy prices by 50% within a year.
- However, uncontrollable factors may hinder this goal.
- As such, he may only achieve a modest success, if any.
8. Macro Regime Watch: An In-Depth Look at Regime Trends Across Major Markets
- Welcome back to Macro Regime Watch, where we dive into our nowcasting models to analyze Growth, Inflation, and Liquidity trends.
- Over recent months, we’ve dedicated substantial time to upgrading our models and refining the data we use.
- But the core question remains: how do we interpret the complexities of the macro environment, and how can these insights inform financial market strategies?
9. Major M&A Rule Changes Approved by the Korean Government
- On 19 November, the Financial Services Commission (FSC) announced major rule changes on corporate mergers and acquisitions have been approved by the Korean government.
- Revised rules have three specific goals: Improve rules on calculating and determining merger prices when M&As take place between nonaffiliated business entities, strengthen disclosure duties, and improve external evaluation system.
- If the Korean government is really serious about making positive rule changes, they need to apply these new laws not just for NON-AFFILIATED companies but more importantly for AFFIILATED companies.
10. Portfolio Watch: Stay Composed—The Trump Trade Is Still ON
- Happy Friday and welcome to our weekly Portfolio Watch.
- Many have been puzzled by the weakness in US markets towards the end of the week, with explanations largely pointing to an exhaustion of the Trump trade.
- This trade had been roaring across USD, USD bond yields, USD equities, and Crypto.
