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. Best Of: How Dubai is reshaping the global oil trade
- Correspondent Tom Wilson visited Fujairah, a booming port city in the UAE where oil trading has exploded in recent years
- Western sanctions on Russian oil exports have led to a redirection of global energy flows, with the UAE emerging as a major energy trading hub
- Switzerland has historically been a top location for commodity traders due to its banking secrecy and political neutrality, but the rise of UAE as an oil trading hub is shifting the balance of power in oil markets
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2. Tactical Trading – Time to Sell Japan Again
- Act II of the drama begins and continues from where it left off in early August
- Sentiment has changed – bad news really is bad news
- With >100 basis points of cuts already priced in before year end…
3. Corporate Value Up in Korea – Focus On Reducing Outstanding Shares and Comparison to M7
- In this insight, we compare the outstanding shares changes in the Korean stock market (KOSPI and KOSDAQ) relative to M7 (Magnificent 7) companies.
- In Korea, there are more companies such as Samsung C&T, KB Financial, and KT&G that are actively reducing their outstanding shares and investors are rewarding them with higher share prices.
- Top 10 companies in KOSPI that reduced their outstanding shares (from end of 2019 to 5 Sept 24) experienced average share price increase of 116% on average in this period.
4. Steno Signals #115 – The head-fake business cycle strikes again
- Happy Sunday from Copenhagen.
- Almost exactly a year ago, we wrote about the “roadmap to a recession” and how the market wrongly anticipated a near-term recession going into 2025.
- We also labeled the increasing re-inflation and manufacturing momentum a head-fake during the spring as the credit growth never truly supported a comeback to the most cyclical parts of the economy.
5. August Themes and Thematic Portfolio Review
- A monthly review of 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
6. JAPAN: No Lifeguard on Duty, Swim at Your Own Risk
- BOJ sows confusion with hawkish and dovish statements regarding its tightening policy. On a USD-basis the Japan market failed again to break its long-term resistance indicating a “Dead Cat Bounce”.
- Auto and Semiconductor sectors pressured by US trade policies and Trading Companies are affected by JPY strength. US rejection of Nippon Steel Corporation (5401 JP)merger affects Japan steel sector.
- Higher domestic yields is a catalyst to reverse the large money flows from Japan during the Kuroda years.
7. China’s Volatile Consumption Sector
- China consumption patterns are divergent; slowing and becoming more volatile at a sub sector level.
- Less certainty over new employment and wage growth, plus wealth worries over housing are some of the causes.
- We forecast GDP to slow in H2 and be 4.0% in 2025.
8. China Hard Landing Scenario
- We see a 30% probability of a harder landing in China GDP growth in 2025, which we most likely be in the 3-4% region but could persist into 2026.
- A large than projected slowdown in consumption would be a key concern, alongside persistently moderate negative deductions from residential investment.
- Negative inflation would only worsen this situation, while China authorities appear reluctant to go beyond targeted extra policy support towards aggressive action.
9. India GDP Review: A Bearish Start to FY25
- India’s GDP growth slowed to 6.7% yr/yr in Q1 FY25, falling short of expectations, as reduced public spending during the election period weighed on economic activity.
- Strong private consumption and investment provided some support, but a decline in manufacturing growth and weak external trade dampened overall momentum.
- Looking ahead, easing inflation, improved farm output, and a rebound in government spending are expected to drive growth in the coming quarters.
10. The Week At A Glance: No one trusts the July job report, but should they?
- Happy Labor Day! In this article, we are going to look into a feisty week of economic releases from the US economy given the backdrop of our nowcasting slowing considerably into September again.
- Our congestion based data has remained at muted growth levels, while the taxation data is starting to re-weaken, which is interesting into an otherwise strong tax season in September.
- Chart of the week: The Macro Environment is weakening in the US. Looking at the week ahead, we are on growth, liquidity, and inflation watch, especially focusing on the US.
