Delivering Global Macro Investment Insights

DeSaque Macro Research

DeSaque Macro Research Limited was formed by Said DeSaque in April 2012 with the view to delivering global macro investment insights aimed at providing new ideas to clients.

Said DeSaque has over 26 years of experience working as a professional economist in financial services. Prior to establishing DeSaque Macro Research, Said held positions as Senior Economist at Robert W Baird and William Blair. He began his career as a graduate at PaineWebber in 1986, where he eventually became Head of the London Economics Department.

Said takes a very keen interest in international relations, along with their implications for economic development. His research interests include the economic transformation of China and its implications for global capital markets, particularly in the United States. He is a member of Chatham House in London.

The US economy and capital markets have historically been Said’s main focus of attention. He frequently presents his views to institutional investors in diverse geographic locations. In recent years, Said has also been carefully monitoring economic developments in Asia, particularly China and Japan.

US Companies Preserve Profit Margins Via Higher Prices to Avoid Repeat of 2000-2003 Environment

Lack of Labour Market Slack and Preserving High Operating Margins Precludes Fed Policy Pivot

Supply-Side Developments Raise the Spectre of Structurally Higher Inflation

Global Economist, DeSaque Macro Research

Said Desaque

Global Economist

Cross Asset Strategy

<ul>
<li>Rising US inflation since 2021 H2 has not produced the same prolific P/E multiple compression witnessed in the 1970s,  based on the premise that higher inflation will not be protracted.</li>
<li>Since the end of the last recession, companies have resorted to price increases to preserve operating margins, thereby generating economy-wide inflation and some downward pressure on P/E multiples.</li>
<li>Sticky US inflation raises the spectre of equity returns being earnings-driven, while only those companies enjoying positive real earnings growth will be considered for higher valuations.</li>
</ul>


Rising US inflation since 2021 H2 has not produced the same prolific P/E multiple compression witnessed in the 1970s,  based on the premise that higher inflation will not be protracted.
Since the end of the last recession, companies have resorted to price increases to preserve operating margins, thereby generating economy-wide inflation and some downward pressure on P/E multiples.
Sticky US inflation raises the spectre of equity returns being earnings-driven, while only those companies enjoying positive real earnings growth will be considered for higher valuations.


Efforts to Preserve Operating Margins Produce Inflation and US Equity Valuation Concerns