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.

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Global Economist, DeSaque Macro Research

Said Desaque

Global Economist

Macroeconomics

The subpar performance of the US economy during the current cycle has benefitted Wall Street by enabling a prolonged upswing in corporate profits, as well as reducing the risks of aggressive Fed tightening, by suppressing wage inflation and interest costs. The Fed has, however, reached its dual mandate, implying that continued economic growth has consequences for both monetary policy and financial markets.Some degree of US labour market slack still persists, but companies need to feel confident that higher fixed costs can be covered before any significant additional hiring. Meanwhile, although capacity utilisation may have receded from peak levels, mothballed capacity could be reducing the amount of effective safety buffer left in the capital stock.Monetary policy has been forced to do the heavy lifting to support aggregate demand during the current recovery, but intermediation to small businesses was complicated by the passage of the Frank-Dodd Act. Meanwhile, commercial &amp; industrial loan growth has weakened to its slowest since 2011, but this is unlikely to presage similar developments in the real economy.US equity valuations have risen since the US Presidential Election, but the low level of the Misery Index has been supportive for this outcome. Rising inflation remains the most credible source of valuation erosion, but the FOMC’s economic projections suggest a backdrop where future equity returns are driven by earnings growth. US equity investors should be paying attention to movements in the S&amp;P500 prospective P/E multiple, because this metric typically peaks ahead of stock prices during Fed tightening cycles.

The subpar performance of the US economy during the current cycle has benefitted Wall Street by enabling a prolonged upswing in corporate profits, as well as reducing the risks of aggressive Fed tightening, by suppressing wage inflation and interest costs. The Fed has, however, reached its dual mandate, implying that continued economic growth has consequences for both monetary policy and financial markets.Some degree of US labour market slack still persists, but companies need to feel confident that higher fixed costs can be covered before any significant additional hiring. Meanwhile, although capacity utilisation may have receded from peak levels, mothballed capacity could be reducing the amount of effective safety buffer left in the capital stock.Monetary policy has been forced to do the heavy lifting to support aggregate demand during the current recovery, but intermediation to small businesses was complicated by the passage of the Frank-Dodd Act. Meanwhile, commercial &amp; industrial loan growth has weakened to its slowest since 2011, but this is unlikely to presage similar developments in the real economy.US equity valuations have risen since the US Presidential Election, but the low level of the Misery Index has been supportive for this outcome. Rising inflation remains the most credible source of valuation erosion, but the FOMC’s economic projections suggest a backdrop where future equity returns are driven by earnings growth. US equity investors should be paying attention to movements in the S&amp;P500 prospective P/E multiple, because this metric typically peaks ahead of stock prices during Fed tightening cycles. 

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