Cross-Asset Strategist & Quantitative Analyst, Pennock Idea Hub

Cam Hui

Cross-Asset Strategist & Quantitative Analyst

Pennock Idea Hub

We are creators of independent equity research. The Pennock Idea Hub team are veterans of the investment industry. Much of our team has spent their careers at Merrill Lynch, Deutsche Bank, RBC Capital Markets and Wood Gundy. We have taken every aspect of research back to the studs and returned to first principles. The Pennock Idea Hub marries the interests of the sell and buy side. 

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Cross-Asset & Quantitative Research

Cross Asset Strategy

<ul>
<li>Gold prices have staged multi-year breakouts in multiple currencies, indicating a long-term bullish outlook.</li>
<li>In addition, gold is on the verge of staging relative breakouts against global equity markets that point to multi-year outperformance ahead.</li>
<li>The U.S. macro outlook calls for a re-acceleration of inflation, which is also positive for gold.</li>
</ul>


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.


<ul>
<li>U.S. equities have surged in the wake of Trump’s electoral victory while stock markets in the rest of the world have been flat to down.</li>
<li>While the combination of narrowing global leadership and elevated U.S. valuation are concerns, we remain cautious but not bearish on the U.S. and global equity markets.</li>
<li>Fundamental and macro momentum are strong, and there are no signs of reversal in funding costs.</li>
</ul>


U.S. equities have surged in the wake of Trump’s electoral victory while stock markets in the rest of the world have been flat to down.
While the combination of narrowing global leadership and elevated U.S. valuation are concerns, we remain cautious but not bearish on the U.S. and global equity markets.
Fundamental and macro momentum are strong, and there are no signs of reversal in funding costs.


<ul>
<li>We expect the stock market to rally into January, driven by corporate tax cut expectations, FOMO performance chasing and buybacks as the post-earnings season window re-opens.</li>
<li>Expect stock prices to consolidate or pull back just before Inauguration Day.</li>
<li>That’s when many of the unknowns of the Trump Administration’s initiatives will be better defined.</li>
</ul>


We expect the stock market to rally into January, driven by corporate tax cut expectations, FOMO performance chasing and buybacks as the post-earnings season window re-opens.
Expect stock prices to consolidate or pull back just before Inauguration Day.
That’s when many of the unknowns of the Trump Administration’s initiatives will be better defined.


<ul>
<li>The probable withdrawal of U.S. security guarantees will be a paradigm shift in the post-World War II geopolitical architecture of the world.</li>
<li>How it aligns itself in the coming years would have a seismic effect on its foreign and trade policy that could last for generations.</li>
<li>While the European growth outlook may appear anemic, investors who seek European equity exposure should consider peripheral Europe and financial stocks as sources of growth.</li>
</ul>


The probable withdrawal of U.S. security guarantees will be a paradigm shift in the post-World War II geopolitical architecture of the world.
How it aligns itself in the coming years would have a seismic effect on its foreign and trade policy that could last for generations.
While the European growth outlook may appear anemic, investors who seek European equity exposure should consider peripheral Europe and financial stocks as sources of growth.


<ul>
<li>Even though the odds of slightly narrowed, the market continues to discount the chances of a Trump victory.</li>
<li>Our base case calls of a Trump win for higher inflation, higher rates and an equity bull.</li>
<li>However, investors should be aware of high levels of tail-risk from Trump’s policies</li>
</ul>


Even though the odds of slightly narrowed, the market continues to discount the chances of a Trump victory.
Our base case calls of a Trump win for higher inflation, higher rates and an equity bull.
However, investors should be aware of high levels of tail-risk from Trump’s policies


A Final Update on the Trump Trade: Tail-Risk Assessment

Cam Hui has been professionally involved in the financial markets since 1985 in a variety of roles, both as a quantitative equity portfolio manager and as a sell-side analyst. He graduated with a degree in Computer Science from the University of British Columbia in 1980 and obtained his CFA Charter in 1989.