One valuable suggestion my former boss gave me when I started writing macro research note was to imagine myself standing one year in the future, looking back to the events that have transpired since and asking yourself if it should have been more obvious. The regional banking crisis back in March is one of thoseContinueContinue reading “Being Defensive: Early or Simply Wrong?”
Category Archives: Investment Management
Into the Wild: The Known Unknowns
“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so” – Mark Twain I think the quote above sums up beautifully the blind spot we and other strategists may have amid the current late phase of the business cycle. After all, few, if any,ContinueContinue reading “Into the Wild: The Known Unknowns”
Bank Failure Is Only One of Many Symptoms of Tight Monetary Conditions
When I was working as a junior doctor many years ago, one of my professors always stresses the importance of determining the cause (etiology) of a disease rather than simply alleviating the patient’s symptoms. The collapse of SVB in March and the associated ripples to other regional banks are one of the many symptoms ofContinueContinue reading “Bank Failure Is Only One of Many Symptoms of Tight Monetary Conditions”
Gradually, Then Suddenly: Beware of the Lag Impact of Policy Tightening
Green shoots in the economic data and the associated change in market narrative from hard landing six months ago to no landing currently have bolstered the performance of equities and pushed bond yields to near previous highs. January’s retail sales number shows consumers in the U.S. spent 3% more relative to in December, outpacing analysts’ContinueContinue reading “Gradually, Then Suddenly: Beware of the Lag Impact of Policy Tightening”
Evidence, Dear Boy, Evidence
The resilience of the U.S. equity market despite falling fundamentals have continued to puzzle investors expecting lower stock prices. The S&P 500 has rallied 14% from its recent bottom in October, consumer discretionary has been outperforming staples for the past two months and sell-side analysts are sounding more bullish – with some pointing to theContinueContinue reading “Evidence, Dear Boy, Evidence”
Bracing for an Economic Winter
The week between Christmas and New Year last year was exceptionally cold, with snowstorms in both the Eastern and Western Coast of Canada and the U.S. Many flights were cancelled and those that managed to land at their destination, including the one that I was in, experienced heavy turbulence. The exceptionally cold winter this yearContinueContinue reading “Bracing for an Economic Winter”
End of Year Recap: 2022 in a Rearview Mirror
December has always been a good month to reflect on what happened over the past year and set goals for the next. Although this year has been painful for most investors, in hindsight it was only logical that the above-potential growth seen following the pandemic could not last forever and the frothy valuations of bothContinueContinue reading “End of Year Recap: 2022 in a Rearview Mirror”
An Update on Equity Sector
Market has been trading lower since mid-August peak and we are revisiting our recommendation on sectors given the sharp moves in cyclical and defensives of late. Below are our sector view with a brief rationale and supporting charts. Healthcare: Overweigh (2-4%) Pro: uncorrelated to the cycle and historically outperformed due to earnings resilience during downturn.ContinueContinue reading “An Update on Equity Sector“
The Making of An Accident, Brace for Impact
It was four decades ago when Federal Reserve last tighten monetary policy in a comparable speed and size to what we are seeing today. This is not surprising as it was also the last time the U.S. saw headline CPI inflation above 8% (Chart 1). Although the Fed was successful in bringing down inflation andContinueContinue reading “The Making of An Accident, Brace for Impact”
Show Me the Data: Equity Outlook Through Growth and Liquidity Lenses
Sentiment and technical analysts are bullish. Fundamental and macro analysts are bearish. This captured the tone among the sell-side research I read in the past three weeks. The equity market 15%+ bounce from mid-June low has made several strategists turned bullish on risk assets, believing that we have seen the low of the cycle. TheContinueContinue reading “Show Me the Data: Equity Outlook Through Growth and Liquidity Lenses“
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