One of the themes that could be observed in both the global equity and bond market is the convergence between U.S. and the rest of the world. Following two years of strong U.S. economy and weak growth in the rest of the world, we have seen U.S. exceptionalism start to diminish amid continued softening inContinueContinue reading “Global Growth Convergence in the Making (Part II)”
Tag Archives: business cycle
Zeitenwende (Turning Point): Improving RoW, Tariffs Implication and Equity Strategy
Olaf Scholz, the current Chancellor of Germany, delivered his “Zeitenwende” speech on 27th February 2022, following Russian invasion of Ukraine three days earlier, describing the event as a historic turning point for the country and took the opportunity to announce EUR 100 billion fund for German military spending – reversing the country’s lackluster defense spendingContinueContinue reading “Zeitenwende (Turning Point): Improving RoW, Tariffs Implication and Equity Strategy”
2025: On Top of Mind
With the benefit of hindsight, 2024 turned out to be a much better year for investors compared to the relatively downbeat expectations earlier in the year. The U.S. stock market continued to roar, delivering 20%+ return, following a 22% return in 2023. Meanwhile, returns for fixed income also turned positive as global central banks startedContinueContinue reading “2025: On Top of Mind”
All The Data in the World: Potential Recovery in Industrial Sector Amid Slowdown in Consumer Spending
One of the common problems being a macro strategist is being accused of cherry-picking data to fit whatever narrative one is conveying at the time. Over the past two years, those with more negative view of the U.S. economy pointed to the depressing figures out of the industrial and cyclical sectors, while those with moreContinueContinue reading “All The Data in the World: Potential Recovery in Industrial Sector Amid Slowdown in Consumer Spending”
Should The Fed Cut Policy Rate If U.S. Growth Remains Strong?
Exceptional U.S. growth continues to be seen in the last quarter of 2023 and beginning of this year, with Q4/23 reading shows the U.S. economy expanding 0.8% q/q (3.2% annualized), slightly higher than the 2% trend growth observed over the past two decades, while the rest of the world lagging. The Euro Area, Canada, andContinueContinue reading “Should The Fed Cut Policy Rate If U.S. Growth Remains Strong?”
Update on Equity Sector Outlook
The U.S. economy continues to show economic resilience, with GDP expanding 0.8% q/q (3.2% annualized) in the final quarter of 2023. It appears that resilience continues into the new year with the Atlanta Fed GDPNow currently pointing to a 2.8% q/q (annualized) expansion for the first quarter. In addition, ISM Manufacturing and Services PMI mayContinueContinue reading “Update on Equity Sector Outlook”
The Landing: View from the Cockpit
Two years ago, when inflation started to accelerate across the developed world and central banks were expected to hike policy rates, global macro strategists saw dark clouds on the horizon that the global economy will have to pass through. The last time inflation went out of control was in the late 1970’s, which coincided withContinueContinue reading “The Landing: View from the Cockpit”
Cyclical/Defensive Stocks Are Pointing to a Bottom in Manufacturing Activities. Are We Entering a New Cycle?
In June Bank of Canada unexpectedly raise its policy rate by 25 bps, defying the expectations that Canadian policymakers are done with their rate-hiking campaign. Investors learned that after a well-telegraphed “pause” central banks could again tighten the screw. Yields across the developed world surged following the BoC’s decision. Meanwhile, in the U.S. Fed ChairmanContinueContinue reading “Cyclical/Defensive Stocks Are Pointing to a Bottom in Manufacturing Activities. Are We Entering a New Cycle?”
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”
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”
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