“At the 1971 G10 Rome meetings, during the Nixon administration, then-Treasury Secretary John Connally said to a group of European finance ministers, “The dollar is our currency, but it’s your problem.” Following a 25%+ rally since the low in October 2023, U.S. and global equity market finally saw the return of volatility and correction amongContinueContinue reading “The Unlikely Duo: Greenback Supremacy and Upturn for Base Metal Prices”
Tag Archives: investment
A Tale of Two Cities
It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, itContinueContinue reading “A Tale of Two Cities”
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?”
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”
Softer But Not Soft: 7 Top-of-mind Risks for 2024 and What to Do About It
It is only one month to go before 2023 official ended and the U.S. economy is turned out to be much more resilient than we previously thought at the beginning of the year. Consumer spending continues to be significantly above pre-pandemic trend, even after adjusting for inflation, and both unemployment rate and jobless claims remainContinueContinue reading “Softer But Not Soft: 7 Top-of-mind Risks for 2024 and What to Do About It”
The Big Picture: Economic Cycle and Market Mean-reversion
The structural decline in long-term yields since 1980 until the covid-19 pandemic had been accompanied by investors complaining that the search of attractive investment opportunities was becoming more difficult over time. The decline in borrowing cost also has a significant ramification for global investors, including boosting stock buyback amid lack of investment opportunities, breeding ofContinueContinue reading “The Big Picture: Economic Cycle and Market Mean-reversion”
Fundamentals vs Market Pricing
The combination of declining inflation and easing labor market condition has so far been interpreted by the market as signs that the U.S. economy will be able to stage a soft landing – a softening in growth without significant pick up in unemployment – before a new cycle begins. The equity market is disregarding theContinueContinue reading “Fundamentals vs Market Pricing”
Being Defensive: Early or Simply Wrong?
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?”
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”
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”
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