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”
Tag Archives: strategy
Ten Predictions for 2023
This year has been particularly difficult for most investors as there are few places to hide from inflation and rising cost of capital. Both equity and long-term bonds are down over 20% YTD, and even the value of cash is being eaten out by inflation, which rose as high as 9.1% y/y back in June.ContinueContinue reading “Ten Predictions for 2023“
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“
Macro Roadmap: Turning Point and Equity Rotation
Since early this year, we have been adamant in our view that the U.S. economy will decelerate rapidly this year amid the combination of the rise in the dollar, yields, and oil price, which all amount to a growth tax for the economy. There is little doubt that the manufacturing PMI surveys will show aContinueContinue reading “Macro Roadmap: Turning Point and Equity Rotation”
Equity Bear Market and Today’s Macro: The Good, The Bad, and The Ugly
The U.S. and global stock market have officially entered the bear market in June following upside surprises on U.S. inflation that was followed by the Fed having to raise its interest rate by 75bps – contrary to Chairman Powell’s comment that such size of hike is not on the table weeks earlier. Monetary conditions haveContinueContinue reading “Equity Bear Market and Today’s Macro: The Good, The Bad, and The Ugly”
Equity Market Riot: Have We Seen the Bottom?
monthly_202206_pcDownload There is no doubt that the correction in risk assets has always been a great opportunity for long term investors to further accumulate equity exposure. Investors could boost their return by gearing towards equity every time stocks fell by over 20%. The question is, how far are we from the bottom in current marketContinueContinue reading “Equity Market Riot: Have We Seen the Bottom?”
Can the Stock Market Handle Fed Tightening and Slowing Growth?
Download PDF: 202204_testing_timeDownload Three fundamental events have shaped the first quarter of 2022: Russian invasion of Ukraine, Federal Reserve’s hawkish monetary policy guidance and delivery of its first policy rate hike since the pandemic began, and greater reflationary efforts by Chinese authorities to stimulate growth. All these happened on the backdrop of a strong U.S.ContinueContinue reading “Can the Stock Market Handle Fed Tightening and Slowing Growth?”
Strength of the U.S. Economy and Implications of Russia’s Ukraine Invasion
Download PDF: 202203-thoughts-on-macro-and-equity-strategyDownload Three market moves have dominated the macro landscape in the past quarter amid the Fed tightening policy and geopolitical tension in Eastern Europe: rise in Treasury yields, strengthening dollar, and rally in oil prices. These all amount to a growth tax for consumers, which will inevitably lead to a growth slowdown inContinueContinue reading “Strength of the U.S. Economy and Implications of Russia’s Ukraine Invasion”
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