Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Macroeconomics

<ul>
<li>Fed chair Powell pledged at Jackson Hole to "keep at it until the job is done". After M2 growth averaging 18.2%YoY in Mar'20-Feb'22, much more monetary tightening is still needed. </li>
<li>The Fed Funds rate will rise to 3% next month, 3.5% by end-year and 4% by Mar'23. The consequence will be recession by Q1CY24, as telegraphed by the yield-curve. </li>
<li>Biden's two legislative wins this month will boost the economy (especially manufacturing), aid the climate fight and lower drug costs in the medium-term. But their net fiscal impact is minimal.</li>
</ul>


Fed chair Powell pledged at Jackson Hole to "keep at it until the job is done". After M2 growth averaging 18.2%YoY in Mar'20-Feb'22, much more monetary tightening is still needed. 
The Fed Funds rate will rise to 3% next month, 3.5% by end-year and 4% by Mar'23. The consequence will be recession by Q1CY24, as telegraphed by the yield-curve. 
Biden's two legislative wins this month will boost the economy (especially manufacturing), aid the climate fight and lower drug costs in the medium-term. But their net fiscal impact is minimal.


Biden's Legislative Wins Provide a Boost to Growth, but Recession Still Inevitable

Founder & Chief Market Strategist - SAV Markets, SAV Markets

Shyam Devani

Founder & Chief Market Strategist - SAV Markets

Provide Comprehensive Analysis & Commentary

SAV Markets

SAV Markets aims to provide comprehensive analysis & commentary on foreign exchange and asset markets. The approach is multi asset as markets are typically interlinked. Cause and effect are always at work, even if those effects take time to manifest. As nothing is permanent we strive to get ahead of the curve in an ever changing world.

Cross Asset Strategy

<ul>
<li>This chart said stocks would fall at the start of this year</li>
<li>It now says we should step back from being too bearish</li>
<li>I am not going to ignore it at this juncture. Here we look at possible reasons why the stock market may see some relief</li>
</ul>


This chart said stocks would fall at the start of this year
It now says we should step back from being too bearish
I am not going to ignore it at this juncture. Here we look at possible reasons why the stock market may see some relief


<ul>
<li>Brent Crude is approaching important levels at $124 and may be about to breakout</li>
<li>The overall picture on the chart indicates a move to $150. If seen with rising yields again, it would yet again provide a negative backdrop for equities.</li>
<li>While the S&amp;P 500 may stretch up to 4,300 in the short term, that would be a sell zone as the medium term picture points to further downside.</li>
</ul>


Brent Crude is approaching important levels at $124 and may be about to breakout
The overall picture on the chart indicates a move to $150. If seen with rising yields again, it would yet again provide a negative backdrop for equities.
While the S&amp;P 500 may stretch up to 4,300 in the short term, that would be a sell zone as the medium term picture points to further downside.


<ul>
<li>Nominal GDP increased 6.5%QoQsaar, but the GDP deflator was up 8%, so real GDP declined 1.4% in Q1CY22. With core PCE inflation at 5.4%, brace for 50bp hike next week.</li>
<li>With M2 growing faster in Apr'20-Mar'21 than any time in the past 150 years, the recent surge in inflation is precisely as we'd predicted.  The overheating economy needs monetary tightening. </li>
<li>Imports (+17.7% in Q1CY22) subtracted 2.5% from GDP and inventory-destocking subtracted 0.84%. These will be less negative as monetary policy tightens,  with FF rate rising to 2.75% by end-2022. </li>
</ul>


Nominal GDP increased 6.5%QoQsaar, but the GDP deflator was up 8%, so real GDP declined 1.4% in Q1CY22. With core PCE inflation at 5.4%, brace for 50bp hike next week.
With M2 growing faster in Apr'20-Mar'21 than any time in the past 150 years, the recent surge in inflation is precisely as we'd predicted.  The overheating economy needs monetary tightening. 
Imports (+17.7% in Q1CY22) subtracted 2.5% from GDP and inventory-destocking subtracted 0.84%. These will be less negative as monetary policy tightens,  with FF rate rising to 2.75% by end-2022. 


US Continues to Overheat, Reflected in a Seemingly-Weak GDP Print

<ul>
<li>The rebound on the Dow Jones Industrial Average over the past several weeks has been impressive, as is the case with other US stock market indices</li>
<li>However, when we zoom out and measure it in the proper manner against Gold with an historical lens, a different image emerges</li>
<li>Overall, the picture on this Spooky Chart –Dow/Gold Ratio– still warns of another low over the coming 1-2 months i.e. a move in favour of Gold and against stocks</li>
</ul>


The rebound on the Dow Jones Industrial Average over the past several weeks has been impressive, as is the case with other US stock market indices
However, when we zoom out and measure it in the proper manner against Gold with an historical lens, a different image emerges
Overall, the picture on this Spooky Chart –Dow/Gold Ratio– still warns of another low over the coming 1-2 months i.e. a move in favour of Gold and against stocks


Spooky Chart Update III - Dow/Gold: The Next Low Ahead

United States

The Dow Jones Industrial Average is a price-weighted average of 30 blue-chip stocks that are generally the leaders in their industry. It has been a widely followed indicator of the stock market since October 1, 1928.

Dow Jones Industrial Average (INDU INDEX)

Dow Jones Industrial Average (INDU INDEX)

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Spooky Chart Update IV

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A Crude Development

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US Continues to Overheat, Reflected in a Seemingly-Weak GDP Print

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Spooky Chart Update III - Dow/Gold: The Next Low Ahead

The Spooky Chart - The Dow compared to the 1920's after the last pandemic - still provides a road map for where we are heading. We are warned of...

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