Global Multi-Asset Investment Strategist, True Insights

Jeroen Blokland

Global Multi-Asset Investment Strategist

Build Well-Diversified Multi-Asset Portfolios

True Insights

Our research helps investors build well-diversified multi-asset portfolios and profit from market developments. In addition, our unique and proven Macro – Sentiment – Valuation (MSV) investment framework ensures a consistent flow of new investment opportunities. Together with our market views, these opportunities will be reflected in our live ETF-based Global Multi-Asset Portfolios.

Cross Asset Strategy

<ul>
<li>Year-On-Year, M2 broad money supply has dropped by 4.1%. The 6-month annualized rate of decline is a whopping 6.5%. </li>
<li>As a result, Excess Liquidity (Money Supply Growth - Nominal GDP growth) has turned very negative, revealing money is being drawn from equities at a historically rapid pace.</li>
<li>Given the historical relationship between Excess Liquidity and Valuation, the forward P/E ratio of US Equities must drop to 16 from 19 for the two variables to align.</li>
</ul>


Year-On-Year, M2 broad money supply has dropped by 4.1%. The 6-month annualized rate of decline is a whopping 6.5%. 
As a result, Excess Liquidity (Money Supply Growth - Nominal GDP growth) has turned very negative, revealing money is being drawn from equities at a historically rapid pace.
Given the historical relationship between Excess Liquidity and Valuation, the forward P/E ratio of US Equities must drop to 16 from 19 for the two variables to align.


Money Supply-Driven Excess Liquidity Unveils 20% S&P 500 Downside Blog

Cross-Asset Liquidity Strategist, CrossBorder Capital

Michael J. Howell

Cross-Asset Liquidity Strategist

Implementing Research Using Alt Data & AI

CrossBorder Capital

CrossBorder Capital is a London-based independent investment advisory firm. Founded in 1996, it exploits a gap in the investment arena by focusing on Central bank liquidity. 

It specialises in the monitoring and analysis of global liquidity flows - an important determinant of asset prices, from currencies through to bonds, equities and real estate.

CrossBorder Capital implements its investment strategy and currently manages over US$ 350m.


<ul>
<li>We exlore a new weekly time series on Global Liquidity. The data start in 2010 and reveal a strong leading relationship to World asset markets. This is confirmed statistically</li>
<li>Latest data show a US$5 trillion rise since the end-2022 and a US$10 trillion increase since the cycle low in late-October 2022. Further gains are bullish for asset prices 
</li>
<li>Behind expanding Global Liquidity is a strengthening World Shadow Monetary Base. This measures the collateral pool than can be levered up by credit providers. It is leading the way</li>
</ul>


We exlore a new weekly time series on Global Liquidity. The data start in 2010 and reveal a strong leading relationship to World asset markets. This is confirmed statistically
Latest data show a US$5 trillion rise since the end-2022 and a US$10 trillion increase since the cycle low in late-October 2022. Further gains are bullish for asset prices 

Behind expanding Global Liquidity is a strengthening World Shadow Monetary Base. This measures the collateral pool than can be levered up by credit providers. It is leading the way


<ul>
<li>The measures taken by the Federal Reserve and the US Treasury do not protect against idiosyncratic bank runs like the one that hit First Republic Bank.</li>
<li>Big Tech is beating big time, but earnings and sales growth have declined significantly in recent quarters, while valuation increased.</li>
<li>Should volatility spike, which is definitely on the table, Systematic Macro investors will have to sell up to USD 300 billion in equities.</li>
</ul>


The measures taken by the Federal Reserve and the US Treasury do not protect against idiosyncratic bank runs like the one that hit First Republic Bank.
Big Tech is beating big time, but earnings and sales growth have declined significantly in recent quarters, while valuation increased.
Should volatility spike, which is definitely on the table, Systematic Macro investors will have to sell up to USD 300 billion in equities.


Weekly Market Monitor (17) - Banking Anxiety – Back with a Vengeance!

<ul>
<li>Positioning has been one of the few positives for equities in recent weeks, but a storm is brewing.</li>
<li>Systematic Macro investors have been absorbing USD 170 billion in global equities in recent weeks for just one reason, volatility.</li>
<li>Should equities drop to their October lows, our charts suggest volatility-related equity selling pressure of USD 300 billion. We remain underweight equities.</li>
</ul>


Positioning has been one of the few positives for equities in recent weeks, but a storm is brewing.
Systematic Macro investors have been absorbing USD 170 billion in global equities in recent weeks for just one reason, volatility.
Should equities drop to their October lows, our charts suggest volatility-related equity selling pressure of USD 300 billion. We remain underweight equities.


Systematic Macro Investors Represent USD 300 Billion in Selling Pressure!

Research from Water Tower Research, Water Tower Research

Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Equity Research Firm

Thematic (Sector/Industry)

<ul><li>Broad equity indexes remained range-bound, as the S&amp;P 500 and the MSCI World Index ended the week -0.06% and +0.07%, respectively.</li><li>The S&amp;P 500 has been stuck between 4,070 and 4,170 for the past three weeks.</li><li>Small caps finished slightly better, with the Russell 2000 up 0.59% from last week.</li></ul>

Broad equity indexes remained range-bound, as the S&amp;P 500 and the MSCI World Index ended the week -0.06% and +0.07%, respectively.The S&amp;P 500 has been stuck between 4,070 and 4,170 for the past three weeks.Small caps finished slightly better, with the Russell 2000 up 0.59% from last week.

The Highlights : Cannabis News for the Week Ending April 21, 2023

United States

The MSCI World Index is a free-float weighted equity index. It was developed with a base value of 100 as of December 31, 1969. MXWO includes developed world markets, and does not include emerging markets. MXWD includes both emerging and developed markets.

MSCI World Index (MXWO INDEX)

Money Supply-Driven Excess Liquidity Unveils 20% S&P 500 Downside Blog

Money Supply is shrinking, taking liquidity out of the stock market at a historically swift pace, but valuation does not reflect this at all.

Jeroen Blokland

What Did Global Liquidity Do Last Week?

More collateral and greater Global Liquidity are important for the health of asset markets. Latest weekly data evidence the cycle low was in...

Michael J. Howell

Weekly Market Monitor (17) - Banking Anxiety – Back with a Vengeance!

Welcome to the weekly Market Monitor, keeping you updated on the week’s most important charts and developments in financial markets.

Jeroen Blokland

Systematic Macro Investors Represent USD 300 Billion in Selling Pressure!

When volatility rises, as several indicators suggest, Systematic Macro investors will be forced to dump billions of stocks onto the market.

Jeroen Blokland

The Highlights : Cannabis News for the Week Ending April 21, 2023

Broad equity indexes remained range-bound, as the S&P 500 and the MSCI World Index ended the week -0.06% and +0.07%, respectively.

Water Tower Research