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.


Cross Asset Strategy

<ul>
<li>World asset prices are supported by Global Liquidity. Historic correlation more than 0.7</li>
<li>
Wall Street is not into bubble territory</li>
<li>US Equity valuations against liquidity are 1.01 times versus long-term average 0.9x</li>
<li>
World equities look more compelling at a liquidity multiple of 0.51 times, against long-term average of 0.5 times</li>
</ul>


World asset prices are supported by Global Liquidity. Historic correlation more than 0.7

Wall Street is not into bubble territory
US Equity valuations against liquidity are 1.01 times versus long-term average 0.9x

World equities look more compelling at a liquidity multiple of 0.51 times, against long-term average of 0.5 times


Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Global indexes including the MSCI ACWI and ACWI ex-US are following in the MSCI EM index’s footsteps by breaking to new highs. This is bullish and signals a new leg higher is underway. Additionally, the US dollar is showing signs of a breakdown, something we view as a positive for global risk sentiment as long as the decline continues to be orderly. Overall our outlook remains bullish and we suggest buying any dips. Growth remains long-term leadership -- remain overweight. Attractive growth Sectors highlighted in today’s report include: Health Care, Services, Technology, and Communications

Global indexes including the MSCI ACWI and ACWI ex-US are following in the MSCI EM index’s footsteps by breaking to new highs. This is bullish and signals a new leg higher is underway. Additionally, the US dollar is showing signs of a breakdown, something we view as a positive for global risk sentiment as long as the decline continues to be orderly. Overall our outlook remains bullish and we suggest buying any dips. Growth remains long-term leadership -- remain overweight. Attractive growth Sectors highlighted in today’s report include: Health Care, Services, Technology, and Communications

U.S. Dollar Breakdown: Bullish For Ex-U.S. Equities

<ul>
<li>The worst and the best of 2020 may already be over for the financial markets  </li>
<li>
Global Liquidity remains buoyant, but growth is peaking</li>
<li>US broad liquidity expansion slowed markedly in June 2020</li>
<li>Still on-track for V-shaped economic rebound</li>
<li>Slower liquidity growth and large upcoming coupon issuance points to at best range bound Wall Street</li>
</ul>


The worst and the best of 2020 may already be over for the financial markets  

Global Liquidity remains buoyant, but growth is peaking
US broad liquidity expansion slowed markedly in June 2020
Still on-track for V-shaped economic rebound
Slower liquidity growth and large upcoming coupon issuance points to at best range bound Wall Street


Global indexes remain overwhelmingly positive which is supported by the fact that there is a dearth of breakdowns. Overall our big picture view remains unchanged; overhead longer-term resistance on the MSCI EM, EAFE, and ACWI ex-US indexes (all priced in local currency) is something to be aware of, however if the ACWI-US is above $70 our intermediate-term outlook remains bullish and we suggest buying any dips. In today's report we highlight attractive charts within defensives (Consumer Staples &amp; Utilities), cyclicals (Consumer Discretionary, Energy, Financial, &amp; Materials), and in-between Sectors (Communications, Services, &amp; Health Care)

Global indexes remain overwhelmingly positive which is supported by the fact that there is a dearth of breakdowns. Overall our big picture view remains unchanged; overhead longer-term resistance on the MSCI EM, EAFE, and ACWI ex-US indexes (all priced in local currency) is something to be aware of, however if the ACWI-US is above $70 our intermediate-term outlook remains bullish and we suggest buying any dips. In today's report we highlight attractive charts within defensives (Consumer Staples &amp; Utilities), cyclicals (Consumer Discretionary, Energy, Financial, &amp; Materials), and in-between Sectors (Communications, Services, &amp; Health Care)

Global Equity Strategy: Stick With Technology

<ul>
<li>V-shaped rebound confirmed. Global Liquidity Index (GLI) rises again to 85.1 (‘normal’ range 0-100). In US$ terms Global Liquidity could soar by 30-40% in 2020 to some US$190 trillion</li>
<li>
US Fed Liquidity Index hits 90.3 and Balance Sheet likely to test US$10 trillion in 2020</li>
<li>This will push the equity/ liquidity ratio down to near historic lows at 0.37 times. It shows how skewed portfolios are towards ‘safety’ and by corollary by how much investors’ mood is depressed</li>
<li>
Yield curves have further to steepen. US curve could add 150bp of steepening
</li>
<li>
Capital flows into US dollar show clear signs of rolling over. Gold/ Euro attractive</li>
</ul>


V-shaped rebound confirmed. Global Liquidity Index (GLI) rises again to 85.1 (‘normal’ range 0-100). In US$ terms Global Liquidity could soar by 30-40% in 2020 to some US$190 trillion

US Fed Liquidity Index hits 90.3 and Balance Sheet likely to test US$10 trillion in 2020
This will push the equity/ liquidity ratio down to near historic lows at 0.37 times. It shows how skewed portfolios are towards ‘safety’ and by corollary by how much investors’ mood is depressed

Yield curves have further to steepen. US curve could add 150bp of steepening


Capital flows into US dollar show clear signs of rolling over. Gold/ Euro attractive


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)

Wall Street Is Not A Bubble

World asset prices are supported by Global Liquidity. Historic correlation more than 0.7 Wall Street is not into bubble territory US Equity...

Michael J. Howell

U.S. Dollar Breakdown: Bullish For Ex-U.S. Equities

Global indexes including the MSCI ACWI and ACWI ex-US are following in the MSCI EM index’s footsteps by breaking to new highs. This is bullish and...

Vermilion Research

A Liquidity Peak With A View

The worst and the best of 2020 may already be over for the financial markets Global Liquidity remains buoyant, but growth is peaking US broad...

Michael J. Howell

Global Equity Strategy: Stick With Technology

Global indexes remain overwhelmingly positive which is supported by the fact that there is a dearth of breakdowns. Overall our big picture view...

Vermilion Research

It’s A Big, Beautiful ‘V’

V-shaped rebound confirmed. Global Liquidity Index (GLI) rises again to 85.1 (‘normal’ range 0-100). In US$ terms Global Liquidity could soar by...

Michael J. Howell