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>That Bank of England had to increase the pace of interest rate hikes so late in the tightening cycle is incontrovertible evidence that the central bank remains behind the curve. </li>
<li>Based on the historical relationship between consumer and producer prices, with a PPI of 1.0%, German headline inflation should be just below 2%</li>
<li>The NASDAQ Index and the US interest rates are diverging rapidly. This is not what is supposed to happen in a discounted cash flow model for growth stocks.</li>
</ul>


That Bank of England had to increase the pace of interest rate hikes so late in the tightening cycle is incontrovertible evidence that the central bank remains behind the curve. 
Based on the historical relationship between consumer and producer prices, with a PPI of 1.0%, German headline inflation should be just below 2%
The NASDAQ Index and the US interest rates are diverging rapidly. This is not what is supposed to happen in a discounted cash flow model for growth stocks.


The Weekly Market Monitor – Another Hawkish Twist

Thematic (Sector/Industry)

<ul>
<li>One reason the Global Fund Manager Survey is interesting is that it often contains contradictions concerning investor positioning.</li>
<li>Global Fund Managers are joining the AI boom, are heavily overweight tech stocks, but only 54% of them expect AI to boost company profits.</li>
<li>We believe global fund managers are long tech stocks because of strong momentum and the market extrapolation of artificial intelligence impacting earnings and sales growth, not because of superior fundamentals. </li>
</ul>


One reason the Global Fund Manager Survey is interesting is that it often contains contradictions concerning investor positioning.
Global Fund Managers are joining the AI boom, are heavily overweight tech stocks, but only 54% of them expect AI to boost company profits.
We believe global fund managers are long tech stocks because of strong momentum and the market extrapolation of artificial intelligence impacting earnings and sales growth, not because of superior fundamentals. 


Macroeconomics

<ul>
<li>We believe the most recent FOMC decisions and forward guidance on US monetary policy should be interpreted as ‘hawkish.’</li>
<li>Bullish case: Why 'skip' with just 4 meetings remaining, inflation down to 3.5% leaves monetary policy very tight, and the Fed didn't hike in 2006 after a 425 bps increase.</li>
<li>Bearish case: Dec 2024 Fed Fund future at 3.85%, rates are (very) restrictive in any case, this is no environment for growth stocks, look what happened after 2006.</li>
</ul>


We believe the most recent FOMC decisions and forward guidance on US monetary policy should be interpreted as ‘hawkish.’
Bullish case: Why 'skip' with just 4 meetings remaining, inflation down to 3.5% leaves monetary policy very tight, and the Fed didn't hike in 2006 after a 425 bps increase.
Bearish case: Dec 2024 Fed Fund future at 3.85%, rates are (very) restrictive in any case, this is no environment for growth stocks, look what happened after 2006.


Bullish or Bearish? Our Thoughts on the Fed’s Hawkish Pause

<ul>
<li>The ISM Manufacturing Index fell to 46.9 and reveals clear downside for equities based on the historical relationship.</li>
<li>The US labor market remains way too hot for the Fed and significantly increases the odds of another rate hike even as a massive drop in inflation materializes. </li>
<li>The P/E ratio of Big Tech stocks equals 56, while earnings growth has turned negative in recent quarters. Not the best starting point with the MOVE/VIX ratio &gt;8.</li>
</ul>


The ISM Manufacturing Index fell to 46.9 and reveals clear downside for equities based on the historical relationship.
The US labor market remains way too hot for the Fed and significantly increases the odds of another rate hike even as a massive drop in inflation materializes. 
The P/E ratio of Big Tech stocks equals 56, while earnings growth has turned negative in recent quarters. Not the best starting point with the MOVE/VIX ratio &gt;8.


ISM Down, Rates Up, Valuation Ballooning; What Could Go Wrong?

<ul>
<li>History shows that stock market bubbles - a 100% price boom within a year, followed by a 50%+ crash in the following year - are extremely rare.</li>
<li>We apply this metric to current market dynamics and conclude there are no booms around these days.</li>
<li>When expanding the definition of a bubble, two of them appear but only in a small subset of the total stock market: Non-profitable Tech stocks and NVIDIA.</li>
</ul>


History shows that stock market bubbles - a 100% price boom within a year, followed by a 50%+ crash in the following year - are extremely rare.
We apply this metric to current market dynamics and conclude there are no booms around these days.
When expanding the definition of a bubble, two of them appear but only in a small subset of the total stock market: Non-profitable Tech stocks and NVIDIA.


Bubble or Breadth: Evaluating the State of the Stock Market

United States

The NASDAQ Composite Index is a broad-based capitalization-weighted index of stocks in all three NASDAQ tiers: Global Select, Global Market and Capital Market. The index was developed with a base level of 100 as of February 5, 1971.

NASDAQ Composite Index (CCMP INDEX)

The Weekly Market Monitor – Another Hawkish Twist

The Bank of England confirms central banks and more monetary tightening is coming. Will investors shy away from (very) expensive equities and look...

Jeroen Blokland

Artificial Inconsistencies

Artificial Intelligence brings the Beatles back together, and Global Fund Managers are joining the AI boom. But NOT because of superior fundamentals.

Jeroen Blokland

Bullish or Bearish? Our Thoughts on the Fed’s Hawkish Pause

Reevaluating Monetary Policy: The latest FOMC decisions and forward guidance on US monetary policy should be interpreted as ‘hawkish.’

Jeroen Blokland

ISM Down, Rates Up, Valuation Ballooning; What Could Go Wrong?

The AI Boom remains real, but so is deteriorating Macro, extreme SKEW, the MOVE-VIX divergence, and lofty Big Tech valuation.

Jeroen Blokland

Bubble or Breadth: Evaluating the State of the Stock Market

No current stock market boom is evident, but concerns arise regarding market breadth and concentration of market value in a few major stocks.

Jeroen Blokland