Macroeconomic and Investing, The Macro Compass

Alfonso Peccatiello (Alf)

Macroeconomic and Investing

The Macro Compass

Actionable investment ideas and unique global macro insights. From the desk of a former Head of $20 bn Investment Portfolio straight to your inbox.

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Macroeconomics

<ul><li>In yesterday’s Senate Banking Committee hearing, Powell brought his hawkish stance to new highs: a strong economy underpinned by healthy levels of consumers’ savings, 100 bps hikes not off the table, and to top it off a good likelihood the Fed will actively sell (!) mortgage-backed securities from their balance sheet.</li><li>Well, there is a big news: for the first time in 8 months, the bond market isn’t compounding Powell’s hawkish rhetoric.</li><li>Instead, fixed income investors have become loud enough we can almost hear them ask one big question: a recession is becoming increasingly likely, so what are you going to do about it J-Pow?</li></ul>

In yesterday’s Senate Banking Committee hearing, Powell brought his hawkish stance to new highs: a strong economy underpinned by healthy levels of consumers’ savings, 100 bps hikes not off the table, and to top it off a good likelihood the Fed will actively sell (!) mortgage-backed securities from their balance sheet.Well, there is a big news: for the first time in 8 months, the bond market isn’t compounding Powell’s hawkish rhetoric.Instead, fixed income investors have become loud enough we can almost hear them ask one big question: a recession is becoming increasingly likely, so what are you going to do about it J-Pow?

Founder, Market Thinker

Mark Tinker

Founder

Market Thinker

Mark Tinker has over 35 years experience as an investor, market strategist and economist. Having spent more than 20 years as a sell side strategist and being top rated on numerous occasions and surveys he moved to investment management in 2006 to run global equity portfolios in London and subsequently moved to Hong Kong in 2013 to help establish an Investment Management business for a top 20 international asset manager. He first started writing investment weeklies for his employers in 1989, developing a style characterised under the title Market Thinking and has been a regular commentator and presenter on CNBC, Bloomberg and other business channels, where his approach of rationalising market behaviour rather than making short term predictions on high frequency market data provides a welcome balance to his client audience.

Making Sense of the Narrative

<ul>
<li>Bond market volatility continues to lead all markets lower, triggering a further round of deleveraging.</li>
<li>Cryptos have been crushed and Credit markets appear to have hit capitulation, even if equities have not.</li>
<li>FX volatility, especially in the Yen, is also causing, as well as reflecting, distress in terms of forced buying/distressed selling and is being exaggerated by the (VaR) volatility based risk management models that trigger further deleveraging of balance sheets.</li>
</ul>


Bond market volatility continues to lead all markets lower, triggering a further round of deleveraging.
Cryptos have been crushed and Credit markets appear to have hit capitulation, even if equities have not.
FX volatility, especially in the Yen, is also causing, as well as reflecting, distress in terms of forced buying/distressed selling and is being exaggerated by the (VaR) volatility based risk management models that trigger further deleveraging of balance sheets.


<ul>
<li>Heading into yesterday’s Fed meeting, the bond market asked a tough question to Powell: do you mean business?</li>
<li>Powell took a ‘’Bad Cop, Good Cop’’ stance: he answered with a firm ‘’Yes’’ at first, and then tried to soften the message during the press conference.</li>
<li>This spurred a relief rally in risk assets, but it won’t last.<br>Bond markets hate half-hearted stances, and they will keep testing the Fed and risk assets until they get what they want: clarity.</li>
</ul>


Heading into yesterday’s Fed meeting, the bond market asked a tough question to Powell: do you mean business?
Powell took a ‘’Bad Cop, Good Cop’’ stance: he answered with a firm ‘’Yes’’ at first, and then tried to soften the message during the press conference.
This spurred a relief rally in risk assets, but it won’t last. Bond markets hate half-hearted stances, and they will keep testing the Fed and risk assets until they get what they want: clarity.


House of Market Insights, Market Radar

Market Radar

House of Market Insights

Quick market updates and lot of ideas for your investments from a multi-asset portfolio manager working for a family office.

Quick Market Updates

Technical Analysis

<ul>
<li>Above you can see the chart of the S&amp;P 500, and the Fibonacci Retracement of the index. There is a big support at 3,800, where the index already bounced in mid-May.</li>
<li>Apple reacted quite good to January market sell-off, but then the stock surrendered to the bears. From a 180$ high, the share lost almost 25%, and now it is close to a critical support at 135$.</li>
<li>The sentiment look very bad right now, and it is very likely to see a bearish breakout.</li>
</ul>


Above you can see the chart of the S&amp;P 500, and the Fibonacci Retracement of the index. There is a big support at 3,800, where the index already bounced in mid-May.
Apple reacted quite good to January market sell-off, but then the stock surrendered to the bears. From a 180$ high, the share lost almost 25%, and now it is close to a critical support at 135$.
The sentiment look very bad right now, and it is very likely to see a bearish breakout.


High Quality Stock Setups, Weekly Stock Bull Finder

Weekly Stock Bull Finder

High Quality Stock Setups

Finding high potential stock setups on quality companies

Thematic (Sector/Industry)

<ul><li>The market continues to have difficulty finding its footing after yet another hot CPI inflation print on Friday which will result in additional Federal Reserve monetary policy tightening.</li><li>Currently, the market is having trouble sorting out when inflation may be peaking and when the Federal Reserve may be able to pull back on their aggressive monetary tightening cycle.</li><li>Is anyone really surprised that inflation prints continue to make new highs when Americans are seeing it all the time in their everyday lives and throughout various aspects of the economy?</li></ul>

The market continues to have difficulty finding its footing after yet another hot CPI inflation print on Friday which will result in additional Federal Reserve monetary policy tightening.Currently, the market is having trouble sorting out when inflation may be peaking and when the Federal Reserve may be able to pull back on their aggressive monetary tightening cycle.Is anyone really surprised that inflation prints continue to make new highs when Americans are seeing it all the time in their everyday lives and throughout various aspects of the economy?

United States

The S&P 500® is widely regarded as the best single gauge of large-cap U.S. equities and serves as the foundation for a wide range of investment products. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization.

S&P 500 INDEX (SPX INDEX)

Time To Buy Bonds?

In yesterday’s Senate Banking Committee hearing, Powell brought his hawkish stance to new highs: a strong economy underpinned by healthy levels of...

Alfonso Peccatiello (Alf)

Build a Bear

Bond market volatility continues to lead all markets lower, triggering a further round of deleveraging. Cryptos have been crushed and Credit...

Mark Tinker

Stop Fooling Around, J-Pow

Powell took a ‘’Bad Cop, Good Cop’’ stance: he answered with a firm ‘’Yes’’ at first, and then tried to soften the message during the press...

Alfonso Peccatiello (Alf)

Charts to watch #5

Above you can see the chart of the S&P 500, and the Fibonacci Retracement of the index. There is a big support at 3,800, where the index already...

Market Radar

Weekly Stock Bullfinder - Week of 6/13

Currently, the market is having trouble sorting out when inflation may be peaking and when the Federal Reserve may be able to pull back on their...

Weekly Stock Bull Finder