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.

Actionable Investment Ideas

Macroeconomics

<ul><li>Powell’s remarks in the Wall Street Journal interview this week were quite interesting, and markets seem to have noticed: we have seen quite some wild moves, but again the most relevant price action is happening under the surface.</li><li>In such a choppy market environment, systematic risk management techniques and a data-driven investment approach are key to tell the forest from the trees and reduce drawdowns in your portfolio.</li><li>Powell played the hawkish horn again, and markets are reacting in quite some interesting ways.</li></ul>

Powell’s remarks in the Wall Street Journal interview this week were quite interesting, and markets seem to have noticed: we have seen quite some wild moves, but again the most relevant price action is happening under the surface.In such a choppy market environment, systematic risk management techniques and a data-driven investment approach are key to tell the forest from the trees and reduce drawdowns in your portfolio.Powell played the hawkish horn again, and markets are reacting in quite some interesting ways.

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

<ul>
<li>The US equity decline still lacks real capitulation/outflows/redemptions for a major low but the next leg down does offer a better tactical long entry point.</li>
<li>RSI near 25 is the ideal buy zone for the SPX (this week or into late May). The weekly cycle has yet to show a convincing bottom.</li>
<li>NDX 12,700 is rejection resistance to induce a slide closer to 11,000 higher degree support for a better tradable rally sequence. RTY bull near 1,650.</li>
</ul>


The US equity decline still lacks real capitulation/outflows/redemptions for a major low but the next leg down does offer a better tactical long entry point.
RSI near 25 is the ideal buy zone for the SPX (this week or into late May). The weekly cycle has yet to show a convincing bottom.
NDX 12,700 is rejection resistance to induce a slide closer to 11,000 higher degree support for a better tradable rally sequence. RTY bull near 1,650.


SPX 4,100 Barrier - Next Draw Down Sets up a Better Trade

Global Economist, DeSaque Macro Research

Said Desaque

Global Economist

Delivering Global Macro Investment Insights

DeSaque Macro Research

DeSaque Macro Research Limited was formed by Said DeSaque in April 2012 with the view to delivering global macro investment insights aimed at providing new ideas to clients.

Said DeSaque has over 26 years of experience working as a professional economist in financial services. Prior to establishing DeSaque Macro Research, Said held positions as Senior Economist at Robert W Baird and William Blair. He began his career as a graduate at PaineWebber in 1986, where he eventually became Head of the London Economics Department.

Said takes a very keen interest in international relations, along with their implications for economic development. His research interests include the economic transformation of China and its implications for global capital markets, particularly in the United States. He is a member of Chatham House in London.

The US economy and capital markets have historically been Said’s main focus of attention. He frequently presents his views to institutional investors in diverse geographic locations. In recent years, Said has also been carefully monitoring economic developments in Asia, particularly China and Japan.

<ul>
<li>The future trajectory of US Treasury yields depends on investors' perceptions whether the Fed has taken the necessary steps to quell inflation. Significant quantitative tightening will not occur until September. </li>
<li>The Fed engineered lower real yields over the past forty years, albeit at varying speeds. Lower real yields since 2008 have boosted leverage in the corporate and federal government sectors. </li>
<li>US equities are facing the perfect storm in the form of rising interest rates and uncertainty about the economic and corporate profit outlooks. Investors are not trusting corporate profit forecasts.</li>
</ul>


The future trajectory of US Treasury yields depends on investors' perceptions whether the Fed has taken the necessary steps to quell inflation. Significant quantitative tightening will not occur until September. 
The Fed engineered lower real yields over the past forty years, albeit at varying speeds. Lower real yields since 2008 have boosted leverage in the corporate and federal government sectors. 
US equities are facing the perfect storm in the form of rising interest rates and uncertainty about the economic and corporate profit outlooks. Investors are not trusting corporate profit forecasts.


Angst of Rising Real Interest Rates Haunts US Financial Markets as Profit Forecasts Fail to Impress

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>
Bear market underway in World equities and likely to see one-third peak to trough decline</li>
<li>Trigger is US Fed QT, but US Fed is NOT about to start QT. It has already been underway since Dec 15th 2021</li>
<li>Each $100 billion of QT, costs the SPX index around 60 points. Therefore expect S&amp;P500 to test 3250, or 20% lower
</li>
</ul>



Bear market underway in World equities and likely to see one-third peak to trough decline
Trigger is US Fed QT, but US Fed is NOT about to start QT. It has already been underway since Dec 15th 2021
Each $100 billion of QT, costs the SPX index around 60 points. Therefore expect S&amp;P500 to test 3250, or 20% lower



QT Is Already Here And The 2022-23 Bear Market Is Now Well Underway

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.

iShares Russell 1000 Value ETF / Technical Analysis

<ul>
<li>We have warned over the past month that a test of the lows, and possibly a break to new lows, is increasingly likely on the SPX, NDX, and Russell 2000.</li>
<li>We recently hit marginal new lows; while the indexes and our outlook remains neutral to bearish, we believe there is potential for an oversold bounce</li>
<li>Still, we will need to see the NYSE have back-to-back 80%+ upside volume days or one 90%+ upside volume day to have confidence that a major bottom is in place.</li>
</ul>


We have warned over the past month that a test of the lows, and possibly a break to new lows, is increasingly likely on the SPX, NDX, and Russell 2000.
We recently hit marginal new lows; while the indexes and our outlook remains neutral to bearish, we believe there is potential for an oversold bounce
Still, we will need to see the NYSE have back-to-back 80%+ upside volume days or one 90%+ upside volume day to have confidence that a major bottom is in place.


Fed Set to Hike 50 Bps As Indexes Test Support; Energy Stocks to Buy on Pullbacks

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)

Let The Macro Polar Stars Guide You

Powell’s remarks in the Wall Street Journal interview this week were quite interesting, and markets seem to have noticed: we have seen quite some...

Alfonso Peccatiello (Alf)

SPX 4,100 Barrier - Next Draw Down Sets up a Better Trade

The US equity decline still lacks real capitulation/outflows/redemptions for a major low but the next leg down does offer a better tactical long...