Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Cross Asset Strategy

Despite the weaker-than-expected non-farm payrolls (NFP) report for November 2020 (with payrolls rising by just 245K versus the consensus expectation of 469K), the US economy otherwise remains in robust health. The ISM manufacturing PMI gauges for October and November were the strongest two readings in 2020, with the leading indicator (new orders) suggesting that manufacturing will strengthen substantially further in 1H 2021. ISM's services PMI (56.3) was marginally (1.3 points) weaker in October-November than the June-September average, but still suggestive of a stable economy, with new orders (58) pointing to a healthy 1H 2021. The surging toll of Covid-19 cases and deaths in the US (which both climbed to new records for 7-day moving averages in the latest week) will bring forth an aggressive federal-government response from the incoming Biden administration, slightly slowing the momentum of the US economy in 1Q 2021. However, the emerging Biden cabinet is essentially a restoration of the centrist elements of the Obama-Biden team, with the economic team notably lacking any clear representatives of the Democratic left (the Sanders-Warren wing), instead packed with experienced hands like Janet Yellen (ex-Fed chair) as Treasury Secretary. The chair of the council of economic advisors (CEA) and national economic council (NEC), Cecilia Rouse and Brian Deese respectively, are both centrists, although the two other members of the CEA are from the left. The likelihood of an early roll-out of the Pfizer/BioNTech vaccine, and rival ones by Moderna and Oxford/AstraZeneca will buoy markets and risk appetite for the rest of the year, despite the fact that global equities are very richly-valued. The Biden foreign policy team is notable for being manned by relative China doves: Biden himself said last year about China "they're not bad folks, folks"; his pick for Secretary of State (Anthony Blinken) said in July that a Biden administration will "re-engage and work with China" from a position of strength, while Biden's NSA (national security advisor) pick, Jake Sullivan, has spoken of "managed coexistence" with China. Despite hawkish language in the official Democratic platform, the Biden team's instincts are to be relatively soft on China. However, both houses of Congress have turned very hawkish on China, and the State Department published a 74-page document on 20 November 2020 entitled "The Elements of the China Challenge", very akin to Kennan's 1946 "Long Telegram" arguing for containment of the USSR, asserting that "in the face of the China challenge, the United States must secure freedom" around the world. Although the Biden team's instincts are more dovish (and this will ease the trade war by mid-2021), the tension between containment and "managed coexistence" will be an ongoing theme of the Biden administration.

Despite the weaker-than-expected non-farm payrolls (NFP) report for November 2020 (with payrolls rising by just 245K versus the consensus expectation of 469K), the US economy otherwise remains in robust health. The ISM manufacturing PMI gauges for October and November were the strongest two readings in 2020, with the leading indicator (new orders) suggesting that manufacturing will strengthen substantially further in 1H 2021. ISM's services PMI (56.3) was marginally (1.3 points) weaker in October-November than the June-September average, but still suggestive of a stable economy, with new orders (58) pointing to a healthy 1H 2021. The surging toll of Covid-19 cases and deaths in the US (which both climbed to new records for 7-day moving averages in the latest week) will bring forth an aggressive federal-government response from the incoming Biden administration, slightly slowing the momentum of the US economy in 1Q 2021. However, the emerging Biden cabinet is essentially a restoration of the centrist elements of the Obama-Biden team, with the economic team notably lacking any clear representatives of the Democratic left (the Sanders-Warren wing), instead packed with experienced hands like Janet Yellen (ex-Fed chair) as Treasury Secretary. The chair of the council of economic advisors (CEA) and national economic council (NEC), Cecilia Rouse and Brian Deese respectively, are both centrists, although the two other members of the CEA are from the left. The likelihood of an early roll-out of the Pfizer/BioNTech vaccine, and rival ones by Moderna and Oxford/AstraZeneca will buoy markets and risk appetite for the rest of the year, despite the fact that global equities are very richly-valued. The Biden foreign policy team is notable for being manned by relative China doves: Biden himself said last year about China "they're not bad folks, folks"; his pick for Secretary of State (Anthony Blinken) said in July that a Biden administration will "re-engage and work with China" from a position of strength, while Biden's NSA (national security advisor) pick, Jake Sullivan, has spoken of "managed coexistence" with China. Despite hawkish language in the official Democratic platform, the Biden team's instincts are to be relatively soft on China. However, both houses of Congress have turned very hawkish on China, and the State Department published a 74-page document on 20 November 2020 entitled "The Elements of the China Challenge", very akin to Kennan's 1946 "Long Telegram" arguing for containment of the USSR, asserting that "in the face of the China challenge, the United States must secure freedom" around the world. Although the Biden team's instincts are more dovish (and this will ease the trade war by mid-2021), the tension between containment and "managed coexistence" will be an ongoing theme of the Biden administration.  

US Economy Robust Despite Surging Covid Toll; Biden Cabinet Looks China-Positive

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

Our outlook remains bullish and we continue to recommend adding exposure on pullbacks. At the moment it is difficult to point to any problems in the market aside from increasingly bullish sentiment from market participants and the worry that things are getting overheated and over-extended. In today’s report we highlight attractive Groups and stocks within Energy and Materials: Oil &amp; Gas Equip/Svcs., Large-Cap, Oil &amp; Gas Equip/Svcs., Small-Cap, Metals, Steel, Integrated, U.S., and Aluminum.

Our outlook remains bullish and we continue to recommend adding exposure on pullbacks. At the moment it is difficult to point to any problems in the market aside from increasingly bullish sentiment from market participants and the worry that things are getting overheated and over-extended. In today’s report we highlight attractive Groups and stocks within Energy and Materials: Oil &amp; Gas Equip/Svcs., Large-Cap, Oil &amp; Gas Equip/Svcs., Small-Cap, Metals, Steel, Integrated, U.S., and Aluminum.

U.S. Equity Strategy: Market Too Good To Be True?

Founder & CEO Bond Angle, LLC, Bond Angle, LLC

Vicki Bryan

Founder & CEO Bond Angle, LLC

Bond Angle, LLC

Insightful commentary and analysis on bond markets and market movers, including financial, economic, and industry catalysts and management shenanigans. 

High yield market investment research

Credit

<a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a> announced Tuesday morning that it plans to raise up to <a href="https://www.wsj.com/articles/tesla-plans-stock-sale-closing-year-of-soaring-gains-11607444177?mod=article_inline" target="_blank" rel="noopener">$5 billion in new sales of stock</a> over time at prevailing market prices. As the third offering this year, including just three months ago, Tesla stands to raise more than $12 billion.And why not, say Tesla fans. With the stock up 674% so far this year, it has become only the <a href="https://www.barrons.com/articles/tesla-becomes-only-the-sixth-company-to-top-600-billion-in-value-51607377650" target="_blank" rel="noopener">sixth company ever to hit $600 </a><a href="https://www.barrons.com/articles/tesla-becomes-only-the-sixth-company-to-top-600-billion-in-value-51607377650" target="_blank" rel="noopener">billion</a> in market value. <a href="https://www.wsj.com/articles/tesla-to-be-added-to-s-p-500-index-11605566006?mod=article_inline" target="_blank" rel="noopener">In two weeks it will added</a> to the <a href="https://www.smartkarma.com/entities/s-p-500" target="_blank" data-smartkarma-citation="entities:22886:1" rel="noopener">S&amp;P 500 (SPX INDEX)</a>.Such blind enthusiasm dismisses Tesla's problematic sales trends, its chronic lack of core unprofitability and free cash flow, it's increasingly threatened prospects, and more.Or that Tesla needs to borrow every quarter and stretch its payables and sell record amounts of stock after reporting last January that it had “<a href="https://tesla-cdn.thron.com/static/O7WXQA_TSLA_Update_Letter_2019-4Q_BPWOH4.pdf" target="_blank" rel="noopener">grown to the point of being self-funding</a>.” Not even close.Yet investors remain unconcerned, and Tesla knows it.<div class="content-highlight">The full Bond Angle report continues below.</div>

Tesla Motors (TSLA US) announced Tuesday morning that it plans to raise up to $5 billion in new sales of stock over time at prevailing market prices. As the third offering this year, including just three months ago, Tesla stands to raise more than $12 billion.And why not, say Tesla fans. With the stock up 674% so far this year, it has become only the sixth company ever to hit $600 billion in market value. In two weeks it will added to the S&amp;P 500 (SPX INDEX).Such blind enthusiasm dismisses Tesla's problematic sales trends, its chronic lack of core unprofitability and free cash flow, it's increasingly threatened prospects, and more.Or that Tesla needs to borrow every quarter and stretch its payables and sell record amounts of stock after reporting last January that it had “grown to the point of being self-funding.” Not even close.Yet investors remain unconcerned, and Tesla knows it.The full Bond Angle report continues below.

Tesla to Sell Another $5 Billion in Stock—Might As Well

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. 

Equity rally cycle very extended in Asia and Europe with the US equity cycle staging a final push out above NDX 12,500 and the DJI bull triangle at 30k. SPX rally energy beginning to struggle near 3,720 projection.USD near a cycle low expected to front run the equity cycle peak due next week. Low in USD, peak in the equity cycle and low in gold.Our ideal cycle peak comes in around December 15 with the next cycle date on December 21 that will trigger profit taking into year-end that will most likely snowball ahead of a fresh bull drive in January/February.We outlined NDX and DJI key levels as the rally drivers this week and where a rally would fail given a number of mounting risks into year-end.

Equity rally cycle very extended in Asia and Europe with the US equity cycle staging a final push out above NDX 12,500 and the DJI bull triangle at 30k. SPX rally energy beginning to struggle near 3,720 projection.USD near a cycle low expected to front run the equity cycle peak due next week. Low in USD, peak in the equity cycle and low in gold.Our ideal cycle peak comes in around December 15 with the next cycle date on December 21 that will trigger profit taking into year-end that will most likely snowball ahead of a fresh bull drive in January/February.We outlined NDX and DJI key levels as the rally drivers this week and where a rally would fail given a number of mounting risks into year-end.

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.

Macroeconomics

Periodically, the pro-growth agenda of former US Treasury secretaries has created an antagonistic relationship with the leadership at the Fed. Since 1990, however, relations between the Treasury and Fed have been largely amicable, while no major changes in congeniality are expected soon. Janet Yellen's extensive experience at the Fed has initially been viewed bullishly by Wall Street, along with her previous role working directly under a Democratic President. As Fed Chair, she had a dovish tilt towards policy formulation aimed primarily at healing the US labour market, while financial market conditions ranked lower in importance. Former Fed Chair Yellen was viewed as being a long-term deficit hawk during her tenure at the central bank, but she recognised the importance of fiscal policy in supporting  aggregate demand in the near-term. As a prospective Treasury Secretary, she recognises the importance that expansion of fiscal policy could have to mitigate the impact of COVID-19, but specific measures remain elusive at this juncture. A high level of US Treasury borrowing is anticipated in 2021 Q1, thereby implying that the Fed will need to ramp up asset purchases to prevent a reduction in bank reserves. Meanwhile, further liquidity injections are in the offing as the Treasury runs down its high cash balance at the Fed during 2021 H1, thereby implying meaningful support for the real economy, although the outlook beyond is uncertain.

Periodically, the pro-growth agenda of former US Treasury secretaries has created an antagonistic relationship with the leadership at the Fed. Since 1990, however, relations between the Treasury and Fed have been largely amicable, while no major changes in congeniality are expected soon.  Janet Yellen's extensive experience at the Fed has initially been viewed bullishly by Wall Street, along with her previous role working directly under a Democratic President. As Fed Chair, she had a dovish tilt towards policy formulation aimed primarily at healing the US labour market, while financial market conditions ranked lower in importance.  Former Fed Chair Yellen was viewed as being a long-term deficit hawk during her tenure at the central bank, but she recognised the importance of fiscal policy in supporting  aggregate demand in the near-term. As a prospective Treasury Secretary, she recognises the importance that expansion of fiscal policy could have to mitigate the impact of COVID-19, but specific measures remain elusive at this juncture.  A high level of US Treasury borrowing is anticipated in 2021 Q1, thereby implying that the Fed will need to ramp up asset purchases to prevent a reduction in bank reserves. Meanwhile, further liquidity injections are in the offing as the Treasury runs down its high cash balance at the Fed during 2021 H1, thereby implying meaningful support for the real economy, although the outlook beyond is uncertain.

Congenial Treasury-Fed Nexus Under Yellen Places Spotlight on Fiscal Policy Outlook

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)

US Economy Robust Despite Surging Covid Toll; Biden Cabinet Looks China-Positive

ISM surveys suggest manufacturing and services will stay strong in 1H 2021 despite the weak NFP. Biden's centrist and China-dovish team, plus...

Prasenjit K. Basu

U.S. Equity Strategy: Market Too Good To Be True?

Our outlook remains bullish and we continue to recommend adding exposure on pullbacks. In today’s report we highlight attractive Groups and stocks...

Vermilion Research

Tesla to Sell Another $5 Billion in Stock—Might As Well

Tesla is selling another $5 billion in stock—because it can and, surprisingly, it probably needs the cash. That doesn't mean investors should buy.

Vicki Bryan

Mid December Equity Peak

Equity rally cycle very extended in Asia and Europe with some tailwinds for the US into the next key cycle timeline. USD near a cycle low expected...

Thomas Schroeder

Congenial Treasury-Fed Nexus Under Yellen Places Spotlight on Fiscal Policy Outlook

Major policy disagreements between the Fed and Treasury are unlikely with Janet Yellen heading the latter. Focus will shift towards how much leeway...

DeSaque Macro Research