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.

Macroeconomics

<ul>
<li>US headline inflation disappointed. But the underlying CPI data is less concerning than the headline inflation rate suggests.</li>
<li>This means another Fed rate hike is now de facto dependent on oil prices and Saudi Arabia. Not where you want to be as Chairman of the Federal Reserve.</li>
<li>Historically, stocks perform well following a peak in inflation, but historical performance has been entirely priced in with a return of almost 18% since last year’s peak. </li>
</ul>


US headline inflation disappointed. But the underlying CPI data is less concerning than the headline inflation rate suggests.
This means another Fed rate hike is now de facto dependent on oil prices and Saudi Arabia. Not where you want to be as Chairman of the Federal Reserve.
Historically, stocks perform well following a peak in inflation, but historical performance has been entirely priced in with a return of almost 18% since last year’s peak. 


Saudi Arabia Is Now in Charge of the Federal Reserve

Head of Research, Steno Research

Emil Moller

Head of Research

Macro and Geopolitical Research House

Steno Research

Steno Research is a new macro and geopolitical research house. We are based out of Copenhagen, Denmark, but have an international team and a strong network of sources and partners around the world. The team is lead by Andreas Steno, previous global head of strategy at Nordea Bank, and Mikkel Rosenvold, former chief consultant in the Danish Ministry of Finance.

<ul>
<li>In a week where the USD is celebrating its longest rally streak in 9 years with 8 consecutive weeks of outperforming currency peers, it’s noteworthy how both commodities have remained resilient and energy managed to rally</li>
<li>Not only does this reinforce our US bull case, but it also lends support to my recent bearish stance on emerging markets</li>
<li>US imports being down some 5% on a YoY basis for Q2 is not exactly helping struggling players here either.</li>
</ul>


In a week where the USD is celebrating its longest rally streak in 9 years with 8 consecutive weeks of outperforming currency peers, it’s noteworthy how both commodities have remained resilient and energy managed to rally
Not only does this reinforce our US bull case, but it also lends support to my recent bearish stance on emerging markets
US imports being down some 5% on a YoY basis for Q2 is not exactly helping struggling players here either.


Positioning Watch: The USD Wrecking Ball & Oil’s Roaring Rally

Cross Asset Strategy

<ul>
<li>Why did the seemingly marginally negative Apple news coming from China erase a whopping USD 200 billion in market cap? </li>
<li>It seems like the US labor market has wrongfooted investors again, judging from the latest ISM Services and claims data.</li>
<li>The Chinese Yuan has also rejoined its downward trend after a brief revival, and this does not bode well for equities.</li>
</ul>


Why did the seemingly marginally negative Apple news coming from China erase a whopping USD 200 billion in market cap? 
It seems like the US labor market has wrongfooted investors again, judging from the latest ISM Services and claims data.
The Chinese Yuan has also rejoined its downward trend after a brief revival, and this does not bode well for equities.


The Weekly Market Monitor – Valuation Woes and Currency Moves

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

<ul>
<li>Over the last two weeks we discussed expectations for an oversold bounce; the bounce has continued. We believe it is possible we've seen the lows for this pause/pullback on SPX.</li>
<li>We see low probability of a meaningful correction if SPX is above 4300-4325 (1.5-year support), but would not be surprised to see another month+ of consolidation between 4325 and 4600.</li>
<li>Shorter-Term, as long as 4460 short-term support holds, we expect a test of 4600. Today we highlight several buys within Energy.</li>
</ul>


Over the last two weeks we discussed expectations for an oversold bounce; the bounce has continued. We believe it is possible we've seen the lows for this pause/pullback on SPX.
We see low probability of a meaningful correction if SPX is above 4300-4325 (1.5-year support), but would not be surprised to see another month+ of consolidation between 4325 and 4600.
Shorter-Term, as long as 4460 short-term support holds, we expect a test of 4600. Today we highlight several buys within Energy.


Bounce Continues; Small-Caps Test 3.5-Year RS Lows; Nasdaq/NYSE Breadth Improving; Buys in Energy

<ul>
<li>Our simple regression analysis yields an S&amp;P 500 Index estimate of 3,710, or 18% lower than the last closing price of 4,515 based on the latest ISM Manufacturing number.</li>
<li>An ISM Manufacturing Index of 56.5., which means the economy must boom, starkly contrasting with the initial signs of a cooling labor market.</li>
<li>If a ‘soft landing’ occurs, our S&amp;P 500 estimate with an ISM of 52 equals 3,990, 12% lower than the current closing price.</li>
</ul>


Our simple regression analysis yields an S&amp;P 500 Index estimate of 3,710, or 18% lower than the last closing price of 4,515 based on the latest ISM Manufacturing number.
An ISM Manufacturing Index of 56.5., which means the economy must boom, starkly contrasting with the initial signs of a cooling labor market.
If a ‘soft landing’ occurs, our S&amp;P 500 estimate with an ISM of 52 equals 3,990, 12% lower than the current closing price.


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)

Saudi Arabia Is Now in Charge of the Federal Reserve

Whether the Fed hikes again largely depends on Saudi Arabia and oil and energy prices, all outside Powell's span of control.

Jeroen Blokland

Positioning Watch: The USD Wrecking Ball & Oil’s Roaring Rally

In a week where the USD is celebrating its longest rally streak in 9 years with 8 consecutive weeks of outperforming currency peers, it’s...

Steno Research

The Weekly Market Monitor – Valuation Woes and Currency Moves

Apple erasing USD 200 billion in market cap on marginally negative news confirms (US) Equities are priced for perfection.

Jeroen Blokland

Bounce Continues; Small-Caps Test 3.5-Year RS Lows; Nasdaq/NYSE Breadth Improving; Buys in Energy

Expectations over the past two weeks for an oversold bounce in $SPX have played out. 4300-4325 (1.5-year support) remains solid floor, but could...

Vermilion Research

The S&P 500 Index Needs a Macro Miracle!

It would require a massive spike in the ISM Manufacturing Index and, hence, a boom in the US economy to remove the vast amount of equity market...

Jeroen Blokland