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>The (equity) risk premium for banks (<a href="https://www.smartkarma.com/entities/spdr-s-p-bank-etf" target="_blank" data-smartkarma-citation="entities:32764:1" rel="noopener">SPDR S&amp;P Bank ETF (KBE US))</a> will go up while bank profitability will go down. There will be questions about smaller bank regulations.</li>
<li>Startups and smaller tech funds will struggle, potentially resulting in a lower valuation of the entire technology space (<a href="https://www.smartkarma.com/entities/ishares-us-technology-etf" target="_blank" data-smartkarma-citation="entities:32856:1" rel="noopener">iShares US Technology ETF (IYW US)).</a>
</li>
<li>Unless the Bank Term Funding Program does not solve the liquidity issues, the Federal Reserve must continue raising rates, forcing another standoff with markets (<a href="https://www.smartkarma.com/entities/spdr-s-p-500-etf-trust" target="_blank" data-smartkarma-citation="entities:763:1" rel="noopener">SPDR S&amp;P 500 (SPY US))</a> .</li>
</ul>


The (equity) risk premium for banks (SPDR S&amp;P Bank ETF (KBE US)) will go up while bank profitability will go down. There will be questions about smaller bank regulations.
Startups and smaller tech funds will struggle, potentially resulting in a lower valuation of the entire technology space (iShares US Technology ETF (IYW US)).

Unless the Bank Term Funding Program does not solve the liquidity issues, the Federal Reserve must continue raising rates, forcing another standoff with markets (SPDR S&amp;P 500 (SPY US)) .


Silicon Valley Bank: Some Observations on Contagion, Moral Hazard, and Monetary Policy

<ul>
<li>Despite the S&amp;P 500 Index <a href="https://www.smartkarma.com/entities/spdr-s-p-500-etf-trust" target="_blank" data-smartkarma-citation="entities:763:1" rel="noopener">SPDR S&amp;P 500 (SPY US)</a> declining to the 200-day average, the VIX Index has fallen by a whopping 20% during the last nine trading days.</li>
<li>Realized volatility has dropped below 15 and is the lowest in more than a year, driven by a rising economic surprise index and lower perceived earnings-related uncertainty.</li>
<li>However, our Volatility Heat Map and the direct link between the MOVE Index and stock market valuation reveal current equity market calmness comes with at least a whiff of complacency.</li>
</ul>


Despite the S&amp;P 500 Index SPDR S&amp;P 500 (SPY US) declining to the 200-day average, the VIX Index has fallen by a whopping 20% during the last nine trading days.
Realized volatility has dropped below 15 and is the lowest in more than a year, driven by a rising economic surprise index and lower perceived earnings-related uncertainty.
However, our Volatility Heat Map and the direct link between the MOVE Index and stock market valuation reveal current equity market calmness comes with at least a whiff of complacency.


Equity Market Complacency? Why the VIX Index Is Trading Below 20

Market Intelligence, ORTEX

ORTEX Market Intel

Market Intelligence

Global Financial Data and Analytics Platform

ORTEX

ORTEX is a global financial data and analytics platform providing real-time securities lending and short interest data, index rebalance data, holdings and insider transactions, trading signals, corporate actions and news,  stock machine learning and factor scores and other analytics. The majority of the data are downloadable and accessible through APIs.

Equity Derivatives

Bread Financial Holdings  / Equity Derivatives

<ul><li>Earnings season forced options markets to extremes this week.</li><li>Put/call ratios hit 52-week records across dozens of names - often in stocks simultaneously posting double-digit gains.</li><li>The divergence between rising prices and surging put demand was the defining theme of the Aug 3-10 period.</li></ul>

Earnings season forced options markets to extremes this week.Put/call ratios hit 52-week records across dozens of names - often in stocks simultaneously posting double-digit gains.The divergence between rising prices and surging put demand was the defining theme of the Aug 3-10 period.

Options Weekly: Bears Hedge Rallies as Earnings Season Drives Extreme PCR Readings

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

Macroeconomics

<ul>
<li>Core PCE increased 6.9%MoM (annualized) in Jan'23, and hence was up 4.71%YoY, moving further away from the FOMC's 2%YoY target (rather than edging towards it as had been expected). </li>
<li>M2 growth averaging 18.2%YoY in Mar'20-Feb'22 (vs a pre-Covid average of 6.8%YoY in the previous 60 years) is the cause. FedFunds must rise to 5.5% by May'23 to compensate.</li>
<li>Severely inverted yield curve indicates that a recession (from Q2CY23 onward) will also help generate slack, taming inflation. Any delay in recession's onset will entail even more rate hikes. </li>
</ul>


Core PCE increased 6.9%MoM (annualized) in Jan'23, and hence was up 4.71%YoY, moving further away from the FOMC's 2%YoY target (rather than edging towards it as had been expected). 
M2 growth averaging 18.2%YoY in Mar'20-Feb'22 (vs a pre-Covid average of 6.8%YoY in the previous 60 years) is the cause. FedFunds must rise to 5.5% by May'23 to compensate.
Severely inverted yield curve indicates that a recession (from Q2CY23 onward) will also help generate slack, taming inflation. Any delay in recession's onset will entail even more rate hikes. 


US: Inflation Shock Implies More Rate Hikes Needed Even as Recession Looms

<ul>
<li>There still is an abundance of inflation out there. Eurozone 'Supercore' inflation has not peaked and is now at 6.0%, while US Core PCE stunned markets by accelerating.</li>
<li>The S&amp;P 500 Index <a href="https://www.smartkarma.com/entities/spdr-s-p-500-etf-trust" target="_blank" data-smartkarma-citation="entities:763:1" rel="noopener">SPDR S&amp;P 500 (SPY US)</a>  has closed within 1% of the 200-day moving average. Dropping below it, would trigger another sell signal.</li>
<li>The 2-year US Treasury Yield has made news high, but stock market valuation has not followed, providing additional downside for equities. <a href="https://www.smartkarma.com/insights/yields-up-add-another-10-downside-for-stocks" target="_blank" data-smartkarma-citation="insights:96301" rel="noopener">Yields Up? Add Another 10% Downside for Stocks!</a> </li>
</ul>


There still is an abundance of inflation out there. Eurozone 'Supercore' inflation has not peaked and is now at 6.0%, while US Core PCE stunned markets by accelerating.
The S&amp;P 500 Index SPDR S&amp;P 500 (SPY US)  has closed within 1% of the 200-day moving average. Dropping below it, would trigger another sell signal.
The 2-year US Treasury Yield has made news high, but stock market valuation has not followed, providing additional downside for equities. Yields Up? Add Another 10% Downside for Stocks! 


Weekly Market Monitor Week 8 - Sticky Inflation, Moving Average Anxiety, and the Bond Yield Issue

United States

SPDR S&P 500 ETF Trust is an exchange-traded fund incorporated in the USA. The ETF tracks the S&P 500 Index. The Trust consists of a portfolio representing all 500 stocks in the S&P 500 Index. It holds predominantly large-cap U.S. stocks. This ETF is structured as a Unit Investment Trust and pays dividends on a quarterly basis. The holdings are weighted by market capitalization.

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SPDR S&P 500 (SPY US)

Silicon Valley Bank: Some Observations on Contagion, Moral Hazard, and Monetary Policy

After the US Treasury and Federal Reserve intervention, where are we now on contagion risk and monetary policy after the Silicon Valley Bank demise?

Jeroen Blokland

Equity Market Complacency? Why the VIX Index Is Trading Below 20

Equity investor complacency is back! At least a bit. The lowest realized volatility in over a year does not explain the existing gap between the...

Jeroen Blokland

Options Weekly: Bears Hedge Rallies as Earnings Season Drives Extreme PCR Readings

Earnings season forced options markets to extremes this week. Put/call ratios hit 52-week records across dozens of names - often in stocks...

ORTEX Market Intel

US: Inflation Shock Implies More Rate Hikes Needed Even as Recession Looms

M2 grew 18.2%YoY in Mar20-Feb22; its 1.3%YoY decline in Dec'22 didn't stop a 6.9%MoM annualized rise in core PCE in Jan23. Fed Funds rate needs to...

Prasenjit K. Basu

Weekly Market Monitor Week 8 - Sticky Inflation, Moving Average Anxiety, and the Bond Yield Issue

Every week, the True Insights Weekly Market Monitor keeps you updated on the biggest developments driving financial markets. Not just good stories...

Jeroen Blokland

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