This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.
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1. Russia/Ukraine: What Now?
- A week after the event, it is clear that the Trump/Putin summit presented the latter with a big win at little, if any, cost.
- Donald Trump is unlikely to come up with anything that will bring Mr Putin to the negotiating table in good faith once his latest two-week ‘deadline’ expires.
- Furthermore, Mr Trump remains philosophically inclined to favour Russia, a leaning that probably poses a greater risk to Kyiv than Mr Putin himself does.
2. HEW: Policy Under Pressure
- President Trump’s attempt to fire Governor Cook, potentially gaining a supportive majority on the Fed, raises the risk that US policy overstimulates the economy.
- Policy peers should not be pressured to mirror mistakes. The ECB faces data that keep accumulating hawkish pressures, but others are more susceptible, like the BOK.
- Non-farm payroll data provide the last hope of blocking a Fed rate cut in September. Meanwhile, a rise in EA inflation to 2.1% should help rule out another ECB rate cut.
3. DeFi, On-Chain Truth, and the Petrodollar 2.0
- Founder of the DeFi Report and Web3 Strategist, NATO, shares his journey, advice for innovators, and trends shaping asset tokenization, venture capital, and AI convergence.
- Inflation report and Fed’s monetary policy decision discussed, with core inflation increasing 3.1% year over year and market pricing in a 92% chance of a rate cut in September.
- Summary of market performance, with crude falling, value rally in US equities, and Ray Dalio’s recommendation to invest in non US equities in local currency.
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4. A Monetary View on US Inflation
- The current neglect on the role played by money supply and the monetary base is, in our view a serious analytical gap
- In a nutshell, we think private money growth – defined as M2 minus monetary base- is right now in a Goldilocks phase. This augurs well for US inflation
- With the Fed inclined to ease rather than tighten, and with inflation shocks likely to prove one-off, risk assets remain supported
5. ECB Easing Transmits Need To Hold Rates
- ECB rate cuts are stimulating a trend rise in lending growth to levels consistent with no change in policy, as the monetary transmission mechanism delivers the easing.
- Activity surveys are less bullish, but reflect stagnant supply-side potential that can’t be fixed by stimulating demand, which would merely stoke the inflation problem.
- Potentially inappropriate Fed easing does not raise peer pressure like fundamental US weakness would. Domestic news dominates and supports our ECB call for no change.
6. Late 1990s Bubble Comparison to Current Cycle Requires Nuanced Analysis
- Despite the growing chorus of comparisons, the backdrop to the late 1990s equity bubble was fundamentally different from the current environment, notably in the manner of Fed policy conduct.
- During the late 1990s, Fed policy conduct was characterised by pivots, particularly after the Asian financial crisis and bailout of Long Term Capital Management, helping to prolong the equity bubble.
- Forward P/E multiples on US equities were more elevated in the late 1990s compared with current levels. Valuations have been more volatile in the current cycle, courtesy of Fed policy.
7. Proposed GST Reforms: Double Diwali Bonanza or Double Whammy?
- GST reforms are set to change with centre proposing a two-rate structure of 5 and 18 per cent
- The announcement is aimed at boosting consumption in the mid-long run, curtailing effects of current higher tariffs.
- However, timing is of utmost importance. Any delay or adverse stance on the rollout could have significant ramifications for the overall economy and the festive season.
8. To Tariff or Not to Tariff, That Is Not the Question
- How should investors judge Trumponomics? The question isn’t whether tariffs or anti-immigration policies should be imposed, but to judge their long run effects on growth, inflation and productivity.
- While it’s too early to render a full judgment of Trumponomics and his policies, it may be a case of short-term pain for long-term gain.
- The preliminary report card is mostly a case of pain and not gain.
9. Asian Equities: Eleven Robust Earnings Gainers Post Reporting Season
- Near the end of the earnings reporting season, our earnings estimate tracker identified 11 robust earnings estimate gainers – with consensus EPS estimates up across 3-month and 6-month time horizons.
- Onshore China communications and financials, HK technology, Korean and Singapore financials are the prominent “winner” sectors. Five other ASEAN sectors also figure on the list.
- Earlier, in June, we detected 16 “consistent winner” market-sectors. The earnings environment has deteriorated slightly. Of the prominent stocks, Tencent, Hana Financials and DBS Group figure in our Model Portfolio.
10. China Economics: Policy Confusion Risks Worsening Demand Slump
- Transitory factors that drove China’s stronger-than-expected growth in the first half of 2025 are starting to fade, with hits to investment and consumption demand imminent in 2H25.
- But Beijing is in a bind on its policy response: it is rolling out demand-supporting measures but it is also keen to cut excess capacity and enforce public sector frugality.
- The net impact is that economic growth to decelerate significantly in 2H25. More stimulus measures will be dribbled out but its impact will be stymied by conflicting aims and adverse
This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.
Receive this weekly newsletter keeping 45k+ investors in the loop
1. The Week Ahead – Is Trump Winning?
- Recent tariff announcements reflect cautious optimism on the US Dollar and inflation risks
- Tariff rates of 16-17% could lead to gradual pass through to prices, impacting inflation in the coming months
- Q2 GDP growth rebounded, but domestic final demand slowed, suggesting a gradual economic slowdown in the US, while Canada faces economic challenges and BoC takes a dovish stance
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2. BoE Cut Proves Finely Balanced
- Four MPC members refused to back the rate cut in August, and only one favoured a 50bp cut, but he was forced to vote for a 25bp cut to break the balanced 4:4 split.
- The group favouring a slower pace of easing may have expanded from 5:4 to 6:3, raising the hurdle to another cut. Four don’t even support the prevailing level.
- Inflation forecast revisions keep trending the profile higher. Rolling resilience in the broader data should keep the BoE on hold in November and beyond, like the ECB.
3. Briefing. Massive Jobs Restatement, Rates Go Nowhere, Apple M&A?, Earnings Updates
- New newsletter format called “The Briefing” provides quick market synopsis and company information, also available in podcast form on speedwellmemos.com
- Recent market events include S&P 500 reaching all-time high before job report and new tariffs cause market to drop, Fed considering rate cut in response to softening economy
- President Trump criticizes Fed Chair Powell for not lowering rates, Powell cautious on rate cuts to avoid inflation, history of rate mistakes highlighted
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4. Jung Chung-Rae (New Head of Ruling DPK) – Likely To Push for CGT Changes, How About Other Taxes?
- Jung Chung-Rae, a four term lawmaker, has been appointed the new head of the ruling Democratic Party of Korea (DPK) in the past week.
- His appointment as the head of the DPK party signals that there could be some changes to the 2025 Tax Reform Plan announced by MOSF last week.
- The highest probability event is that the lower threshold for major shareholders for stock capital gains tax may NOT be lowered from 5 billion won to 1 billion won.
5. EA: Resilient Retail Rebound
- Consumers need to drive activity growth as tariffs and Euro strength harm export competitiveness. Reassuringly, retail sales returned to their trend after a trimmed fall.
- Growth was broad across countries and categories, taking the annual pace 0.5pp above consensus expectations. Non-food retail is critical and the strongest of them all.
- Surveys are gloomier, especially about the future, but rarely right. Resilient real wage and employment growth can sustain brisk retail trends, preserving economic expansion.
6. HEM: One-Touch Easing
- Payrolls revisions challenge the rolling resilience seen in most other hard data releases, but seem over-weighted.
- Underlying price and wage inflation mostly track >2%, especially in the UK, which doesn’t need more rate cuts.
- Policymakers biased to ease will deliver it on a batch of bad outcomes, even if the evidence proves fleeting.
7. Separate Dividend Tax Plan in Korea: Devil Is In the Details
- A closer look at MOSF’s Tax Reform Plan for dividends suggests that it may not have a material impact on most listed companies unless the National Assembly drastically improves it.
- According to MOSF, it currently estimates that approximately 350 of the 2,500 listed companies, or 14%, could meet these requirements (two main dividend tax reduction requirements).
- We provide a list of 70 companies in the Korean stock market with 40% or higher dividend payouts (excluding companies with smaller market caps).
8. 80% Of Our 2025 Calls Are Working
- Only one of our non-consensus macro calls are not working and eight of eleven markets are moving our directions.
- Our latest business cycle indicator assessment points to a better second half.
- 2025 Investment Strategy maintained. We are overweight equities and underweight government bonds.
9. This Will Not End Well, But When?
- The U.S. stock market is undergoing a frothy advance. The intermediate trend is bullish but some technical warnings are appearing.
- We can’t predict the exact nature or timing of a possible market disruption.
- Investors may find it prudent to opportunistically take advantage of the relatively low implied volatility environment to buy cheap downside protection.
10. Rising Ringgit, Eroding Fundamentals
- BNM’s heavy reliance on FX forwards created $29 billion in off-balance sheet liabilities, masking true reserve strength and exposing future repayment risks if inflows weaken.
- This is further compounded by a narrowing current account surplus, while capital outflows and rising foreign currency deposits reflect persistent financial account weakness, undermining long-term support for the ringgit.
- While China is Malaysia’s largest trade partner, the U.S. is the main source of trade surpluses. Worryingly, the U.S. recently imposed a 19% tariff, threatening this critical surplus engine.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.
Receive this weekly newsletter keeping 45k+ investors in the loop
1. The art of the turnaround: investing in companies at a crossroads
- Magellan in the Know podcast discusses consumer sector turnaround opportunities
- Definition of a successful turnaround and examples of companies that do and do not meet the criteria
- Importance of consistent investment philosophy and focus on protecting against permanent capital loss
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2. EM Fixed Income: Summer catch-up as spreads catch-down
- EM sovereign credit markets are a key focus
- Overall risk environment for EM is being closely monitored, with a more neutral stance on EMFX rates and corporates
- Tariffs and ongoing tariff uncertainty are major drivers in the coming weeks, with markets having ground better despite potential downside risks in growth
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3. Opec: Twist Or Stick?
- The further acceleration by ‘Opec+ eight’ in unwinding the second package of voluntary output cuts was a surprise, albeit one that left markets unmoved.
- The cartel now appears to be firmly on track to complete its unwinding in September, even though its stated justifications for increasing output remain highly questionable.
- Despite downside global growth risks, the Saudis in particular may press to start unwinding the first package, a move which may be announced as early as next week.
4. Ep. 318: Brad Setser on Trump Tariffs, China’s Surging Surplus and Dollar Policy
- Brad Setzer is an expert in global trade, capital flows, and sovereign debt restructuring
- He has been involved in various government positions related to international economic analysis
- Setzer discusses the rapid rollout of tariffs under the Trump administration and their potential impact on the economy
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5. ECB Job Tightened By Jobs
- The EA labour market proved tighter than the ECB expected in Q2 as the unemployment rate held at a downwardly revised 6.2%. That is hawkish news to its neutral stance.
- Most countries still face falling unemployment, suggesting monetary conditions were slightly loose, and avoiding pressure to lower underlying inflation further.
- A hawkish domestic surprise should keep the ECB on hold, especially with the US trade policy risk fading. Passthrough of past cuts may mean the ECB needs to hike later.
6. EA: Sticky Summer Inflation
- The ECB’s victory party can continue for another month, as inflation proved surprisingly sticky at the target. But the hangover is disappointing, amid broad-based upside news.
- Two-thirds of national outcomes exceeded our expectations, with a slight skew higher, and pressures concentrated in services. Seasonal travel parts would be payback-prone.
- Another upside surprise to the ECB’s forecast makes the profile likely to shift higher in September. The news is the opposite of what is needed for another rate cut.
7. Activity’s Tariff Hangover In Q2
- GDP growth broadly beat expectations again in Q2 on both sides of the tariff disruption. Euro area growth slowed by less, while the US rebounded vigorously.
- Temporal distortions to demand didn’t open up slack as European supply growth stays stagnant. Surveys suggest it won’t appear in Q3 either as demand growth rebounds.
- Underlying US GDP growth may have slowed, but the extent is modest and questionable. Rolling resilience should keep delaying rate cuts, preventing them from occurring.
8. Disappointing New Korean Tax Policies (Dividends, Capital Gains, and Corporate Taxes)
- The Korean government announced disappointing new tax polices for dividends, capital gains, corporate, and higher transaction taxes on securities transactions.
- The new tax policies announced today is likely to have the biggest negative impact on the Korean financials with high dividend yields.
- They will also likely to negatively impact other high dividend yielding stocks in Korea.
9. HEW: Atlantic Jobs Divide
- Depressing revisions to US payroll data clash with the resilience seen in other data, and compare poorly with the bullish revisions to the Euro area’s labour market.
- Jobs data challenge the Fed’s patient posture, while the Euro area’s sticky inflation and tighter labour markets should encourage it to keep rolling rate cuts later.
- Thursday’s BoE decision sets unemployment’s rise against inflation persistence, leaving the outcome uncertain, yet it is likely to yield another split vote for a rate cut.
10. UK: Loans Secured Despite Tax Hike
- Credit extended its rebound far beyond expectations in June. Reformed stamp duty raises costs and housing tenure, but it hasn’t broken the housing or mortgage markets.
- Demand for loans looks more resilient than banks expected amid easing monetary conditions. Refinancing may not have much effect on cash flow anymore.
- Higher transaction costs probably won’t break expectations into a downwards spiral, but are now widely cited as a major hurdle, contributing to slower UK activity growth.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.
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1. HEW: Payrolls Waking Up Rates Pricing
- Dovish rate pricing had been ignoring resilient data until US payrolls delivered a rude awakening. We believe rates remain too dovish relative to reality and equity prices.
- BoE surveys also revealed resilience in defiance of dovish pricing, while the rise in EA unemployment merely matched ECB forecasts and was heavily reliant on Italy.
- Next week’s deadline for US tariffs is the main risk event, as not all countries will likely get an extension. Monetary policy decisions come from the RBA, RBNZ, BNM, and BOK.
2. Mid-Year Themes Review – Part I
- How did our major investment themes do so far in 2025?
- Review of the performance of the major markets and asset classes we focus on
- We revisit our outlook for each of those asset classes for H2 25
3. BoE Surveys Sustain Resilience
- The Decision Maker Panel and Credit Conditions Surveys remained resilient. Price and wage inflation are stuck at excessive levels, and US trade policy makes little difference.
- Default rates are falling while the availability and demand for credit are rising to reveal a loosening of monetary conditions. There is no evidence of policy being too tight.
- Inflation and labour market data matched BoE forecasts from May, when most members were biased to slow easing. Resilient surveys should discourage it from cutting again.
4. Oil: Revisiting My Forecast
- Oil supply is projected to outpace demand growth through 2026, leading to rising inventories and sustained downward pressure on Brent crude to below USD60pb.
- Opec+ output increases, quota disputes (especially with the UAE), and the potential unwinding of voluntary cuts could further flood the market.
- US shale producers and international oil companies are reducing investment due to lower prices, but current Brent levels are not yet low enough to force significant cuts.
5. Korean Holdcos Vs Opcos Gap Trading Opportunities in 3Q 2025
- In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 3Q 2025.
- A whopping 87% (33 out of 38) holdcos/quasi holdcos outperformed their opco counterparts in the past three months, which is one of the best ever in the past two decades.
- This appears to be one of the classic “buy the rumor, sell the news” trading opportunities.
6. Gap Trade Opportunities in Korean Prefs Vs Common Share Pairs in 3Q 2025
- In this insight, we discuss numerous gap trade opportunities involving Korean preferred and common shares in 3Q 2025.
- In particular, five pairs of common and preferred stocks have experienced more than 20% widening of their share prices in the past six months.
- These companies (Doosan Corp, Mirae Asset Securities, KIS Holdings, Daishin Securities, and LG Chem) are more likely to revert to closing their gaps in the coming weeks.
7. EA: Calm At The Inflation Target
- An unsurprising achievement of the 2% target might urge a celebration at the ECB, but it does not demand policy action. Energy price declines can’t be relied upon to repeat.
- The early consensus forecast was surprised on the upside, but raised by last week’s releases in France and Spain. So, while reassuring, this outcome is not dovish.
- We expect inflation to stay close to the target, whereas the ECB forecasts a substantial drop below it, while calling policy well-positioned. We still see no more rate cuts.
8. Calm Before the Currency War? Central Banks Go Their Separate Ways
- European central banks have embraced a more preemptive approach compared to the Fed in responding to the looming arrival of tariffs under the Trump administration.
- The Bank of Japan refuses to raise interest rates, despite rising core consumer price inflation, due to uncertainty about tariff negotiations with the US. Quantitative tightening will pared in 2026.
- The People’s Bank of China (PBoC) has only modestly lowered policy rates. The Fed’s future policy rate cuts could determine the timing and scope of future PBoC policy easing.
9. Mid-Year Themes Review – Part II
- How did our major investment themes do so far in 2025?
- Review of the performance of the major markets and asset classes we focus on
- We revisit our outlook for each of those asset classes for H2 25
10. H2 ’25 Outlook: Modest H2 After Strong H1. Themes: Trade, Consumption, Tech Spending, Yields
- In H1, Asia climbed several walls of worry. Valuations are slightly higher than long-term average. H2 could be more modest, as export driven growth moderates and trade agreements become contentious.
- Our end-2025 targets are: MXASJ 850, SHCOMP 3760, Sensex 85000, HSI 26000, KOSPI 3400, TWSE 23500, Strait Times 4200, JCI 7450, SET 1150. Overweights on Korea, HK/China, India, continue.
- Asian currencies should continue to appreciate, driving more FII flows. Benign inflation and headroom for monetary easing are key tailwinds. We expect two rate cuts by the Fed in 2025.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.
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1. Defence Spending Is Not Stimulative
- NATO raised its target for defence spending to 5% of GDP, with Spain opting out. This increases pressure for tighter monetary conditions than were otherwise appropriate.
- Defence spending offers weak growth multipliers, so the policy is more likely to stoke deficits than productivity. Central banks may respond with a more hawkish stance.
- With debt levels already high, the move risks crowding out other spending and lifting sovereign risk premiums. Bond yields suffer from higher deficits and future rates.
2. Israel/Iran/US: Ten Pointers
- Recent events have highlighted the difficulty in predicting the progression of the Iran/Israel conflict.
- Despite this, the volatility caused by these headlines has not significantly impacted market perspectives.
- The supply/demand equation remains the primary influence on market thinking regarding oil.
3. Top 10 Korean Stock Picks and Key Catalysts Bi-Weekly (20 June to 4 July 2025)
- In this insight, we provide the top 10 stocks picks and key catalysts in the Korean stock market for the two weeks (20 June to 4 July 2025).
- Kakaopay was the best performing stock in KOSPI in the past two weeks. It could be a key potential beneficiary of the increased use of stablecoin based system in Korea.
- The top 10 picks in this bi-weekly include S&T Holdings, Samsung Life Insurance, Samsung SDS, Samsung Securities, Hyundai Elevator, SK Hynix, Paradise, Hanwha System, Hanwha Aerospace, and Korea Kolmar.
4. The New OS for Quant Finance: OpenBB, AI Agents & the Death of Legacy Terminals | New Barbarians …
- Isan Sarakil is the Chief Product Officer at OpenBB, a platform that provides advanced analytics to every investor.
- OpenBB is tearing down old walls of legacy market data systems and utilizing AI to change the way markets are understood and traded.
- Isan discusses OpenBB’s journey and how new tools can give investors an edge in analyzing complex financial data, such as the Fed’s communications.
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5. Asian Equities: Absolute and Relative Valuations – Spotting Mean Reversion Opportunities
- We take a detailed look at forward PE multiples, absolute and relative to Asia, of all Asia ex Japan markets. North Asia is in line with average valuations, India expensive.
- Juxtaposing valuations in comparison to history with the earnings environment of each market, we arrive at conclusions about which market should rerate and which should derate.
- We posit continued rerating for Korea and Philippines. India should derate. HK, Taiwan, Indonesia and Singapore could rerate modestly. Malaysia and Thailand are cheap but seem destined to remain so.
6. A Sharp Increase in the Lending Balance of Korean Stock Market Suggests A Pull-Back
- In our view, the sharp increase in the lending balance is one of the signs of many investors preparing for a pull-back in the Korean stock market.
- The lending balance of the Korean stock market surged from 47.3 trillion won on 2 January 2025 to 90.4 trillion won as of 20 June 2025.
- The rising lending balance in the Korean stock market could be construed as a bearish sign.
7. India – Reasons To Overweight
- Overweight, Indian equities with a bias towards industrials, property and consumer stocks.
- Trading Post hopes you took advantage of last year’s correction to buy into India, as recommended. If not, there is time.
- Investing in India is ultimately about the domestic story. Business cycle indicators are improving, and the multi-year structural growth narrative remains compelling.
8. Steno Signals #202 – Peak WW3 Fears Return!
- Over the weekend, oil traders dusted off their Strait of Hormuz crisis playbooks—and once again, they overplayed their hand.
- Saturday’s U.S. strike inside Iran sparked a sharp wave of geopolitical anxiety, turbocharged by Iran’s retaliatory missile barrage and the familiar threat from Tehran’s Parliament to shut down the Strait.
- Add a few “Hormuz closed?” headlines and prediction markets went into meltdown, briefly treating a full blockade as the base case.
9. Global Rates: Monthly Inflation Outlook
- U.S. inflation expected to accelerate over the next few months, with core inflation forecasted to rise to 3.8% by December
- Trade policy and geopolitical risks, such as the potential for oil prices to spike, are factors supporting front end tips breakevens
- Euro area inflation data shows softening trend, with core inflation falling to 2.3% in May, impacted by factors like timing of Easter holidays
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10. Growth Broadly Back In The Black
- PMI recoveries extended in June, taking averages above 50 as manufacturing is its strongest since Sep-22, and services almost align with its averages of recent years.
- The UK survey balances suffered from bad vibes, so they are the primary beneficiary of sentiment improving. Their recovery can extend further as vibes improve.
- Broad expansion helps labour demand to keep pace with supply, denying doves proof of a disinflationary demand shock. Without that, cuts roll later and may not resume.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.
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1. US vs EU: Mutually Assured Destruction?
- Section 899 is generally understood to be about leverage and deterrence.
- It is unlikely to be fully implemented due to the potential harm it could cause to the US.
- There are concerns about what could happen if the EU challenges this approach or if it is partially intended as a method to raise revenue.
2. Lee Jae-Myung Becomes the New South Korean President – Four Investment Themes That Could Outperform
- Now that Lee Jae-Myung has become new South Korean President, the uncertainty revolving who will lead South Korea in the next five years is now over.
- In this insight, we discuss four investment themes (related to Lee Jae-Myung becoming the new South Korean President) that could outperform the market for the remainder of 2025.
- The four investment themes include Korean Holdcos/Quasi Holdcos, Korean Cultural Contents, Securities, and SK Group Companies.
3. EA: May Be Disinflation’s Return
- Negative payback in services inflation dragged the headline EA rate down to 1.92% in the May flash. Although only 7bps low on the day, releases last week had cut 0.1pp.
- Inflation now looks set to spend a few months below the target rather than at or even above it, as had seemed likely until recently. This is not because of re-rooted imports.
- Euro appreciation and low energy prices have expanded the ECB’s room to cut rates, but we still see June as the final one amid tight labour markets and peers backing away.
4. HEW: Poorly Positioned Doves
- The ECB was even more hesitant to signal cuts than we expected, with the level after the unsurprising cut now deemed well-positioned. Cuts will require downside news.
- Disinflationary surprises across the Euro area in the May flash releases are already embedded in that assessment. Doves are poorly positioned for this reaction function.
- US inflation data may be the most crucial global release next week, although the signal may not be clear. Statistical issues affect the UK labour market and GDP data.
5. The Art of the Trade War: XI WATCHES AS TRUMP SERVES TACOS
- President Xi agreed to discuss issues including rare earths, chip design restrictions, and Chinese student visas with President Trump. China warns the US on its increased arms shipments to Taiwan.
- The auto industry is facing disruptions in production due to shortages of rare earth metals.
- The headline noise is starting to lose its luster as soft and hard data signals begin to pressure markets again.
6. HONG KONG ALPHA PORTFOLIO (May 2025)
- The Hong Kong Alpha portfolio underperformed its benchmark in May by 3%, however it has outperformed Hong Kong indexes by 3 to 19% since its launch 8 months ago.
- We continue to increase portfolio exposure to the consumption sector. We have added Alibaba Pictures (1060 HK), ZhongAn Online P&C Insurance C (6060 HK) & Sun Art Retail (6808 HK).
- At the end of May we sold positions in Kingsoft Corp (3888 HK) and Topsports International Holdings (6110 HK). We reduced Lingbao Gold Co Ltd H (3330 HK) .
7. Lee Jae-Myung’s 20 Trillion Won+ Supplementary Budget: Free Money, Don’t Worry and Be Happy
- One of the major policies that Lee Jae-Myung’s new administration is likely to push through is the 20 trillion won (US$15 billion)+ supplementary budget.
- The aim of this policy is to revive the sluggish domestic economy. It is a classic “spend first, worry later” government policy.
- The supplementary budget is basically sacrificing the balance sheet of the entire South Korea at the expense of short term economic stimulus which may have just limited impact.
8. Don’t Buy That TACO Just Yet
- The U.S. Court of International Trade unanimously ruled against the Trump Administration and struck down a whole range of tariffs by citing a lack of authority.
- In reaction, President Trump doubled down by opposing and appealing the decision. The government has workaround options in light of the court decision: The trade war will continue.
- Investors should continue to tilt toward the “Sell America” trade by avoiding USD assets. The court decision prolongs and exacerbates the uncertainty over the effects of the trade war.
9. US – Buy On Dip
- We maintain a buy. The sectoral weightings favour industrials, tech hardware, banks, traditional energy, defence and going into the second half of the year consumer discretionary and AI software companies.
- The US is neither headed for a full-blown recession nor another cost-of living crisis.
- Neither updated business cycle indicators nor broad money growth trends signal a downturn and a resurgence in inflation.
10. HEM: Better Never Than Late
- Companies are adapting to fluctuating trade policies while maintaining strong activity and tight labour markets.
- Despite these positive trends, underlying price and wage inflation remains high.
- While markets anticipate future cuts, the potential for rate hikes in 2026 is often overlooked.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.
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1. US vs EU: Crying ‘Wolf’?
- Ursula von der Leyen had a call with Donald Trump on 25 May.
- The call can be interpreted as a ‘win’ for Trump as he had threatened to impose 50% tariffs on the EU from 1 June.
- Another perspective could be that Trump’s reversion is a new manifestation of the TACO principle.
2. More USD Depreciation on the Cards – Who Wins, Who Loses.
- US is focusing on propelling growth with tax cuts, ignoring the debt problem. The obvious consequence, more USD depreciation, could drive more money from US assets into Asia and Europe.
- If 1% of US free float market cap flows into Asia, it would constitute 7.2% of Asia’s market cap. That’s more than 5x the highest ever annual Asian FII inflow.
- Taiwan, Korea and India have seen the biggest FII flow revival. To sidestep the deleterious effect of sharp USD appreciation on Asian exports, investors should play China, India, Indonesia, Philippines.
3. Steno Signals #198 – A 20–25% Weaker USD May Solve All Trump’s Problems
- Morning from Europe.
- Trump’s classical stop-and-go approach to negotiations is starting to get baked into markets, but we’re still surprised by the extent of market moves when these impulsive threats are announced on Truth Social — and markets remain poor at assessing the “realistic outcomes” of this approach.
- On Friday, markets at one point priced in a 40–60% probability that 50% tariffs on the EU would actually take effect on June 1.
4. The Week Ahead – Big and Beautiful
- Yield steepenings may be linked to fears of fiscal profligacy and concerns of inflation expectations
- US Exceptionalism theme unraveling, dollar facing downward pressure
- US tax bill moving through House, expected to have modest stimulative economic impact
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
5. Biggest One Day Move in Higher Share Performance YTD in 2025 for Major Korean Holdcos Today – Why?
- In this insight, we provide five major factors that may have caused higher share price movements (up 7.6%) of 10 major Korean holdcos/quasi holdcos today.
- This is the best one day share price performance on average for these stocks so far in 2025.
- Emphasis on improving corporate governance by both leading Presidential candidates and potential mandatory cancellation of treasury shares are among the five major factors.
6. Overview #27 – The Big Beautiful Tragi-Comedy Continues
- A review of recent events/data impacting our investment themes and outlook
- What are major global bond markets telling us about the world?
- We look at potential beneficiaries of the next wave of inflation
7. Texas Power Play: Grid Sovereignty, Bitcoin, and the Future of AI
- The speaker discusses events surrounding the downgrade of the US economy and the response from government officials
- The speaker highlights the increasing adoption and performance of bitcoin compared to traditional assets like gold
- The discussion transitions to the business efforts and partnership of Lisa and Dan, who met at a Houston bitcoin meetup in 2021.
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8. KOSPI 200 and KOSDAQ 150 Constituent Changes Announced: A Few Surprises
- Korea Exchange announced its KOSPI200 rebalance changes on 27 May. It added 8 companies and deleted 8 companies. KRX also added 9 companies and deleted 9 companies in KOSDAQ 150.
- These 8 new inclusions in KOSPI200 are up on average 49.8% in the past one year. The 8 deletions to KOSPI200 are down on average 45.2% in the past one year.
- There were numerous surprises to the KOSDAQ150 rebalances. In particular, three companies are relative surprises to the KOSDAQ150 additions including Solid Inc, Zeus Co, and Wemade Max.
9. Asian Equities: To Sidestep ASEAN’s China Problem, Focus on Select Pockets
- ASEAN’s underperformance could continue. The low growth region is facing the additional risk of increasing Chinese exports, which could dent domestic companies’ revenues and margins and engender a deflationary spiral.
- China exports more to ASEAN than to the US or EU. Margin pressure in consumer and industrials is palpable. Thailand is in deflation and inflation is nosediving in the region.
- We recommend playing the region through markets with low China import intensity (Indonesia, Philippines) and through consumer services and select banks. We have Digiplus, DBS, BCA in our model portfolio.
10. Sell America = Buy Gold
- The Sell America investment theme is becoming as a dominant market narrative, and it’s bullish for gold.
- It is driven by the combination of rising deficits, shaky bond markets, an increasingly hawkish Fed and policy uncertainty.
- For a long-term perspective of the upside potential in gold, a point-and-figure chart of monthly gold prices shows a measured objective of almost $7,000.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.
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1. Market Intel from a Commodity Trader & China Analyst
- Discussion shifts towards the market consensus on China, highlighting a cyclical stabilization within a structural slowdown.
- China’s credit cycle, green shoots in the economy, and property market are discussed.
- Speaker shares insights on the Chinese real estate sector, mentioning a contraction and the need for new areas of investment.
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2. UK Inflation Flies Hawkish Pressures
- Our above-consensus forecast was exceeded by UK inflation flying higher in April amid administered price rises and postponed price increases due to the late Easter in 2025.
- Airfares still soared 10pp more than the norm for a late Easter, and 20pp above the April average. This stoked service and core inflation, although the median was steadier.
- We expect inflation to grind up until October, whereas the consensus assumes stability until then. Persistently excessive inflation should discourage the BoE from cutting again.
3. Top 100 Korean Firms with Highest Treasury Shares as % of Market Cap (Tender Offer and M&A Targets)
- We provide an analysis of the top 100 companies with the highest percentage of treasury shares as a percentage of market cap.
- These 100 companies are prime targets of tender offers and M&As. Many of these companies have low PBR ratios.
- Number five in this list is Telcoware (078000 KS) which just announced a tender offer by the CEO who is trying to take the company private.
4. Trump Doctrine: All Talk And No Trousers
- The US has been extremely active in the international arena in recent weeks, particularly in trade and diplomacy.
- Showmanship is currently taking precedence over substance in these activities.
- This approach poses significant risks for both policymakers and investors.
5. “What-Ifs”
- What if the proportion of core CPI categories experiencing upward inflation momentum is on the rise?
- What if the improvement in the more persistent categories of CPI inflation has more-or-less stalled?
- What if longer-term inflation expectations are no longer wiggling sideways or actually creeping higher?
6. Steno Signals #197 – The Mood(Y)’s Is Bad in the Fiat
- Morning from Copenhagen ahead of a big week.
- I was coincidentally sitting in front of the screens when Moody’s announced its downgrade of the US late in the Friday session, and the timing was admittedly peculiar—with just 5–10 minutes left of futures trading before the closing bell.
- Back in August 2023, when Fitch downgraded the US, it did spark a mild risk-off environment, with the long end of the yield curve continuing its upward trend.
7. Asian Equities: Relative Valuation Divergence Opens up Index Trade Opportunities
- A glance at the growth-adjusted valuations of the Asian markets reveals that Korea and China are undervalued and India, Thailand, Singapore and Malaysia are overvalued.
- We take a granular look at long histories of each market’s relative valuations, and their medium-term trends relative to long term averages. We combine the conclusions with growth-adjusted valuation outlook.
- We conclude that HK/China, Korea, Indonesia and Philippines could be in for rerating in the near term. Derating could be on the cards for India, Singapore and Thailand.
8. HEW: Fiscal Anxiety As Rates Rise
- Jitters over the sustainability of US fiscal easing knocked equities and the dollar over the past week. Dovish BoE pricing was pared back further towards our contrarian call.
- UK inflation exceeded our already elevated forecast, while the manufacturing PMIs were broadly resilient again in May. UK retail data were also sensationally strong.
- Next week is relatively quiet and shortened by a bank holiday. Flash inflation for some euro member states, updated US GDP data, and the RBNZ decision are our highlights.
9. Asian Equities: Taking Stock After the Result Season: Where Are EPS Estimates Rising and Falling?
- As the earnings season draws to a close, we look at Asian markets’/sectors’ EPS estimate progression during the reporting season and earlier. Specifically, we search for upward or downward inflections.
- Korea and Taiwan had the strongest EPS upgrades during this reporting season, despite the trade uncertainties. Philippines, Indonesia, Malaysia also had decent upgrades. HK/China and India continue to be downgraded.
- Korean and Taiwanese technology, Korean industrials, HK Technology Services had strong upgrades. So did Singapore and Philippines financials, and Thailand Communications – the latter two with a long upgrade history.
10. Korea Value Up Index Rebalance Announcement Next Week
- Korea Exchange plans to announce the first rebalance of the “Korea Value Up Index” next week on 27 May. The actual rebalance is expected to take place on 13 June.
- Korea Exchange plans to reduce the constituents to 100 (from 105 currently) and change 30% of the included stocks in this index to better reflect the Value Up program incentives.
- In this insight, we provide a list of 20 potential exclusion candidates and 20 inclusion candidates in the Value Up index rebalance.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.
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1. 173: The End of US Equity Dominance? With Chris Wood, Global Strategist and Author of ‘Greed and …
- US stock market dependency on world index has increased significantly, reaching around 65-67%
- Tariffs implemented by Trump have had a bearish impact on stock market
- Small cap underperformance in US market is at its highest in 25 years, leading to interesting valuation opportunities
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2. UK: Spurious H1 Surge Again
- GDP’s resurgence caught the consensus off guard, as it failed to recognise the residual seasonality still skewing activity growth into the first half of the year.
- The 0.7% q-o-q outcome for Q1 matched our forecast and leaves a powerful carry-over to Q2, where GDP seems set to exceed the BoE’s 0.1% forecast at about 0.4% q-o-q.
- Strength discourages another policy rate cut. Disappointment in H2 is the hangover, but we doubt it will motivate renewed easing amid excessive price and wage inflation.
3. USD Bears Broke The Bandwagon
- Investors ask whether threats to the USD’s reserve currency status are resting or dead, whereas we wonder if it was ever alive. Commentators routinely overextend narratives.
- The USD share of allocated FX reserves is already trending downward. A potential acceleration from smaller deficits and higher tariffs would partly offset the impact.
- Fuller hedging of USD asset holdings abroad may have already reached its limit. We still see more attractive mispricing elsewhere, such as excessively dovish rate curves.
4. HEW: Dovish Arguments Ageing Poorly
- Equity and rates market prices normalised further as data remains too resilient to prompt cuts, and US trade policy still seems to be reversing its destructive aspects.
- UK GDP boomed beyond expectations again, albeit amid residual seasonality. US CPI data were soft and stable, as companies appeared to have smoothed the tariff shock.
- Next week’s UK inflation data could compound the pressure by exceeding the consensus to reach 3.4% on the CPI. The flash PMIs and RBA decision are other timely highlights.
5. 100 days later: are all countries emerging markets now?
- Bob Gilhooly, a senior emerging markets economist at Aberdeen, joins the podcast to discuss Trump’s first 100 days in office and his key outcomes
- Trump’s focus on trade deficits and tariffs has raised concerns about revenue raising and potential impact on the U.S. deficit
- Uncertainty surrounding trade negotiations and potential outcomes continues to be a key feature of Trump’s presidency
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6. Bitcoin, Buffett, and the Barbarians at the Gate | Ep. #020 – The New Barbarians Podcast
- Market experiencing steepening yield curve, potentially indicating higher inflation and stronger growth
- Stocks rallying, with significant moves in earnings yield and small caps
- Asia and Europe markets up, Dow, S&P, Nasdaq, and Russell all posting gains; Gold and Bitcoin down, Oil up, Vix down
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7. UK: Tax Not Breaking Cost Pressures
- Underlying unemployment rates are broadly stable, despite higher headline and underemployment rates, where the latter lacks relevance to disinflationary pressures.
- Activity levels are expanding healthily and redundancies fell in April, suggesting no substantial jobs impact from the NICs rise, contrary to dovish fears.
- Wage growth should slow to accommodate some of the tax cost increase, but there isn’t much evidence yet. Total pay growth is little changed in recent years.
8. Steno Signals #196 – What’s next for inflation given the US/China pause?
- On the heels of the US/China “pause” announcement in the trade war, here’s a quick take on market implications and what to watch next:The initial market reaction has probably been more muted than many anticipated.
- Bond yields ticked slightly higher, gold softened, and there were modest tailwinds for regions and countries previously hammered by tariff exposure following yesterday’s “deal” in Geneva.
- But beneath the surface, several dynamics warrant a closer look.
9. The Drill – When the Facts Change, So Do We
- Greetings from Copenhagen.
- The global macro landscape is shifting rapidly, with U.S. policy priorities evolving just as quickly.
- The administration is now 1) refocusing on the Middle East, 2) signaling that a Ukraine–Russia deal is inching closer, and 3) initiating currency policy discussions with Asian nations—many of which are active FX manipulators.
10. US Inflation Trends Stick Against Tariffs
- A marginal downside surprise in headline US inflation measures preserves uncomfortably excessive trends, even without a significant tariff shock and with ongoing airfare falls.
- Companies may have helpfully smoothed out the tariff shock such that volatile policy never hits consumers. Services (ex-shelter) continued to grow too rapidly for rate cuts.
- Being in the right ballpark of the target isn’t good enough when the labour market remains tight. At least core price and wage inflation in the US isn’t as bad as in the UK.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.
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1. US vs EU: Worse to Come
- Policymakers and investors are not fully recognizing the threat posed by the US in response to ‘Liberation Day’.
- The threat level has increased as ‘transactional Trump’ is replaced by a new president.
- The new president aims to return the US to a perceived golden era in his mission to ‘make America great again’.
2. Investors Have that “Oh Sh#t Moment” – Part 2: Trading Opportunities.
- Act 1 of the US bear market is likely complete, with diverging price signals from stocks, bonds and the dollar.
- This will be a rebound bounce to sell into, as we are not going back to previous highs.
- Looking at companies servicing high-income consumers is a good hunting ground for shorts.
3. US Bear Market: THIS TIME IS DIFFERENT!
- The US dollar and US treasuries are no longer a safe haven in the wake of the US market sell off.
- Tariffs undercut primary reasons for foreigners to buy and hold US dollar assets, including recycling of export earnings by foreign countries. Lower consumption and higher inflation are additional headwinds.
- Foreign holdings of US stocks and debt will decline as the US isolates itself from the global trading system.
4. UK: Spillover effects from US tariffs
- The UK output destroyed by reciprocal US tariffs is only partly due to the direct impact of the new 10% rate (worth ~0.2% of GDP) and generally weaker US prospects (0.1%).
- Global GDP growth is depressed by this policy, indirectly destroying demand for UK exports from elsewhere (0.2%), especially if countries harm themselves by retaliating.
- An overall 0.6% GDP hit has two-sided risks and a skew lowered by likely negotiations. Fears of items dumping into the UK market are overblown excuses for protectionism.
5. Trump, Tariffs, and Trade Wars
- President Trump’s radical tariff measures will usher in a new era of greater volatility, slower growth, financial stresses and geopolitical downsides.
- The coming weeks will be marked by uncertainty as the domestic political pushback in the US interacts unpredictably with retaliation by trading partners and the economic fallout.
- In Asia, monetary easing can mitigate only part of the impact. Fiscal policy is needed but is constrained in most of the region, given pre-existing debt and deficits.
6. Smart Coffee: 7 April 2025
- An interesting day for the market after the announcement of tariffs previous day.
- When analyzing this market move, it may help to look at the countries affected by tariffs in terms of the amount of tariffs (fig. 1, fig 2.). vs the movement on the main indices in that country.
- Many impacted indices are 5% to 10% in the red in April as a result, including the EU indices.
7. A Big Bear, or Just A Plain Vanilla Correction?
- The latest Trump tariff announcements have sparked a risk-off stampede.
- Even though the macro and fundamental backdrop is deteriorating, sellers are becoming exhausted and a relief rally should materialize in the coming week.
- Both the top-down outlook and technical structure of the stock market argue for a bear market, and any rally should be interpreted as a countertrend move.
8. Steno Signals #192 – A March 2020 style reset. Is this a liquidity event?
- Happy Sunday from Copenhagen, if I am allowed to say that after a horrendous week in markets.
- Markets are heading into a tense week as the U.S.-China trade tensions escalate and Europe appears poised to introduce digital tariffs — likely targeting the Magnificent 7 — in response to Trump’s proposed tariff agenda.
- By late Friday, the U.S. dollar surged sharply, accompanied by early signs of capitulation in traditional safe-haven assets like gold and Treasuries.
9. Crafting Investment Policy in an America First World
- If Trump succeeds in his America First policy, the new winners will be America’s suppliers of labour. The obvious loser under Trump’s win-lose worldview will be the suppliers of capital.
- The investment environment in an America First world will be riskier. Expect more sovereign defaults and restructurings.
- The benchmark portfolio under the new regime should be a basket of global assets.
10. UK: GDP Seasonal Surge Before Slowing
- Fundamental causes should not be assigned to UK GDP surging far beyond consensus expectations again in February, despite the notability of Q1 growth tracking 0.7% q-o-q.
- Residual seasonality has dominated the post-pandemic growth profile, and the recent resilience merely matches it. Stagnation for the rest of the year is the consequence.
- Disruptive and volatile US trade policy will also depress the underlying economic trend beneath the spurious seasonals. We now bake both more fully into our modal forecasts.