In today’s briefing:
- The Liquidity ‘Air Pocket’: A Short Update After US Tax Filing-Week
- Global Funds Q1 Review: Benefiting from Underweights in Apple & Tesla
- Walker’s Weekly: Dr. Jim’s Summary of Key Global Macro Developments – 19 Apr 2024
- HEW: Reflating Tighter for Longer
- The Weekly Market Monitor – Rockets Roar While Hawks Take Off
The Liquidity ‘Air Pocket’: A Short Update After US Tax Filing-Week
- Global Liquidity has been the key factor driving risk assets higher. It faces a short-term air pocket that investors need to understand
- Three factors are dragging Global Liquidity — the US Fed, the PBoC and the rising MOVE Index
- Most important near-term, the US money market liquidity has suffered a major hit this week following the April 15th Tax-filing deadline. Next up the QFA at month-end
Global Funds Q1 Review: Benefiting from Underweights in Apple & Tesla
- Strong start to 2024, but majority underperform: Average returns of 7.6% lags the SPDRs MSCI ACWI ETF by -0.33%, with 44% of funds outperforming.
- USA Technology Drives Returns: US Tech sector accounts for 1/4 of total returns in Q1. China & India Financials a drag on performance.
- Apple and Tesla Positions Outperform: Underweights in both stocks help claw back losses made due to NVIDIA underweights.
Walker’s Weekly: Dr. Jim’s Summary of Key Global Macro Developments – 19 Apr 2024
- China’s GDP Performance: China’s first quarter GDP growth exceeded expectations at 5.3%, sparking debates about data accuracy and manipulation.
- Singapore’s Economic Revisions: Singapore’s initial growth estimate of 0.5% was later revised down to 0.1%, underscoring challenges in producing accurate forecasts.
- Regional Trade Dynamics: While China reported a contraction in exports, a closer look revealed modest export growth. Japan and Korea struggled with declining exports and imports, highlighting challenges in domestic demand.
HEW: Reflating Tighter for Longer
- Despite no policy decisions this week, hawkish moves continued as UK price and wage inflation exceeded expectations and FOMC comments suggested another rate hike. The belief remains that the BoE should cut later than the Fed.
- The upcoming week is expected to be quiet for monetary policy announcements, with the BOJ and Bank Indonesia being the main ones.
- The flash PMIs are the data highlight of the week, along with the Q1 GDP, March PCE and durable goods data from the US.
The Weekly Market Monitor – Rockets Roar While Hawks Take Off
- Geopolitical tensions and worries about inflation are overshadowing intrinsically bullish market sentiment and decent earnings reports.
- Contrary to what has become the latest market muse, higher interest rates do not explain the resilience of the US consumer and economy.
- China’s data dump raises serious questions about its true underlying growth momentum, suggesting that its consumers will continue to buy gold.
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