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.

Rising Input Costs Pose Threats to US Profit Margins and Inflation, but Secular Degradation Unlikely

Misguided US Stimulus Offers Little Help to Supply-Side to Offset Potential Inflation Risks

Global Economist, DeSaque Macro Research

Said Desaque

Global Economist

Macroeconomics

<p>US equities faced headwinds in September, but compression in valuations has been difficult due to the relatively benign action in US Treasury bond yields up until the final week of the month. The Q-ratio has surged to an all-time high due to abundant liquidity, thereby imparting a potential warning signal to investors.</p>
<div>The ability of the Q-ratio to remain above 1 raise questions about the ability of new entrants into industries to overcome barriers to entry and to withstand the risk of being taken over by existing firms. Leadership of the US equity market by dominant technology companies has raised the issue about abuse of market power via anti-trust practices. The latest Economic Census by the Census Bureau does not appear to validate the popular perception that the technology sector has become concentrated in terms of market structure, while the data also indicates that low concentration industries have boosted their share of aggregate output since 2002.</div>
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<div>Equity investors do not need to fear Fed policy next year, but testing times will emerge once short-term interest rates offer compelling competition to dividend yields, an outcome expected in 2024. Delays in resolving fiscal policy issues could impact the timing of asset tapering by the Fed, particularly if there is tightening of US financial conditions due to political gamesmanship over fiscal policy.</div>
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<div>Labour dominates corporations' production costs and the case for sustained higher inflation hinges critically on lacklustre labour productivity, particularly in manufacturing as imports become less of a safety valve. The return of productive manufacturing capacity to the US and slowing labour force growth increase the incentive for companies to invest in productivity-enhancing combinations of capital and labour to bolster productivity in order to reverse the prolonged period of malaise since 2000.             </div>

US equities faced headwinds in September, but compression in valuations has been difficult due to the relatively benign action in US Treasury bond yields up until the final week of the month. The Q-ratio has surged to an all-time high due to abundant liquidity, thereby imparting a potential warning signal to investors.
The ability of the Q-ratio to remain above 1 raise questions about the ability of new entrants into industries to overcome barriers to entry and to withstand the risk of being taken over by existing firms. Leadership of the US equity market by dominant technology companies has raised the issue about abuse of market power via anti-trust practices. The latest Economic Census by the Census Bureau does not appear to validate the popular perception that the technology sector has become concentrated in terms of market structure, while the data also indicates that low concentration industries have boosted their share of aggregate output since 2002.

Equity investors do not need to fear Fed policy next year, but testing times will emerge once short-term interest rates offer compelling competition to dividend yields, an outcome expected in 2024. Delays in resolving fiscal policy issues could impact the timing of asset tapering by the Fed, particularly if there is tightening of US financial conditions due to political gamesmanship over fiscal policy.

Labour dominates corporations' production costs and the case for sustained higher inflation hinges critically on lacklustre labour productivity, particularly in manufacturing as imports become less of a safety valve. The return of productive manufacturing capacity to the US and slowing labour force growth increase the incentive for companies to invest in productivity-enhancing combinations of capital and labour to bolster productivity in order to reverse the prolonged period of malaise since 2000.             

流動性によりQレシオは過去最高に上昇、製造業の生産性がインフレに重要となる