CoreMacro

Special Report

The dollar is not being replaced by a single rival, it is being diluted by a rising cast of “other” reserve currencies. This report identifies the hidden winners of reserve diversification and why they may matter more than investors think.

MacroQuant recommends underweighting equities and adopting a benchmark duration stance in fixed-income portfolios. The model is very positive on the US dollar, bearish on gold, neutral on copper, and bullish on oil.

The equity bull market is getting long in the tooth. Bonds should perform well once economic growth begins to slow. The dollar will strengthen over the coming months before resuming its downtrend. While crude has likely found a near-term floor, we favor metals over energy in the long run.

Special Report

China holds a structural advantage in this "Age of Electricity" by operating the world's largest electricity system. However, this advantage has inherent limits, and the US remains competitive despite its challenges.

Korea’s recent equity market tantrum is a warning signal for global risk assets. We are booking profits on the long Asian semiconductor stocks / short US hyperscalers trade and downgrading Korea from overweight to neutral in an EM equity portfolio.

Special Report

Corporate health remains supportive of tight credit spreads in both the US and Europe, but a growing divide is emerging beneath the surface. Investment-grade issuers continue to strengthen, while lower-rated borrowers face mounting pressures. Credit markets are pricing resilience, leaving investors vulnerable should corporate fundamentals begin to deteriorate.

The most vulnerable households have whittled down their real debt balances while achieving significant real wealth gains. The combination has made consumption more resilient to income hiccups than in past cycles.

AI is transformative, yet tech stocks may not produce positive returns. Market cycles have not disappeared. Greed and fear will still produce large share price fluctuations. Meanwhile, US inflation is the key near-term risk. Global non-tech capex aspirations also look overstated.

We react to DM central bank meetings this week and highlight the opportunities emerging across global fixed income and currency markets.

A surefire way to make money is to buy stocks in industries experiencing shortages. AI supply-chain bottlenecks will persist for the next few years but markets will price in relief before then.