There are high odds that capex has now hit a wall and the virtuous EPS-to-capex cycle will reverse to a vicious down cycle. EPS are now contracting spelling trouble for deep cyclical high-operating leverage sectors. One of…
Since the 1980s recession, all four recessions were preceded by capex soaring to roughly a 20% annual growth rate. As historical empirical evidence had suggested, capex growth peaked near the 20%/annum mark this cycle. If the…
Export growth is an important indicator that closely tracks the ebbs and flows of global trade. When the trade-weighted U.S. dollar appreciates, it dampens trade. Currently the Fed’s trade-weighted greenback based on goods…
Highlights Portfolio Strategy Intensifying recession fears, rising risks of ineffectual monetary policy, and escalating trade policy uncertainty that is shattering corporate America’s capex plans, warn that sizable drawdown…
Highlights Global inflation will slow further, allowing central banks to ease policy. Liquidity indicators will have more upside as monetary policy will remain accommodative. Widening fiscal deficits, easing Chinese credit trends and…
Highlights Current activity indicators are now losing momentum, or outright rolling over. This confirms that European (and global) growth is now entering a down-oscillation. Why? It is the rate of decline in the bond yield that has…
GAA DM Equity Country Allocation Model Update The GAA DM Equity Country Allocation model is updated as of June 28, 2019. The quant model has upgraded Sweden to the second largest overweight (from a slight underweight) mainly…
Highlights Portfolio Strategy The risk/reward tradeoff remains squarely to the downside and we are turning cyclically (3-12 month horizon) cautious on the prospects of the broad equity market. The Presidential cycle, UBER’s IPO…
Highlights Portfolio Strategy The risk/reward equity market tradeoff is to the downside and we remain tactically cautious. The trade war re-escalation risks pushing out the global growth recovery to early-2020 and has shaken our…
Highlights Portfolio Strategy Macro headwinds, deficient demand along with rising chemicals stockpiles that have dealt a blow to industry pricing power warn that chemicals stocks are on the verge of a breakdown. Downgrade to a below…