I have a meme in my mind of a person holding a stick and poking a "EM stock basket" saying "do something" :) that's how I feel following them. South America showed some life earlier this year and China finally had a bit of a move, but otherwise it's still been 'meh'. Patiently keeping an eye...
Indeed! Maybe when we least expect it... I think key catalysts are: USD weakness (where e.g. DXY breaks down out of its range-trade), China stimulus (more follow-through, bigger rate cuts), and pivot to easing by rest of EM central banks
I agree, “when we least expect it”. I am in NZ, I guess our market is EM, and remains in the doldrums with minuscule trades daily on great stocks. NZers investment funds appear to be heading to the States, lowering the NZD while tech stocks rise, possibly on the EM market investors money. I certainly fit that mould with investments in tech offsetting doldrums in NZ, tech especially favourable as exchange rates add to the gains
Basically the amount of central bank actions and monetary tightening set to hit the global economy in H2 is unprecedented in recent decades (reason H2 = the leads/lags of policy transmission)
When I opened the link from the email I got an "Outlook has detected an unsafe link. Visiting this website might not be safe" warning. After clicking continue anyway it goes through to the page (weekly SP500 chartstorm) after several attempts. It did the same last week.
It might just be having a hissy fit but it doesn`t do it for any other sites. Just thought I`d give you a heads up. I took a screen shot if you want to see.
Thanks Jon, yeah that's a "helpful feature" of Outlook -- you can either ignore it, or you can use the Substack app, or you can simply check here for the latest posts: https://www.chartstorm.info/
I have a meme in my mind of a person holding a stick and poking a "EM stock basket" saying "do something" :) that's how I feel following them. South America showed some life earlier this year and China finally had a bit of a move, but otherwise it's still been 'meh'. Patiently keeping an eye...
Indeed! Maybe when we least expect it... I think key catalysts are: USD weakness (where e.g. DXY breaks down out of its range-trade), China stimulus (more follow-through, bigger rate cuts), and pivot to easing by rest of EM central banks
PS our central bank has announced the end of tightening
first in to tightening, first out... seeing similar thing for EM central banks e.g. LatAm
I agree, “when we least expect it”. I am in NZ, I guess our market is EM, and remains in the doldrums with minuscule trades daily on great stocks. NZers investment funds appear to be heading to the States, lowering the NZD while tech stocks rise, possibly on the EM market investors money. I certainly fit that mould with investments in tech offsetting doldrums in NZ, tech especially favourable as exchange rates add to the gains
Thanks. NZ is technically categorised in developed markets
Could you make a case for the markets, sans the expected slowdown in the economy, to continue to move higher? Thank you for your insight and content.
Thanks, yes, here is a non-exhaustive list of possible bullish things:
-China stimulus (started but needs to do more)
-AI hype bubble going further than expected
-Fed pivot (but unlikely near-term)
-Shift higher in sentiment/flows/positioning (bears to bulls)
-FOMO (related to that: larger investors get dragged along and chase the bull)
-Earnings hold up better than expected (not my expectation given lead indicators tho)
-Recession signals are either wrong or get confounded by upside surprises
-Consumer/labor/real incomes/savings end up stronger than expected
-US domestic investment boom (fiscal + green + reshoring/mfg + space/robotics, etc)
-Bond yields fall, USD weakens (but for non-recessionary reasons: eases financial conditions)
That's all I can think of for now, obviously some of those are more likely than others, but I guess the takeaway is that it is possible...
What Monetary Wall for 2H?
BTW excellent content, thank you very much.
Cheers!
I can't post charts in the comments, so I have replied to this in a "note" -- see: https://substack.com/profile/30338892-callum-thomas/note/c-17885014
Basically the amount of central bank actions and monetary tightening set to hit the global economy in H2 is unprecedented in recent decades (reason H2 = the leads/lags of policy transmission)
Questions & thoughts welcome in the comments section -- p.s. what's your favorite chart?
It`s a random comment so please bare with...
When I opened the link from the email I got an "Outlook has detected an unsafe link. Visiting this website might not be safe" warning. After clicking continue anyway it goes through to the page (weekly SP500 chartstorm) after several attempts. It did the same last week.
It might just be having a hissy fit but it doesn`t do it for any other sites. Just thought I`d give you a heads up. I took a screen shot if you want to see.
Best regards,
Jon
Thanks Jon, yeah that's a "helpful feature" of Outlook -- you can either ignore it, or you can use the Substack app, or you can simply check here for the latest posts: https://www.chartstorm.info/
How to log-on to substack, FYI: https://support.substack.com/hc/en-us/articles/360059542452-How-do-I-log-into-my-Substack-account-
Thanks, sir, for your prompt reply.
All the best!
J
As far as China goes.. the art of war is deception. Appear weak when your opponent is strong.
Their situation could shift rapidly at their choosing. Position while you can, not when you have to.
Indeed, interesting perspective, a lot of history and very different culture behind the thinking over there. And correct -- China runs China for China