MacroQuant is overweight bonds, underweight equities, and neutral on cash. Within the equity universe, the model is overweight Japan, India, Brazil, the US, and the UK....
China's economy is about to experience demand-driven deflation. The lack of an economic recovery and falling producer prices will depress corporate profits and, hence, share prices. Beijing will allow the yuan to depreciate more to prop up its economy....
The economic outlook continues to deteriorate, geopolitical risks have increased, and every indicator in our recession checklist will flash red by the end of the year. The Fed will keep hiking until monetary policy becomes restrictive. Markets are still too complacent: The risk premium is very low, ...
This week’s report examines the state of the global monetary tightening cycle and addresses some frequently asked questions about the Fed’s QT program. New yield curve trades are recommended for the US and German yield curves....
This Fed is a single mandate Fed which won’t consider the job done until inflation reaches a 2% target. Concerns about slowing growth will displace concerns about inflation. Equities will bottom shortly before economic growth bottoms. Until then we recommend a defensive portfolio tilt, and offer a f...
The ECB increased interest rates and announced the start of its balance sheet wind down; yet, markets took the news as a dovish outcome. Are we really getting close to the end of the ECB’s tightening campaign? How asset prices will react?...
We remain constructive on the economy and equities in the near term because consumers show no sign of hunkering down, US homeowners are largely impervious to higher mortgage rates and our latest survey of storefront occupancies on Lower Fifth Avenue highlighted some encouraging developments....
Falling inflation will allow bond yields to decline in the major economies over the next few quarters. As such, we recommend that investors shift their duration stance from underweight to neutral over a 12 month-and-longer horizon and to overweight over a 6-month horizon. Structurally, however, a de...
Despite uncertainty and intrusive government policy, natural gas and oil markets have managed to direct much-needed supplies to Europe going into winter. Natgas markets attracted massive LNG inflows – at a cost of record-high prices – that now leave the continent’s on-land storage close to full. A f...
