The Dragon's Comeback?
Almost 22 months back, the objective of beginning this newsletter was to join the macro dots globally so that traders/investors could incorporate the macro learning to position their portfolio and generate significant alpha.
Ironically, even today, we have plenty of learned individuals focusing on individual markets on this incredible platform, but a handful of people are connecting the dots around the globe.
Post Great Financial Crisis, 2008, global central banks have acted in tandem with coordinated policy efforts being executed whenever the global economy deteriorates. Thus, focusing on the G7 Central Banks and closely follow their actions is paramount.
As a result of our global focus, in the last few weeks we were able to predict the enormous stimulus that Chinese government and Central Bank (PBoC) unleashed this week. Furthermore, the measures undertaken in China this week overshadowed all other developments in the global financial system.
We also initiated multiple positions in the last few weeks to benefit from the Chinese decisions.
Nonetheless, the risk on rally in the US Equities even surpassed our expectations. Moreover, the shallow breadth of the swift “overstretched” rally (only three stocks accounting for 75% of the gains) is a matter of concern.
The S&P 500 has rallied a mind-blowing 20% from its October lows, and the tech-heavy QQQ has rallied an unbelievable 24%!
Interestingly, the relentless rally was led by cyclicals, with XHB rallying a whopping 36%!
Today, we will look at some new indicators (US) we have integrated into our macro analysis and decipher the way ahead for China and Japan.
We will also have more structural macro analysis with proprietary tools and charts in the future.
Hope that you will enjoy, learn and benefit from the analysis.
PS: Before we begin, we wish to inform you that we will increase our paid subscription prices to $24.99/M or $ 249.99/Yr starting 1st March.
Note that the subscribers who are currently enrolled or will enrol by 1st March will be subscribed at the mouth-watering current prices ($14.99/$149.99) “FOREVER”.
So, somebody who wants to take advantage of a massive 40% discount for a lifetime can subscribe till midnight on 29th Feb at the current prices.
US!
This week's most significant data point was the Fed's preferred inflation gauge.
JayPo has publically stated that he wants to see the Core PCE materially below 2%.
The detailed breakup of PCE exhibits that Core Goods has been the biggest driver of the disinflationary trend in the Core PCE.
Nonetheless, with the shipping crisis, rise in Chinese export prices and the end of the base effect by late Q1, the Core Goods might see a “swift” rebound.
Thus, we may be on the verge of a second inflationary wave beginning in late Q2 unless consumer health deteriorates and the labour market cracks.
We are excited to announce that from this month, we are adding a crucial macro variable to our kitty of various macro variables we track across the US economy.
Let me present to you
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