Market Cycle Guidebook - February 2024
Market Cycle Guidebook - February 2024
We’ve just published the latest "Market Cycle Guidebook", which is one of the main reports in our institutional investment research service.
The monthly Market Cycle Guidebook is designed to be a practical & tactical asset allocation guidebook for global multi-asset investors.
It focuses on illuminating the key drivers of risk and return across a global multi-asset universe, with the intention of generating actionable conclusions and meaningful insights for medium-term active asset allocation decisions.
(preview of front page of the report below)
Key features of the Market Cycle Guidebook:
-Instant overview of: global economic cycle, monetary policy, and valuations
-Market performance snapshot & commentary/highlights
-Summary views across asset classes (short and medium term); "cheat sheet"
-TAA/DAA guide visually mapping those views to recommended positioning
-Monthly updated Capital Market Assumptions
-And of course, over 70 charts illuminating the key medium-term drivers of risk and return across a global multi-asset universe
-Australia/New Zealand appendix (since we're down this part of the world!)
>> Some of the key takeaways from the latest edition:
-The global growth pulse continues to down-cycle [see Global Cycle Map]
--(but) soft data is starting to get less bad
--likewise the slowdown in hard data growth rates is turning
--and even the leading indicators are pointing to a turnaround
---the macro edge risk of reacceleration and inflation resurgence is real
-Central banks move into pause mode, and even pivot in places
--the Fed remains on pause, rate cut expectations are likely overcooked
---others pivot: at least on the frontiers of global monetary policy
---EM has collectively pivoted to rate cuts
----(notably China — making steps towards larger stimulus)
--the bulk of tightening is likely now behind us
---albeit the damage may already have been done (long + variable lags)
----and the global economy now faces a “monetary wall“
---thus the macro edge risk of deflation and recession is also real
-Remain focused on risk management, selective in allocations
--Value in government bonds, commodities, defensive stocks, EM
-Tactically bullish on commodities (previous bearish)
--medium-term technical signals say risks more evenly balanced now
--underinvestment means a new higher floor price across commodities
-Overall, as with the nuanced asset class performance during Jan/Feb, a nuanced approach is warranted… particularly as we navigate between the two major macro edge risks vs the policy perfection middle path
-the macro edge risks have very important and distinct market implications…
The report is designed for active asset allocators, and professional investors who require top-down input in their investment process.
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Best regards,
Callum Thomas
Head of Research and Founder, Topdown Charts
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