Weekly Macro Themes - Clear downside risk to the stock/bond ratio
This week I covered the following topics/ideas:
1. US Dollar: Bearish USD given initial breakdown, shifting sentiment, expensive valuations, long-term cycles, waning yield support, debt and deficits, and prospective policy convergence.
2. Stocks vs Bonds: Clear downside risk to the stock/bond ratio given absolute and relative valuations, shift in sentiment and technicals, and turn + divergences in key macro indicators. $S&P 500(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $NASDAQ(.IXIC)$ $NASDAQ 100(NDX)$ $Invesco QQQ(QQQ)$ $DJIA(.DJI)$ $GLOBAL X DOW 30® COVERED CALL ETF(DJIA)$
3. EM Bonds: Remain bullish emerging market government bonds (US$ and local currency) given cheap valuations, peak rates and policy pivot, and promising technicals, sentiment.
4. Frontier Markets: Remain bullish on frontier market equities given cheap valuations (equities and FX), tailwinds from peaking policy rates, and strong technicals with a key upside trigger within reach.
5. Energy Sector + Oil Price: Crude oil prices are breaking down (but not out, as geopolitical risk lingers and demand/supply still looks supportive). Constructive on oil and gas (and renewable energy) stocks.
https://www.topdowncharts.pro/p/weekly-macro-themes-23-aug-2024
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