To The Moon

The monthly Market Cycle Guidebook is a key resource for investors — providing insight into the stage of the business cycle, monetary policy trends, leading indicators, earnings momentum, valuations across multiple different assets and markets, long-term return expectations, and tactical asset allocation views.

Key Findings from the Latest Monthly pack:

• Global monetary policy settings are increasingly shifting from headwind to tailwind as inflation falls and economic cycle data remain soft.

• Among the asset classes most at risk given valuations and the stage of the cycle are US tech stocks, US dollar, and corporate credit.

• ​​Areas which see superior upside risk/reward meanwhile include government bonds, commodities, emerging markets, and certain sectors on a tactical basis such as defensives, small caps, and frontier markets.

• Rotation and Relative value are thus key themes along with smart diversification and risk management (diversify diversifiers, tactically upweight more attractively priced diversifiers + when technicals align: these matters are discussed).

• The major macro dilemma for investors at this stage is the tails; resurgence risk on the one end (growth reaccelerates, inflation resurges), and recession risk on the other end (recession takes hold, deflation comes into focus).

  • The second coming of Trump likely exacerbates this, with a puzzling policy path potentially pushing up inflation, but also raising recession risk (it will all depend on what gets implemented, how quickly, to what degree, and the second order effects).

• The main upside risks for growth assets would be: a macro middle path (goldilocks, policy perfection), China stimulus, Trump taking a prudent policy path, and in markets a series of prospective bullish rotation trades…