Market Cycle Guidebook - The big edge risks are recession and deflation
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.
The big edge risks are recession and deflation on one edge vs reacceleration and inflation resurgence on the other edge.
In practice given what has gone on in the US so far this year, it is now likely that the US economy faces a recession or at least short-sharp-slowdown.
Meanwhile the rest of the world may well hold OK (Japan going strong, Europe and China turning up out of slowdown + stimulus, prospect of increased non-US multilateral trade).
This makes for a more bifurcated outlook
Among the asset classes most at risk given valuations and the stage of the cycle are US tech stocks, US housing, US dollar, and US credit (spreads).
Indeed, there are clear signs that the US stockmarket has turned the corner into a cyclical downturn, which is likely to take months and much further significant valuation adjustment to run its course.
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, value stocks, 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).
For whom haven't open CBA can know more from below:
🏦 Open a CBA today and enjoy privileges of up to SGD 20,000 in trading limit with 0 commission. Trade SG, HK, US stocks as well as ETFs unlimitedly!
Find out more here：
Trade on a Cash Boost Account and enjoy up to 6 months of Commission-Free trading.
💰Join the TB Contra Telegram Group to Get $10 Trading Vouchers Now🎉
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
