Portfolio Watch: The last dance?
Hello everyone, and welcome back to our Portfolio Watch following Thanksgiving!
We’ve made some minor adjustments since last week, and we still see the current late-cycle global macro dynamics as a situation that calls for diversification, given the higher-than-normal uncertainty.
However, that hasn’t stopped us from taking a rather bold stance on the US economy leading up to the December meeting. Despite the hawkish or, at the very least, ambiguous communication from Powell and FOMC members, markets continue to be confident in yet another confirmation of a pause.
If our internal leading models remain unbiased by late-cycle trends, we believe there’s a good chance that temporary data could surprise us
Chart 1: ISM Services Model
We have taken the unpopular decision of being net long USD and Oil after a massive sell-off. Read our reasoning below