Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
Access all our platforms from a single account.
Weekly Update: Saxo Thematic Investing Performance
Peter Garnry
Chief Investment Strategist
Summary: E-commerce has been the worst performing theme basket over the past year as the pandemic led bubble has burst, but last week the industry experienced a relief rally as the lower than estimated US inflation print triggered lower long-term US interest rates. The rally in e-commerce stocks was the strongest among the smaller caps in the theme basket suggesting that retail investors were driving the price action last week.
E-commerce stocks have a monster week on lower US inflation print and China’s reopening attempt
Last week was historic in many ways when you look at the size of the market moves across different asset classes on the back of a lower than estimated US inflation figures and China’s commitment to ease its Covid policy. The lower US inflation print pushed down long-term interest rates and pricing of the Fed’s terminal rate was also lowered adding fuel to the narrative of ‘peak rates’. As we commented in our equity note Today we celebrate US inflation and tomorrow we think the inflationary pressures in the US services sector are still very high and have been stuck at very high levels for five straight months. In any case, the market has chose to disregard the underlying picture and has gone all-in on the ‘peak rates’ narrative and that China will be successful in easing its Covid policy despite rapidly rising case numbers.
The biggest winner last week based on these events was our e-commerce basket gaining 19.4% during the week easily outpacing cyber security, our second-best performing basket, up only 13.6%. While last week’s performance is spectacular the e-commerce basket is still the worst performing basket over the past year, and when we compare the performance relative to the MSCI World Index (see last chart) it becomes clear that the entire industry went into a bubble state before deflating back to where it came from before the pandemic, in relative terms to the overall equity market. While the Chinese e-commerce stocks had a good week they were not the outlier last week. The real signal was that the upper half of the basket had a median stock price performance of 11.5% while the lower half had a median stock price performance of 25.4% suggesting that relative lower quality companies outperformed. This behaviour suggests that retail investor flow was the dominant marginal price setter last week.
Latest Market Insights
Quarterly Outlook
-
-
Quarterly Outlook
Equity Outlook: Will lower rates lift all boats in equities?
Peter Garnry
Chief Investment Strategist
After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto... -
Quarterly Outlook
FX Outlook: USD in limbo amid political and policy jitters
Charu Chanana
Chief Investment Strategist
As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ... -
Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
Chief Investment Strategist
The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c... -
Quarterly Outlook
Commodity Outlook: Gold and silver continue to shine bright
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
FX: Risk-on currencies to surge against havens
Charu Chanana
Chief Investment Strategist
Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo... -
Quarterly Outlook
Equities: Are we blowing bubbles again
Peter Garnry
Chief Investment Strategist
Explore key trends and opportunities in European equities and electrification theme as market dynami... -
Quarterly Outlook
Macro: Sandcastle economics
Peter Garnry
Chief Investment Strategist
Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p... -
Quarterly Outlook
Bonds: What to do until inflation stabilises
Althea Spinozzi
Head of Fixed Income Strategy
Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ... -
Quarterly Outlook
Commodities: Energy and grains in focus as metals pause
Ole Hansen
Head of Commodity Strategy
Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...