YWR Killer Charts

Disclosure: This is market commentary and definitely not investment advice. Always get professional investing advice.

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Double shot latte please.

It’s time for the monthly YWR Chart Pack.

It’s 90 slides covering:

• BofA September Fund Manager Survey

• S&P Earnings Estimates

• Hedge Fund Positioning and Others

• Goldman Strategy note on AI

• JPM Note on Covidia

• Hong Kong Exchanges

• Top 10 Charts from

  MacroCharts

A link to the full slide deck is at the bottom of the post. But it’s also available in the YWR Library along with all the other presentations we cover.

Here are 10 of my favourites:

1. Inflation expectations are historically low. This will be a big theme going forward. The Fed, and most investors will have to reset their expectations higher.

2. The China stimulus changes everything. In 1 month the China outlook flipped from record pessimism to growth. EM + Commodities are seen as the way to play it.

3. S&P 500 earnings estimates are showing a little bit of weakness. It’s mostly coming from energy and materials, so far.

4. Market risks are rising, but on the other hand hedge funds aren’t chasing, which suggests maybe there are changes in which sectors and indices do best, but in general equities can go higher.

Source: Morgan Stanley

"After the Global L/S ratio reached a 12M low by August month-end, we saw levels rise slightly higher on the back of the buying in September. The current L/S ratio sits at 2.05 as of month-end, which represents the 26th %-tile over the last 12M and the 43rd %-tile over the past 5 years."

5. The Growth of Mainland Chinese trading on the HKEX.

Source: HKEX

International and HK investors are using Northbound Connect to access mainland Chinese markets. Mainland Chinese are using Southbound Connect to trade in Hong Kong. 18% of turnover in the Hong Kong market is coming from Southbound connect (up from 6% in 2019). HKEX is effectively the toll booth for both mainland Chinese wanting to access the HK market and international + HK investors wanting a trusted partner to access Shanghai and Shenzhen. It’s one of the reasons HKEX is our China FOMO play.

6. MAG7 Capex is not elevated relative to cash flows. They have the money.

Source: JP Morgan Covidia

7. Macro Charts likes our view on platinum.

8. And they like our call on Europe too.

   

   But I was surprised about these other two assets they flagged.

   The move could be ‘explosive’???