Disclaimer: The following content is an archive of Substantive Research Discovery – Trending Investment Themes, as delivered as weekly insights to our paid subscribers. Links to gated content have been removed.

TS Lombard: Where are we in the cycle?

Massive macro distortions have confused economists and confounded investors

But the fake cycle is starting to unwind, revealing underlying structural changes

This is a handy Q&A guide to where we are in this fake cycle – and what happens next. Click here.

Applied Global Macro Research: Global manufacturing cycle – more inventory boost ahead

The trough in the DM manufacturing PMIs in the second half of 2023 that we expected seems to be confirmed, and two important factors are now more positive for the outlook.

First, the inventory cycle has continued to weaken implying a clearer positive impulse from inventories to production.

Second, we have tweaked our DM domestic goods demand outlook higher as the US economy has been surprisingly resilient and Europe has not clearly fallen into recession. Click here.

MRB: From no landing to gaining altitude?

Ongoing U.S. economic strength, plus strengthening global trade and signs of life in manufacturing indicators, reinforce the upbeat message from equity and credit markets: global monetary conditions are not restrictive.

The growth acceleration in two key leading economies (Korea and Taiwan) heralds better and broader global growth in 2024.

The brightening growth outlook bodes well for corporate earnings and has helped to sustain the post-October risk-on phase. Click here.

Topdown Charts: Reacceleration and recession risks

There is credible and growing evidence (leading indicators, survey data pulse, market pricing) for the global growth reacceleration risk scenario.

Despite some recessionary pockets, recession risk overall is looking less likely (but not something to write-off entirely); keep monitoring, but downgrade risk. Click here.

Jefferies: When 3 jobs become one; deconstructing US jobs data

US payroll data last Friday certainly surprised markets, with expectations of a March rate cut disappearing while the 10-year Treasury bond yield has risen by 24bp since the data was announced.

US nonfarm payrolls increased by 353,000 in January. This compares with consensus expectations of 185,000 job gains in January.

The household survey tells a different story. Total employment was down 31,000 in January. One difference between the nonfarm payrolls and the household survey of employment is that if a person has three jobs it will count as three in the payroll data but only as one in the household survey. Click here.

Renaissance Macro Research: Modern macro myth-busting; M2 Malarky and misleading on multiple job holders

How much credence do you place on M2 as an indicator?

Many analysts are pointing to M2, touting its predictive power. The weak growth today is a sign that the economy is about to tumble, or so the thinking goes.

The truth is that the relationship between M2 and future GDP growth has been weak for quite some time, and you can make the case for both economic strength, and weakness, as M2 moves in with direction.

Anytime an indicator becomes a ”choose your own adventure”, it is best to stay away from it.

Is holding multiple jobs good or bad as a growth indicator?

Whenever NFPs runs ahead of the Household Survey, the usual suspects will check the number of multiple job holders. If it is going up, that’s bad, and if it is falling that must be good. After all, who wants to work two jobs to make ends meet?

Actually, contrary to popular opinion, when the economy is growing faster, the share of multiple jobholders in the employed population tends to rise. It’s a cyclical series. Click here.

Pennock Idea Hub: How Trump’s Isolationism Threatens LT Equity Returns

If investors are relying on the historical experience of U.S. asset returns to project their future returns, they may be disappointed under the scenario of a second Trump term

Trump’s foreign policy could unravel the “Stocks for the Long Run” narrative popularized by Jeremy Siegel

The outsized performance of U.S. equities in the post-war era can be largely attributable to a lower cost of capital (AKA “exorbitant privilege”). Trump’s isolationist policies that dismantle Pax Americana threatens the U.S. financing advantage. Click here.