US Dollar

MacroQuant upgraded equities to overweight in February on a tactical short-term (1-to-3 month) horizon, but it continues to see downside risks to stocks on a medium-term (12-month) horizon. Consistent with the model’s relatively somber medium-term growth outlook, it sees more downside for bond yields on a 12-month horizon than on a 1-to-3 month horizon.

In this week’s report, we release an update to our long-term REER valuation model and expected future returns for major currencies.

While 2024 will see various election risks, global geopolitical uncertainty is driven by the US election and its struggle with Russia, China, and Iran. The stock market can manage local domestic political risk. But it will correct upon a major outbreak of geopolitical uncertainty.

This week’s report explores factors behind the recent rise in the dollar, and whether this could continue in the next month.

When will the US also buckle under high rates? We expect a US recession to begin around mid-year. Stay defensive.

Following the release of the white paper yesterday, today we are sending you the inaugural issue of the MacroQuant Monthly, a report summarizing the output of our next-generation MacroQuant 2.0 model.