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How the 2024 elections could shape global markets.

The 5.2% annualised increase in the headline expenditure-based measure of US GDP in Q3 partly represents payback for earlier weakness. GDP has risen at a modest 1.7% annualised pace since end-2021, well below average expansion of 2.5% in the five years preceding the pandemic (i.e. to end-2019).

US commercial real estate: A study in contrasts and resilience.

Global six-month real narrow money momentum – a key leading indicator in the forecasting approach employed here – is estimated to have rebounded in October, having reached a new low in September. Allowing for an average 6-7 month lead, this suggests that the global composite PMI new orders index will decline into end-Q1 2024 but may stabilise in Q2 if September is confirmed as a low for real money momentum.

In our 3rd quarter investor letter we discuss our views on the MENA equity markets and the main return drivers for the strategy during the quarter.

In our 3rd quarter investor letter, we discuss our views on frontier emerging markets and the main return drivers for the strategy over the period.

Are market dynamics in Mexico surpassing its challenges?

The current constellation of economic cycles resembles the late 1960s, according to the framework employed here. The similarities in terms of US interest rates and labour market trends are striking and suggest major reversals next year.

Chinese six-month money growth rates were little changed in September / October following a sharp slowdown over the summer, suggesting weak economic prospects through end-Q1 2024. A small consolation is that recent monetary softness is partly explained by a rise in government deposits at the PBoC, representing yet-to-be deployed fiscal firepower.

How IWG is seizing the co-working market in WeWork’s wake.

Points de vue sur les marchés des actifs en fin de cycle.

On the ground insights from China, while cyclicals underperform in a down month for EM.

The global composite PMI new orders index fell from 49.5 in September to 49.3 in October, extending a decline from a local peak in May. Recent weakness was signalled by a fall in six-month real narrow money momentum, which reached a new low in September, suggesting a further PMI decline into end-Q1.

The PBoC has, ostensibly, been easing monetary policy – it reduced official rates in August, cut reserve requirements in September and has been injecting large sums in its regular lending operations. Yet three-month SHIBOR has risen since late August and is almost back to its March high.