Rayliant Global Advisors

We are thrilled to feature New York Times-bestselling author and Geostrategist Thomas P.M. Barnett, PhD in conversation with CIO Jason Hsu.   Hear how shifting power dynamics and climate change are likely to reshape the global landscape.   We hope you will join us for this live virtual event Tuesday, October 1st | 1:00pm ET | 10:00am PT Save your spot today! https://lnkd.in/g5wM-6r9

Highlights from this week's Perspectives (and a milestone issue no. 100!) Figure 1: Growth is inevitably slowing. Of course, this dynamic isn’t unique to Nvidia—it’s just garnering much more attention because of the company’s high profile. The bigger its sales and profits get, the harder it is to keep up insane growth rates witnessed in prior quarters. Is 122% growth in revenue a bad thing? Obviously not! But when you’ve posted three consecutive quarters of growth more than 200%, it’s easy to see how this quarter’s otherwise envious number might feel underwhelming to investors. Figure 2: It’s not just actual inflation that matters to the Fed, interestingly the central bank also frets over how much inflation consumers expect, since expectations can ultimately shape reality. On Friday, the University of Michigan gave us a window into consumers’ minds with its monthly survey of American households. That report showed August one-year inflation expectations down to 2.8%—the prior estimate was 2.9%. Figure 3: Prospective homebuyers are, of course, closely following data on mortgage rates, and one might also reasonably expect as rates come down, purchase activity will pick up. Unfortunately, as we predicted in our last commentary on the US housing market, lower mortgage rates have not translated into more sales. To the contrary, the National Association of Realtors reported on Thursday that its index of pending home sales in the US fell 5.5% month-over-month in July, marking a new low for the index since the NAR began publishing it in 2001. Link in comments section below⬇️

CIO Jason Hsu was recently asked to share his single best trade of 2024 by TheStreet. What was his top stock to watch? HINT: It wasn't a US name! 📈   Read on for the full story 👇 https://lnkd.in/gUWkrv4f   #Investing #China #StockMarket   Please Note: This is the opinion of Jason Hsu and not to be considered as personalized investment advice. Take into account your own personal risks, investment objectives and financial situation. Past performance is not an indication of future results. The securities identified and described do not represent all of the securities purchased, sold or recommended for client accounts. The reader should not assume that an investment in the securities identified was or will be profitable.

CIO Jason Hsu joined CNBC Street Signs Asia to discuss China's ongoing bear market. Jason believes that a market recovery in #China really hinges on consumer spending and corporate action, not just policy talk from Beijing. You can watch the full segment here: https://lnkd.in/gNBdUAsn

Rayliant's Chief Research Officer, Phillip Wool explains how macro themes are shaping sector allocation in Japan. From precision manufacturing to the AI and EV supply chains, hear how some Japanese firms could be well-positioned for growth. Listen back to this Summer's Japan-focused webinar by following the link in the comments section below ⬇️ 📈 #Investing #Japan #Active

Highlights from this week's Perspectives! (link in comments section below⬇️) Figure 1: We expect a gradual easing from the Fed. Why not a 50 bps cut? One hint we've taken from Fed speak—not just Powell's comments but also those of other current and former Fed officials discussing the conference—is that the Fed still views the US economy as strong and does not see the current moderation as dire. Reducing the policy rate by two notches would indicate a nervous response to being significantly behind the curve, which we don't believe Powell's FOMC sees that way. Therefore, we expect the market to overestimate the pace at which rates will ease toward the central bank’s long-term projections. Figure 2: There was a significant downward revision to jobs data last week. Just days after the FOMC’s end-of-July meeting, the US Bureau of Labor Statistics released data on nonfarm payrolls, revealing lower-than-expected job growth and a rise in US unemployment to a three-year high. In fact, it appears that the cooling trend we've observed in recent months likely began much earlier, according to an annual "benchmark revision" released by the agency last Wednesday. Figure 3: India’s PMI is on a tear. While this is relative, the reason Indian stocks might still be considered a 'buy' compared to those in the US is that, despite signs of moderation in US growth—and, more broadly, in the global economy—investors are increasingly concerned about the pace of Fed rate cuts. India’s economy, however, has often seemed immune from these worries. The August PMI underscores this strength, with a reading of 60.5, historically high and marking 37 consecutive months of expansion—the longest streak since mid-2013.

Figure 1: Headline CPI increased by 0.2% month-over-month. Although this is up from a 0.1% decline in June’s CPI, it aligns with economists’ expectations and corresponds to a 2.9% year-over-year increase in prices. This is a slight decrease from June’s 3% inflation rate and represents the lowest reading since March 2021. Given the weaker-than-expected July jobs report, we believe that seeing disinflation firmly back on track should give the Fed enough confidence to begin easing in September. The rise in prices was primarily due to two factors: shelter costs, which increased by 0.4% month-over-month, and car insurance, which went up by 1% since June. Figure 2: Traders have lost faith in a half-point cut. So, why not 50 basis points of easing in September? Earlier in August, traders believed a substantial cut was likely, pushing futures to prices that implied a 96% chance the Fed would implement four cuts over three meetings. Since then, however, futures traders have scaled back their optimistic predictions. As of last Friday, prices indicated only a three-in-five chance of a jumbo rate cut before the end of the year. You can blame last week’s US retail sales number for a big part of that dramatic revision in expectations. Figure 3: Emerging market (EM) currencies are pricing in a pivot. When plotting the dollar against a basket of emerging market currencies—particularly those sensitive to US rates—we see that the USD has strengthened significantly since rate hikes began in early 2022. This strengthening is second only to the dramatic flight-to-safety seen at the start of the COVID pandemic in early 2020. However, since late 2022, the dollar has experienced a notable reversal of these gains, as investors anticipate inevitable Fed easing with US inflation coming back under control. For Rayliant's latest macro insights, visit the link in the comments section below⬇️

📊 What's driving the divergence between real estate and stocks? CIO Jason Hsu explains how interest expenses are putting pressure on real estate, while the stock market remains resilient. Watch to understand why the next year could look very different for these two markets! #RealEstate #StockMarket #Investing

In Jason Hsu's recent quarterly market outlook, he shared why he’s bullish on emerging markets—especially those excluding #China. He explains how smaller economies like Thailand and Mexico could benefit enormously from shifting trade flows.    #emexchina #emergingmarkets #investing