Alantra’s Post

💼Globally equity markets were flat yesterday signalling a wait and watch mood in anticipation of the Fed rate action tomorrow. 💼The Fed rate action will depend on the incoming data and evolving outlook and, therefore, what the Fed chief Powell says will be crucial. 💼Rate cuts are positive for markets and higher rate cuts are more positive. 💼But if the incoming data signals a sharply slowing economy and the Fed cuts by 50bp the market is unlikely to treat it as positive. 💼It is possible that the market may take it as a signal of the US economy tipping into recession and, therefore, the response need not be positive. 💼Banking stocks have been exhibiting strength recently and there are signs of accumulation in these attractively valued segment. 💼The finance minister’s remark in a recent interview cautioning investors about the dangers of excessive speculation has come at the right time. . . . #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

Inflation not leading to what you'd expect. The markets had a strong first quarter despite inflation sticking around. Here’s a timely analysis from our chief investment officer about what lingering price pressures may mean for the Fed and economy.

Imagine, just for a second, the notion that 5.5% rates are not that high and there is too much emphasis on rate cuts. Can't be... Real rates (Fed funds less CPI inflation) is ~2%. While this is meaningfully above real rates over the past 20 years, it is actually low relative to 1983-2000. The 80s and 90s were pretty for equities (763% good from 1983-2000). Between economic growth and low rates, growth sounds like a better long-term driver of value. Check The Fed vs. the Innovation Economy in Global X ETFs Inflection Points for more analysis and investment considerations: https://lnkd.in/dTWqbrD7

Fed raises high market expectations - Stable growth and falling interest rates create a perfect environment. - Markets remain even more optimistic than the Fed for the interest rate outlook. - It all sounds a little too perfect. Profit taking remains important. The slight decline in US inflation to 3.3% overall and 3.4% in the core rate further supported the already positive sentiment on the US equity markets. As a result, the markets expect a further gradual decline in inflation, so that the markets continue to price in a first interest rate cut in September. Although the latest Fed projections only show one rate cut by the end of the year, Fed Chair Powell softened the message of the dot plot and emphasized that the economic data are decisive. In addition, the Fed projections for 2024-26 show stable growth of around 2%. The positive Fed growth scenario compared to a very uncertain recovery in the eurozone is the key aspect for our allocation. The US equity markets remain relatively more attractive and should follow a less steep but positive trend. Investors should therefore stick to their core allocations in the US and to a lesser extent in Europe. The large European companies and share indices in particular should trade more strongly correlated with the US markets. However, the political uncertainties in the EU must subside again for this to happen. In terms of sector allocation, we continue to believe that diversification of technology exposure is important. The politically well-supported industrial theme provides a solid basis. In addition to industrials, materials and financials are sectors closely linked to this theme.

The Fed is poised to cut rates later this year amid disinflationary trends and steady economic growth. What historical perspective might be valuable to investors? Read our #portfoliomanagerinsights to learn more: https://lnkd.in/gPPk9wpZ

The Fed is poised to cut rates later this year amid disinflationary trends and steady economic growth. What historical perspective might be valuable to investors? Read our #portfoliomanagerinsights to learn more: https://lnkd.in/epZdNqfS

The Fed is poised to cut rates later this year amid disinflationary trends and steady economic growth. What historical perspective might be valuable to investors? Read our #portfoliomanagerinsights to learn more: https://lnkd.in/edfXZJMU

The markets had a strong first quarter despite inflation sticking around. Here’s a timely analysis on what lingering price pressures may mean for the Fed and economy.

The Fed is poised to cut rates later this year amid disinflationary trends and steady economic growth. What historical perspective might be valuable to investors? Read our #portfoliomanagerinsights to learn more: https://lnkd.in/ervW62P7