Mikkel Rosenvold
2 weeks ago

Analyst Predicts Positive Market Trends for May

An optimistic market forecast anticipates inflation, growth, and liquidity improvements.
scanrail / DepositPhotos
scanrail / DepositPhotos


After an accurate prediction of April's downturn, Steno Research sees positive momentum ahead. Andreas Steno, lead analyst, explains that their Macro Regime Indicator signals a favorable outlook for May, with expected improvements in inflation, growth, and liquidity that should support risk assets and reflationary trades through June.

Growth:
April saw mixed signals, with improving trends in Sweden and Canada but weaker U.S. PMI data. Despite this, Sweden's PMI could offer a strong leading indicator for U.S. ISM Manufacturing data, with growth momentum likely to recover.

Inflation:
Steno's forecasts anticipate higher-than-consensus inflation, with headline and core figures surpassing expectations due to rising food, energy, and rent costs. Although inflation remains stubbornly high, nowcasts suggest a resurgence in goods pricing.

Liquidity:
An earlier and more aggressive tapering of quantitative tightening (QT) may lead to increased liquidity soon. As the U.S. Treasury General Account shrinks and Treasury bill issuance accelerates, liquidity should rise into Q3 and possibly through May and June. The liquidity situation contrasts sharply with April's outlook, with a projected return to over $6.5 trillion by the 2024 election.

Asset Allocation Model:
The current "Up, Up, Up" macro regime favors equities and commodities. Steno's model identifies Asian equities as outperforming European stocks, and Brent crude and copper providing solid returns in commodities. The USD is expected to stabilize, with long positions in USDCNH being favorable.

Disclaimer

The information provided by this Site is for general informational purposes only. All information on the Site is provided in good faith, however we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability or completeness of any information on the Site.

More News

5 hours ago Israeli Airstrike Hits Rafah Tent Camp Israeli airstrike on Rafah camp kills dozens, raising international alarm.
5 hours ago Meta and Call of Duty Maker Sued by Families of School Shooting Victims Families of the 2022 Uvalde school shooting victims file lawsuits against major corporations and officials, claiming they contributed to the tragedy.
7 hours ago Walmart and Capital One Call It Quits on Partnership Walmart and Capital One announce the end of their six-year card partnership amidst legal disputes.
8 hours ago US Market Open - May 27, 2024: Wall Street Wavers but Nasdaq Soars Daily update from the US market open.
10 hours ago Crypto, Currently: May 27, 2024 - Ethereum Leads Weekly Surge, Bitcoin Holds Steady Daily update on Ethereum, Bitcoin, and more!
1 day ago Debunking the headline: US GDP grows by a third ahead of EU in 15 years Europeans need not worry as much as these articles would suggest.
1 day ago Empowering Women Could Boost Economic Growth, Says IMF Economists Discover how gender equality initiatives could transform economies in Japan and Korea.