Your Essential Weekly Preview: What You Need to Know
Regime Models and Market Catalysts
Market Regime:
REFLATION-a risk-on regime favoring pro-cyclical assets. Policymakers are expected to support nominal growth and mitigate deflationary risks.
Portfolio Strategy:
Favor Risk Assets over Defensive Assets:
High Beta > Low Beta, Cyclicals > Defensives, Value > Growth
Small or Mid Caps > Large Caps, International > US, EM > DM
Spread Products > Treasury’s, Belly > Short Rates > Long Rates
High Yield > Investment Grade, Energy Commodities > Agricultural > Industrial
Gold > USD > FX
Global Liquidity:
Modest liquidity increase projected medium-term.
US Macro Outlook:
Next 3-6 months: REFLATION (growth ↑, inflation ↑) likely.
Next 6-12 months: Same outcome expected.
Three-Month Outlook:
Bearish: Bonds
Neutral: Growth Stocks
Bullish: Bitcoin, Commodities
Bearish: USD
Moderate chance of risk-on regime sustainment.
Positioning:
Investor Stance:
Advisors: Overweight stocks, neutral bonds, underweight cash.
Speculators: Neutral stocks, underweight Treasurys, overweight Bitcoin, underweight commodities.
Systematic Funds: Neutral stocks.
Hedge Funds: Overweight risk assets (gross exposure).
Valuations: Align with major bull market peaks-we need to see a rotation out of big tech in to other sectors.
Calendar
Monday, Dec. 2
S&P Manufacturing PMI (Nov.): 48.8 (flat).
ISM Manufacturing (Nov.): 47.5 (up from 46.5).
Construction Spending (Oct.): +0.2% (up from +0.1%).
Tuesday, Dec. 3
Job Openings (Oct.): 7.6M (up from 7.4M).
Auto Sales (Nov.): -- (prior: 16.0M).
Wednesday, Dec. 4
ADP Employment (Nov.): 158K (down from 233K).
ISM Services (Nov.): 57.0 (flat).
Factory Orders (Oct.): -0.3% (improved).
Fed Beige Book
Thursday, Dec. 5
Jobless Claims (Nov. 30): 215K (up slightly).
Trade Deficit (Oct.): -$74.8B (narrowed).
Friday, Dec. 6
Employment (Nov.): 200K (sharp rise).
Unemployment (Nov.): 4.1% (flat).
Hourly Wages YoY: +3.9% (down slightly).
Consumer Sentiment (Dec.): 73.0 (up).
Consumer Credit (Oct.): +$10B (up from $6B).