Weekly Macro Themes - Global bank stocks have been performing well
This week I covered the following topics/ideas:
1. Resurgence Risk: The global growth reacceleration + inflation resurgence macro edge risk is increasingly becoming the base case as a growing body of evidence points to imminent inflation upside.
2. Commodities: Clear case for upside based on improving technicals, sentiment and positioning, growth reacceleration prospects, cheap valuations, and a prolonged period of underinvestment in supply.
3. Credit Spreads: The credit (and equity) risk premium looks uncomfortably low, and while we can outline some risks, there doesn’t appear to be any near and pressing catalyst; but still lean cautious.
4. Global Bank Stocks: Global bank stocks have been performing well technically, with strengthening macro/fundamentals to back it; global (ex-US) banks are cheap vs history, the index, and vs US banks.
5. Japan: Remain bullish Japanese equities given steadily improving macro/fundamentals, cheap absolute and relative valuations, and still very light allocations by global investors.
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