Macro Bear And Bull Summary

by WSBConsensus


  1. July marked the second consecutive month of contraction in Global PMI’s
  2. US 10yr real yields touches negative territory
  3. Gold made fresh highs
  4. US ISM nonmanufacturing index surprised to the downside in July
  5. China’s July service industry PMI came in below expectations hitting its lowest level in 5 months
  6. UK’s 2Q19 GDP contracted.
  7. The GS US Current Activity Indicator (CAI) has slowed to a pace of 1.3%. For context, the CAI equaled 4.2% just 18 months ago, 2.2% six months ago, and 1.6% as recently as May



  1. China isn’t so much aggressively devaluing its currency as it’s giving in to market forces (the CNY would likely be much weaker vs. the USD if it were to trade fully and freely).
  2. The 9/1 China tariffs can still be avoided – Trump didn’t condemn the entire trade negotiation process in his 9/1 tariff threat but instead took issue w/the perceived lack of Chinese action on the issues of agricultural purchases and fentanyl exports, suggesting the bar for another G20-like truth may be relatively low.
  3. Trump has had some (small) trade successes, including USMCA (although this probably won’t pass Congress before the Nov 2020 election) along w/bilateral deals w/South Korea and (possibly as soon as Sept) Japan
  4. Monetary policy is easing globally – while restrictive monetary policy isn’t really a problem for the economy (as real rates globally are at or below zero already), stocks do respond (if only briefly) to easing (and the anticipation of further accommodation). Thus the approaching monetary events/meetings could serve as catalysts for stocks(FOMC minutes 8/21, ECB minutes 8/22, Jackson Hole speeches 8/23, ECB meeting 9/12, and FOMC meeting 9/18) and help put a floor in the SPX around ~2850
  5. Global growth is holding up better-than-feared – the economy has been buffeted by a slew of headwinds and shocks but growth in aggregate is doing decently all things considered. Europe remains an area of softness but China’s most recent data (for June) signaled stability while the US consumer is doing very well
  6. The CQ2 earnings season wound up being better than feared – part of this was a function of very subdued expectations but regardless the season was generally a healthy one (although the 2020 consensus estimate never moved higher).



Disclaimer: Consult your financial professional before making any investment decision.


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