Note Synopsis May 18 2024: Ephemeral Rate Cuts And Expectation Mismatch Challenges

Note Synopsis May 18 2024: Ephemeral Rate Cuts And Expectation Mismatch Challenges- The central thesis of pricing in the capital market of today appears to complacently hinge around policies of central banks being either to be positioned or being otherwise forced into providing ease on demand. Yet, the several rate cuts widely expected at the start of 2024 have instead proven ephemeral. Other challenges revolve on internal market valuations including those dependent on fiscal budgeting; operating and financial margin management. Prolonged real or proxy outright war l cauldrons appear close to vital trade routes of various types.

Generally latent during the great quantitative ease, currency turbulence is a likely challenge underway for trade, for government finances and indeed for corporate operating as well as financial statement management. The aspects of impact would include currency translation volatility that was last of investment concern decades ago. Rather than the yesteryear euphoria of momentum and of short term gratification of early rate cut anticipation, greater selectivity is likely at the individual security level. Within markets and the performance mix therein so far in 2024, rather than a value versus growth or geographical selection matrix, quality of operational and financial statement management will likely be paramount. It would include that within equity sectors and that within fixed income credit tranches. At the asset level, we would include precious metals as a core consideration. E.o.e.