Insights 360

Pace 360 Insights – 03 February 2023

“We believe most of the global equity indices have made their rally peaks in the last two weeks with US and European equities making stunning highs in the last couple of days. The sentiment indicators which were at historical lows in October 2022 are already at multi-month highs. US non-profitable tech stocks are up more than 25% in just the last five weeks. We see the equity markets as being very close to a turning point right now. We believe dollar index has bottomed out for now and should bounce higher in the near term.”

Pace 360 Insights – 23 December 2022

“Global equities had a mixed week with Nasdaq, Chinese, Indian and Japanese equities going down while the rest of the world did reasonably well, led by Brazil which exhibited a stunning outperformance. We expect global equities to do well over the coming 5-6 weeks with Nasdaq potentially leading from the front once again. We expect EM currencies and equities outside China and India to continue to outperform.”

Pace 360 Insights – 09 December 2022

“Global equities corrected sharply last week led by Nasdaq which fell almost 4%. We believe equities may correct somewhat more in the coming days even though there probably isn’t any significant downside left in them. In fact, over the next couple of months or so global equities may have more upside potential left in them. Many equity indices may end up going up beyond their December highs by February first half. We believe crude oil may be close to an intermediate bottom at current levels. We expect gold and silver to become sideways in the near term before they resume their longer term uptrend. Dollar index also may have made an interim bottom for now and may become sideways to bullish over the next few weeks.”

Pace 360 Insights – 07 October 2022

“Global equities have bottomed out or are very close to their worst levels in this particular bear run. We expect global equities to rally by 10-15% over the next three months. We believe dollar index has made its rally top and will soften against DM currencies over the next one year”

Pace 360 Insights – 11 March 2022

“Global equities hit a bottom on 8th March and commodity complex hit the peak the same day. We see reversion to the mean happening over the next 6 weeks with equities climbing up and Commodities softening further. We are medium term bullish on global equities as well as High yield corporate bonds from the current levels. We see US long term Treasury yields going up further in the coming months and we see gold being largely sideways”

Pace 360 Insights – 09 Jan 2022

“While the extreme euphoria in the global equities continues unabated, the EM currencies have started coming down and the dollar index also seems to have bottomed out. We believe that EM Equities and commodities will be the next dominoes to fall. US equities will probably be the last risk asset class to fall. We expect a blood bath in all risk assets between now and mid-February”

Pace 360 Insights – 20 Nov 2021

“Most of the global equities had a down to sideways week while Nasdaq 100 was propelled upwards by the Fangma plus stocks. We believe US equities and, by correlation, global equities are close to a historic peak and are getting ready for a powerful bear market. While equities may remain rangebound for the very short term we expect bears to take over within the next few months. We remain bearish on industrial commodities and crypto currencies. We remain bullish on long term US Treasuries and gold for the long term”

Pace 360 Insights – 20 March 2020

“We believe that gold has bottomed out this week at a level of around US$ 1450 per troy ounce. We are extremely bullish on gold from that level and we believe that gold can retest its all time high of US$ 1900 per troy ounce before the end of this year. We also believe that gold miner stocks have made a long term bottom this week. They represent a great value opportunity considering the rally we expect in gold and a potential normalization of equity sentiment over the coming months. We are also turning very bullish on Euro which we believe is very close to its long term bottom. We expect Euro to start a multi-year rally soon against US Dollar which will take it up to the levels last seen in 2008”

Pace 360 Insights – 10 March 2020

“We believe that the worst of Coronavirus fears and the “reverse* oil shock have now been completely discounted by the global financial markets. Even though the coming economic data and the next quarterly results are going to be a washout, we believe that there are makings of a massive equity rally over the next 3-4 months. Hence we believe equities globally are now “buy on falls” rather than “sell on rally”. The monetary and fiscal stimulus being thrown at the markets and economy in every major country are unprecedented and will lead to reflation of the global financial markets over the ensuing summer months”

“We also believe that the absolutely stunning run of US treasuries has come to an end yesterday and we wish to communicate our SELL call on long duration government bonds all over the world. We also believe that US dollar will appreciate against Euro and JPY, but EM currencies will appreciate against Dollar and Euro over the next few months. We also believe that industrial commodities will go up by about 10-20% from current levels by June of this year”

To summarise, we are now reversing our SELL stance on risk assets and converting it into a BUY and would recommend taking advantage of every fall/dip in the risk assets between now and March end”

Pace 360 Insights – 29 Jan 2020

Agro Commodities:
“We are long term bullish on Agro commodities. But because of the fact that we are bullish on US dollar over the next few months, it is entirely possible that the agro commodities stays largely range bound or will not move much or we may also see correction in Some of the agro commodities over the next 2 to 3 months but after that we remain extremely bullish on agro commodities and we
believe that finally when deflation will give way to hyper-inflation at that time, agro comm will go multifold from here but even when this scenario of disinflation and deflation prevails over the years, we believe that agro comm will do well because finally dollar is going to peak out over the next few months and when dollar loses out and gives way to European currencies, we believe that even in the deflationary scenario in the world, agro commodities will do well”

Pace 360 Insights – 29 Jan 2020

Crude oil:
“Crude oil we want to talk about in a different note because if the probability of a democratic win increases in the US, probably shale oil production will peak out over a period of time will peak and take a hit and if that were to happen, the overall crude oil supply situation will become less and the excess supply we see in crude oil market will ease out if that happens and there would be two conflicting forces. On one hand the supply situation would go down if democrats come to power but on the other hand the slow down would show that the demand would also come down. So probably crude oil from these levels may not be as bearish as other industrial commodities so we have the feeling that crude oil is going to remain largely range bound between Brent 54$- 66$ and WTI 48$ – 61$/62$ and we believe that crude oil is going to remain range bound while rest of the commodities would have a bearish bias but this bearish bias would unfold only after a certain rally which may happen once the immediate impact of corona virus is behind us”

Pace 360 Insights – 29 Jan 2020

Emerging market Currencies:
“We continue to be extremely bearish on Emerging market currencies. So, the emerging currencies have been sideways from a pretty long time and they basically had a very bad bout of depreciation between April – October 2018. After that they appreciated between October 2018 to about February/March 2019, but ever since that point they have become largely sideways. We are extremely bearish on Emerging market currencies we believe that just like we saw the bout of depreciation between April – October 2018 we will see another bout of depreciation between now and April 2020 and beyond”

Pace 360 Insights – 29 Jan 2020

Emerging market Equities:
“Unlike the US equities which made their peak in Jan 2020, the Emerging market equities peaked out in Jan 2018 and they have been languishing ever since. So, the MSCI Emerging market Equity index peaked out at 52 in January 2018 went all the way down to 37 in 2018 and is now close to 44.5/45 levels. We believe that emerging market equities will continue to take a tumble and probably the
next 3-5 months itself we will see a tumble of 10-15% and this will probable get worse as the year progresses”

Pace 360 Insights – 29 Jan 2020

Euro:
“We believe that while in the long term Euro is headed much higher than its current levels against US dollar but we also believe that US dollar continues to be strong and we will not be surprised if US dollar makes a higher high in terms of Dollar index that it made in the year 2019 which was at about 99.70. So, dollar peaked out against euro in 2019 at about 1.0870 and it is our belief that it may cross that level and make a higher top against Euro, maybe it goes down to 1.08 or 1.07 over the next 2-3 months. The upside is not more that 2-4% from here but we do believe that dollar will reign supreme for the next few months and then once it has topped out against Euro over the next 3-4 months maybe at the level 1.07 to 1.08 then finally over the long term we believe tat dollar is going to depreciate due to twin deficits and because of poorer performance of US economy as the next slowdown comes., So which is why in the long term Dollar is going to depreciate against Euro and against Pound and against other European currencies and against yen but it will probable appreciate between now and next three months against the European currencies, maybe not so much against Japanese yen”

Pace 360 Insights – 29 Jan 2020

Gold:
“We are extremely bullish on gold. You may recollect that we gave a long term buy signal on gold in august of 2018 when gold was about 1170 $. Our belief says that gold will continue to go up from here we believe that whether it is the ensuing slow down gold will do well, whether it is the impending deflation that will happen after disinflation which is happening right now once inflation comes in, gold will do well and finally after a few years when hyper-inflation kicks in in Europe, US, Japan, and in other parts of the world economy, even then gold will do well. Gold is practically one of the very few asset classes which will do well in practically every economic scenario that is going to unfold over the next few years. It will do well in disinflation, deflation and extremely well in hyper-inflation. One of those rare asset classes where you can buy and go to the Bahamas and switch off your mobile and come back a much richer man”

Pace 360 Insights – 29 Jan 2020

Industrial commodities:
“We are bearish on industrial commodities. They have taken a very deep knock in the last two weeks ever since corona virus hit. Most of the industrial commodities have come down between 6% to 10% over the last couple of weeks. We believe that this is an excessive fall and will partly reverse itself and may not go to their recent highs made in December and January. But they will probably recoup about half of the losses we have seen in the recent past but then eventually because we are bearish on global economy, US economy, Chinese economy, we believe that the industrial commodities will come down a little further as this year progresses”

Pace 360 Insights – 29 Jan 2020

US Equities:
“We are of the belief that US equities are absolutely close to their top. So, whether it is S&P500, NASDAQ or Russel 2000 are very close to their peaks, maybe they go up by a cent, two or three percent from their current levels but the upsides from there are not substantial which would mean that US equities will also probably land themselves in a bear market as early as maybe August or September and the cut could get deeper as the year progresses”

Pace 360 Insights – 29 Jan 2020

US Treasuries:
“On the treasury bond we have been extremely bullish on them on the last about 15 months. So, we gave our first buy signal on them in Oct 2018 when US 10-year yields were at about 3.25%. They have come down to about half of it to 1.61%, but we are still bullish on US treasuries. We believe over the next 1 year we will see US treasury yields coming down to less than 1%. So, US 10 year willcome down to 0.6%-0.7% and US 30 year yields will come down to probably about 1%, they are at 2.08% right now so we are extremely bullish on US treasuries and we continue to believe that they will continue to outperform most of the other asset classes in the fixed income in 2020”

Pace 360 Insights – 13 Nov 2019

“After a scorching rally of the last three months, we believe that US equities specifically and global equities broadly, are topping out. Yesterday S&P 500 made a peak at 3102 levels and is right now at about 3096 levels. At these levels, practically every present and future good news is priced in while, to us, the times ahead are clearly not looking as benign as the markets would have us to believe. Hence we are turning extremely bearish on US equities from this point onwards. We are expecting US equities to plummet by 25-30% over the next one year. We are also turning long-term bearish on Indian NIFTY, German DAX, Dow Jones New Zealand, Brazilian Bovespa, Hungarian BUX, Jamaican Composite, Japanese NIKKEI, Russian MOEX, Swedish OMX, Taiwan TWII, Swiss SMI, and Dutch AEX”

“We believe that Gold and US 30 year treasuries will yet again top the performance charts among all global asset classes over the next one year. We expect gold to reach $2200 levels and US 30 year bonds to reach a 1.5% yield by the same time next year”

“We are turning very bullish on JPY from these levels and expect a level of sub 100 by November 2020. We also believe that the Euro is in the process of making a medium-term low against the dollar and should start a long term uptrend in the near future”

“We will be issuing more frequent global market updates from now onwards. Please feel free to get in touch with us should you have any queries on the global (or Indian) asset classes”