Alternatives: How Can Investors Do More With Their Passive Equity Allocations?

Economic

Stocks

Summary:

David Elms, Head of Diversified Alternatives, and Client Portfolio Manager Alistair Sayer discuss how investors can make more efficient use of their passive inventory through modern enhanced equity index approaches.

The growth of equity index (passive) investing has been a market-changing phenomenon. The prospect of broad market exposure at a cost-effective price has seen investors consistently increasing their allocation to passives over the past decade. The end of 2023 marked a turning point, where passive investing overtook active investing in terms of assets under management (Morningstar, 31 December 2023). As the market for passives has grown and matured, the index approach has evolved along with it.

The big question facing investors in passives now is not just where to allocate, but also how to make the most efficient use of their ever-increasing passive inventory.

The evolution in equity index approaches

From the initial use of traditional market cap weighted equity index strategies, institutional allocations to index equities have adapted to include systematic index approaches that allocate to holdings based on a series of factors such as value, momentum, low-volatility and quality. In recent years the inclusion of environmental, social and governance (ESG) factors within index construction has become more popular. This includes systematically tilting allocations towards ESG leaders and/or leaders in climate change emissions reduction.

But what is the potential next evolution in this journey, that can make an index allocation work harder for investors?

The answer might lie in making more efficient use of the stock lending value chain.

So what is stock lending?

A passive index portfolio can generate excess returns by temporarily loaning out a stock, typically to a financial institution (e.g., an investment bank).

These assets are typically borrowed by the investment bank to lend out to third parties to facilitate further trading activities, such as short selling, or hedging. The fee earnt by the passive index portfolio for stock lending tends to be very low. On a typical equity portfolio, the fee can be anything from around 1 to 2 basis points (bps) (0.01% or 0.02%) per annum to perhaps 5 bps, although it varies depending on the region and availability of the stock inventory (i.e., small-cap stocks can receive a higher fee).

The stock lending chain

Investors who allocate to passives will be familiar and comfortable with the use of basic stock lending (Exhibit 1). However, it is the next step, the subsequent lending chain, where the process gets interesting.

Alternatives: How Can Investors Do More With Their Passive Equity Allocations?_1

Once investment banks have borrowed a stock that they will lend those stocks on to investors that could, for example, sell them to create a short position. The investment bank, effectively acting as a ‘middleman’, can charge around 30 to 50 basis points per annum for this (0.3% to 0.5%), pocketing the difference between that fee and the small fee paid to borrow the stock in the first place.

The value chain opportunity

Stock lending can be an inefficient space, dominated by investment banks. The question is whether a passive portfolio could extend into that inefficient domain so that investors take more of that value chain for themselves.

Can investors potentially improve their outcomes by working their passive index assets harder through innovative enhancement strategies?

Rather than letting a bank and hedge fund profit from the additional revenues generated through the lending stock, investors can extend the value chain by underweighting certain stocks held in a passive inventory and substituting with alternative positions to generate additional returns.

The argument is that, by disintermediating investment banks and hedge funds, it is possible to monetize that whole revenue stream – the combination of investment bank stock lending fees PLUS returns from alternative trading strategies on the stock positions – within an enhanced index portfolio.

This applies to stock that investors already own in their passive portfolio, meaning that it can be implemented without having to borrow stock (at a cost) and selling it short, although it does mean forgoing the potential stock lending revenue on any underweight positions.

What are the key advantages for investors?

Delivering enhanced returns from a passive core

Investors can potentially tap additional return from the existing stock lending value chain.

Diversification from other equity approaches

It offers a style agnostic approach with returns that have historically been uncorrelated with traditional long-only investment techniques, potentially offering diversification benefits.

Increasing access to alternative investment ideas

Investors have been craving alternative sources of growth. This investment approach can provide an efficient and liquid route to accessing alternative investment ideas.

What’s the secret sauce?

Passive allocations have been a popular choice for those investors keen to reduce the cost of their investments, and benefiting from the visibility that comes with allocating to large benchmark indices. Ultimately it comes back to whether or not investors want to leave potential performance on the table. A curated enhanced index approach, built using experience and expertise, facilitated via dedicated infrastructure and systems designed to help manage opportunities, can potentially help to make a passive allocation work harder for investors, within an existing risk and price framework.

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Forex

Political

Economic

The USD is likely to fare well in the run-up to the 5 November US elections

The FX market likes to distil issues, such as the 5 November US elections, into a simple binary outcome, but this would be a mistake. The complexity is not only a function of the result being too close to call, but also the result of there being numerous implications, impacting fiscal, trade, and monetary policy, among other aspects. In addition, the impact may vary over time.

Historically, the USD has fared well in the run-up to US elections, likely reflecting the “safe haven” allure amid heightened political uncertainty. That is likely to be true over the coming weeks. Once the result is known, we will see the next response in the FX market (we run through four possible outcomes below), perhaps persisting for days, weeks, or months. But it would be a mistake to assume that he post-result reaction will continue to set the tone into 2025.

There are plenty of ways in which the FX market could stall or reverse that initial move, for example, if actual policy outcomes fail to match expectations, or if other factors supersede political forces as the key FX drivers.

A Republican clean sweep could see the USD rallying, but further strength may be limited into 2025

A Republican clean sweep: The USD is likely to rally sharply if there are signs of future fiscal stimulus that would temper market expectations for the Federal Reserve (Fed) easing in 2025. The likelihood of higher trade tariffs would also support the USD, particularly if they feed inflation expectations and further temper pricing for Fed rate cuts. Potential corporate tax cuts and deregulation expectations might draw investment flows into USD assets. Nevertheless, the USD could face headwinds, including concerns that the Republican Party would talk down the USD or call for lower US interest rates. Rising risk appetite might also temper the “safe haven” USD. But we would expect bullish USD forces to win out initially. Nonetheless, a USD rally would have its limits entering 2025, as it would not be guaranteed that actual delivery of policy would fully match those expected by markets.

A Republican presidency and a divided Congress could see the modest initial USD strength extending into 2025

A Republican presidency, divided government: The initial USD reaction is still likely to be bullish, with markets likely to anticipate higher trade tariffs (and perhaps inflation), and a more business-friendly regulatory backdrop. But the USD would not benefit from the fiscal easing expectations that a clean sweep would have brought. A divided Congress could foster a more fractious debate regarding tax cuts expiring in 2025, which could create a “fiscal cliff” mood in markets. Most likely, however, Fed policy would return as the dominant USD driver in 2025, amid fiscal gridlocks. We believe a modest initial post-election USD rally could extend into 2025.

A Democrat clean sweep may see an initial weakness in the USD before recovering into 2025

A Democrat clean sweep: This outcome could point to a sling-shot path for the USD. The initial post-election reaction is likely to be USD negative, as markets price out the potentially USD-positive aspects that a Republican presidency might have fostered. But that reflex would be unlikely to set the tone for the USD into 2025. A clean sweep could still belatedly foster market expectations for USD-positive fiscal stimulus, albeit with different elements to a Republican clean sweep. This could temper market expectations for the pace of Fed easing in 2025, with attendant USD upside. Any initial USDnegative reaction in November could reverse in 2025.

A Democrat presidency and a divided Congress is a status quo outcome, but likely with some initial USD weakness

A Democrat presidency, divided government: On paper, the ultimate status-quo outcome, but one which could see some initial USD weakness, amid adjusting to price out fiscal stimulus expectations. This scenario should not carry lasting implications for the USD, but other drivers, such as Fed policy and the pace of easing elsewhere, would likely be more dominant.

To stay updated on all economic events of today, please check out our Economic calendar

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Cohen

Commodity

Brazil’s Petrobras plans to extract every last drop of oil from existing oil fields, Bloomberg has reported, while also searching for fresh deposits to avoid a decline in output in the next decade.

As part of these plans, Petrobras will seek to revitalize production from aging fields, such as those in the Campos Basin, where recovery rates have declined to just 17% and this “bothers” the company’s management, according to chief executive Magda Chambriard.

The guiding principle for the company would be “all the oil counts”, with the detailed plan for its future production to be made public next month.

The news comes on the heels of a report that Petrobras would spend less capital next year, cutting its capex plan to $17 billion from an earlier target of $21 billion to make it more realistic. The five-year capex plan for 2024-2028, however, remains at 31% higher than the previous five-year period.

Meanwhile, efforts to increase oil and gas production are bearing fruit. Petrobras produced 2.7 million barrels of oil equivalent in the second quarter of the year, which represented a 2.4% increase as the company ramped up production at five platforms and started 12 new wells, of which eight in the Campos Basin and four in the Santos Basin.

The ramp-up follows a 25% drop in Brazilian output earlier this year amid platform maintenance. Now, platforms are returning from maintenance and producing more oil. Earlier-than-expected starts to some projects are also set to help Brazil recover its oil output later this year, and production could exceed forecasts.

For next year, the International Energy Agency has forecast that Brazilian oil production would go up by 190,000 barrels daily. With Petrobras accounting for as much as 90% of that total, that increase will fall to its platforms. Yet the company is adding production capacity of a lot more than 190,000 bpd right now: by the end of the year it would add three new floating production and storage vessels with a combined production capacity of over 500,000 barrels daily.

Source: OILPRICE

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Justin

Central Bank

French government bonds (OATs) have been under pressure for much of 2024 amid fears that a higher-than-expected fiscal deficit would significantly increase the issuance of debt. Those fears were confirmed with the 10 October budget and OATs are facing renewed scrutiny from investors with a potential rating downgrade on the horizon.

The first bullet was narrowly dodged on Friday when Fitch left its AA- rating on France unchanged but downgraded its outlook on the sovereign to ‘negative’ from ‘stable’. Fitch said the negative outlook reflects its expectation that wider fiscal deficits will lead to a ‘steep rise’ in government debt to 118.5% of gross domestic product by 2028. Fitch also expects the budget deficit to widen to 6.1%, significantly exceeding the 5.1% target it forecast in April. The rating agency added that ‘high political fragmentation and a minority government complicate France’s ability to deliver on sustainable fiscal consolidation policies’.

To cover the higher deficit, France has set out a funding plan comprising a record gross issuance of €300bn of OATs in 2025 compared to €285bn of issuance this year and €270bn in 2023.

In a note on Monday, analysts at Rabobank said that based on Fitch’s analysis, the credit rating agency ‘could have easily justified a downgrade’, which was the analysts’ expectation. But rather than breathe a sigh of relief, all eyes will now turn to 25 October when it will be Moody’s turn to present their verdict on France’s credit rating, which it currently holds at AA with a stable outlook.

Investors and market participants believe a downgrade by Moody’s will have the biggest repercussions for the wider European public sector bond market. Not only will a downgrade directly impact OATs, but also French agencies and sub-sovereigns, such as CADES and Unédic who hold an implicit guarantee from the French government.

Analysts at DZ Bank argue that a rating cut by Moody’s will also impact European public sector issuers including the EU, whose credit rating by Moody’s is ‘particularly sensitive to rating changes for countries with a rating of at least Aa2’. Fitch and S&P only consider the ratings of Germany and the Netherlands to be most significant for the EU’s credit rating.

Meanwhile, the European Financial Stability Facility’s credit rating is based on the guarantees of the euro area member states. A downgrade to France as the second largest guarantor would also have an impact to EFSF’s credit ratings according to Fitch and S&P’s assessments. However, Moody’s does not view individual rating changes as a direct impact to EFSF’s rating.

From a trading perspective, OATs have held up well in recent weeks with the yield on France’s 10-year trading at 3.04% and the 10-year OAT/Bund spread at 76.7 basis points on Monday. But these numbers are slightly arbitrary in that France already trades and behaves like single-A or even BBB sovereign. For example, France trades above Belgium (double-A), whose 10-year government bond was yielding 2.88% on Monday, and is rather more akin to the likes of Slovenia (single-A) and Spain (BBB) whose 10-year bonds were yielding 3.01% and 3.02%, respectively. This year, the yield on France’s 10-year government bonds traded above Spain’s for the first time since the 2008 financial crisis in a further sign of investors’ concerns with France’s economic and political risks.

In May 2024, S&P was the first of three major credit rating agencies to downgrade France this year when it pushed the sovereign from AA to AA- based on fears of an increase in government debt and a widening budget deficit. That decision was seen then as more of a graze than a wound ahead of the legislative elections and budget. Now it seems that France could be left with a bruise for a while yet.

Source: Burhan Khadbai

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JPMorgan

Energy

Economic

Recent years have seen a significant acceleration in clean energy investment and grid decarbonization alongside the implementation of the Inflation Reduction Act passed in August 2022. Actual clean energy investments in the U.S. have totaled $493Bn in the last two years, a 71% increase from the two years prior, with strong investment gains in the electric vehicle (EV) supply chain, solar manufacturing and battery technology. Indeed, private clean investment has surpassed federal spend by 5-6x and accounted for more than half of total U.S. private investment growth since the IRA’s enactment.

Despite this progress, supply-side barriers have been a constraint. Permit delays and transmission difficulties have contributed to long interconnection queues for the grid. Meanwhile, power vulnerabilities exposed by climate disruptions and the mounting appetite from data centers have added new urgency to securing and expanding the grid. Ahead of these challenges, the U.S. presidential election adds uncertainty around the future of IRA clean energy incentives and subsidies.

Across the two presidential outcomes, we consider:

A Harris administration would likely be “status quo”

With continued focus on implementation of the IRA, including new policies such as clean energy “tech-neutral” tax credits that extend to a more inclusive range of existing and potential future technologies.

A Trump administration could take aim at certain pieces of the legislation

EV tax credits and offshore wind subsidies may be most at risk, while new leadership at the Department of Energy could delay new grants and loans. Executive agencies could also amend the interpretation and application of policies to weaken their implementation, decisions that do not require legislative process.

However, a full unwind of the IRA seems highly unlikely because:

Stimulating U.S. manufacturing and increasing competitiveness with China are two areas have significant bipartisan support

With tax credits decreasing costs by an estimated 34%, the IRA has made U.S.-based chip manufacturing highly competitive with China and expanded the so-called “battery belt”.

The IRA has yielded beneficiaries across party lines

A Republican administration would need to balance any desire to repeal the legislation with the significant investment flow and job creation flowing to Republican districts.

As such, the IRA seems unlikely to be significantly dismantled and even if some policies were diminished, the secular inertia behind the U.S. energy transition will continue. The renewable share of U.S. final energy consumption is still just 8%, and while that’s grown from 4% in 2010, the journey has just begun. Still, investors should take heed to the evolving winners and losers that can arise as policy incentives potentially change, hyperscaler demand mounts and grid inefficiencies seek new solutions. How Might the U.S. Election Affect the Clean Energy Transition?_1

How Might the U.S. Election Affect the Clean Energy Transition?_1

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Justin

Economic

The once-booming tech sector in Singapore has been hit hard by lay-offs in recent months, with some of the biggest names in the business axing jobs left, right and centre.

Earlier in October, consumer electronics giants Dyson and Samsung laid off an undisclosed number of workers in Singapore on the same day.

In July, fintech company MoneyHero laid off 80 staff as a cost-cutting measure. In the same month, logistics technology company Ninja Van sacked 5 per cent of its workforce in Singapore, before suspending operations of a subsidiary firm in Vietnam as it seeks to resolve issues over owed salaries and employee social insurance contributions.

The Straits Times explains why the lay-offs happened and what tech workers can do about it.

Why are more tech lay-offs happening?

Restructuring, rising employment cost and slow growth forecast are among factors leading to job cuts.

UOB senior economist Alvin Liew said the “earlier rounds of retrenchments” may have been caused by a combination of economic uncertainty, rising interest rates and cases of overhiring during the pandemic.

“But the underlying factors most likely have evolved due to the rise of the application of artificial intelligence (AI),” he noted, adding that the retrenchments have not been limited to Singapore and have been taking place in key global tech centres since 2022.

Mr Faiz Modak, associate director for tech and transformation at recruitment firm Robert Walters Singapore, said that while many firms “hired aggressively” after the Covid-19 recovery phase, the global market witnessed a slowdown in 2023.

Companies want to focus on profitability and productivity, so they are “consolidating their workforce with a right-sizing approach”, he added.

What is happening to the tech landscape?

The landscape has changed, said CGS International economic adviser Song Seng Wun.

“Companies answerable to their board members... have to become a bit more ruthless in managing their costs, especially since the cost of money is no longer as free as it used to be.”

He was referring to the impact of inflation and climbing interest rates on companies, which used to borrow money at almost close to zero interest. In short, it is more expensive to borrow money now.

Additionally, he noted a very competitive landscape where brands are “catching up on quality” and are able to sell their products at cheaper prices.

So it all boils down to whether there is demand for these “modern services” and if customers are paying for them, Mr Song told ST.

He said when companies stop making money on a particular product, coupled with pressure from board members and shareholders, it makes a case for cutting certain divisions and finding something new. “So it’s very brutal in that sense.”

Shorter business cycles where consumers demand quick product replacements have posed challenges as well.

“It’s less about a recessionary condition unfolding, but more cases of consumers being faced with a lot of choices, so they can be more selective in what they are spending on,” Mr Song said.

What type of tech roles will bear the biggest impact?

UOB’s Mr Liew said jobs displaced by AI within tech companies could likely be in the traditional areas of communications, customer services, basic programming, basic data analysis and financial reporting.

Meanwhile, Mr Modak noted that most of the jobs impacted within the tech industry would be support functions or operational roles that can be offshored to lower-cost locations such as the Philippines, Vietnam and India.

“We have also witnessed some software engineering functions being impacted at tech start-ups as funding from venture capitals have been conservative. As a result, the start-ups are focusing on generating profits to encourage further rounds of investment,” he added.

Mr Modak also noted that the banking and finance sectors, which have been major players in hiring tech professionals, have slowed recruiting in Singapore and are looking at offshoring some roles to markets like India, Thailand and Dubai.

Should tech workers worry and what can they do?

While the rise of AI and machine learning continue to stir up job displacement concerns, Mr Modak pointed out that many industry players also believe they can help tech professionals perform their jobs better.

He encouraged job seekers to be aware of the latest technology and trends, and continue finding jobs in tech that will allow them to upskill.

“They should always be eager and continue to learn. Early adopters (of technology) can find themselves in a strong and employable position in the market and will continue to be in demand.”

Mr Song also highlighted that while there are job losses, new jobs are being created: “Companies that are doing well and holding up to the challenge are hiring.”

For instance, he noted that retrenched tech-savvy sales people working in a certain sector could very well be easily employed by another firm in another sector.

Are there newer types of in-demand tech roles?

Experts say there is ongoing demand for AI-related roles, including machine learning engineers and prompt engineers.

Those in data engineering, cyber security and digital transformation fields will continue to be sought after.

Mr Modak said in-demand roles include senior and skilled people “responsible for driving topline revenue”, and those with experience working at a global company with knowledge of the latest technology stacks.

Are unemployment rates going up, and what’s the outlook for the tech labour market?

The latest purchasing managers’ index (PMI) from Singapore’s tech manufacturing industry suggests that the outlook over the next few months is “fairly positive”, said Mr Song.

PMI readings for electronics rose to 51.5 points in September, up from 51.3 in August. Readings above 50 reflect growth while those below represent contraction.

“While it is hard to say if the net hiring and retrenchments will result in an overall increase in headcount for tech companies, we are fairly certain that the median wages will be increasing,” said Mr Liew.

Mr Modak noted that hiring is “usually slow” during this time as companies are budgeting and planning for the new year.

The volatile market situation globally, including the upcoming presidential elections in the US and stock market trends, have made it hard to predict if there are more lay-offs coming or the extent of them, he added.

“Many firms are still adopting a conservative approach towards hiring for this year. However, with every downturn there is always a recovery, and we are optimistic that it’s a matter of time for the recovery trend to happen.”

Source: Straitstimes

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SAXO

Political

Economic

US Election Countdown: the Best and Worst Scenarios for the Market_1

This week: The two election scenarios that will likely trigger the most immediately positive and negative market reactions

The polls have shown further modest tightening for the presidential race, with Harris shrinking lead in the polls pointing to higher odds of a Trump win. Polls in the key seven battleground states are impossibly close and we seem almost guaranteed a nail-biting Election Night on November 5th.

This week, we look at the two scenarios that would likely offer markets the clearest “playbook” for the road ahead, making them the most positive and negative of the possible outcomes for the market. Of course, all of this scenario analysis is untestable, as we will only get one outcome, but here goes…

The two election scenarios that could prove the most immediately negative on the one hand, and the most positive on the other are both scenarios involving a Harris victory for president. More on why below.

In the meantime, in any Harris victory scenario it’s important to consider an additional critical risk, one that is most urgent for the Mag 7 stocks: Would a Harris administration reappoint the avowed anti-monopolist Lina Khan as Chair of the Federal Trade Commission (FTC) when her term ends next year? While Khan has had limited success in taking on the monopolist companies she criticizes like Amazon, Meta and Google parent Alphabet, she is the strongest voice in Washington arguing that these companies need breaking up and has further major ambitions to do so.

Harris has yet to reveal whether she will reappoint Khan. The outlook for Mag 7 stocks is always worth mentioning because these 7 stocks have a market value of over USD 16 trillion, making them worth more than all the stocks in the Japanese and Chinese stock markets combined. A failure to reappoint Khan would be a signal that the Democrats are prioritizing keeping their largest campaign donors happy rather than moving against these enormous and enormously influential info-tech monopolies on ideological grounds.

US Election Countdown: the Best and Worst Scenarios for the Market_2

Much is at stake for many of the US’ largest companies in the event of a Harris victory, as the huge question looms whether Harris would reappoint Lina Khan as FTC Chair next year. Take the case of Google parent Alphabet. Since its IPO back in 2004, the company’s shares are up some 80 times in price, as it became one of the largest companies in the world, reaching a market value of over USD 2 trillion. Its crown jewel is the control of the online search market and it also controls the Google play store on Android phones, which alone drove USD 45 billion in revenue last year. That clear monopoly power has brought attention from US regulators like Khan.

Last week, the US Department of Justice filed a proposal to dismantle the Google monopoly entirely. The company's stock hardly reacted to the news, as the wheels of justice turn extremely slowly in the US, especially for such a complex case and a large company with an army of lawyers. Observers suggest any real crunch time for the company on the issue might not come until 2027. The company could react quite positively, however, should it emerge that Khan will not be reappointed as FTC Chair, a certainty if Trump wins the presidency, and unknown if Harris wins.

The most negative and most positive election outcome scenarios

The long-term implications are immense for investors should the anti-monopoly forces one day succeed in breaking up or significantly disrupting the business model of Mag 7 stocks like Apple, Alphabet, Meta, Amazon, Microsoft and even Nvidia. But the timelines are very extended, probably years. With only three weeks to go until Election Day, the more immediate question is how the market will treat the election outcome the day after the election and in ensuing weeks. In the past few weeks we’ve covered the two most likely Trump scenarios: Trump 2.0 in which Trump both wins and the Republicans gain control of both houses of Congress, and “Trump gridlock” in which the Republicans only control the White House and Senate. On that latter scenario, the market may be badly underestimating the likelihood of that Trump gridlock outcome, as the Democrats might take control of the House in a close election. Polymarket.com only puts the odds of a Trump gridlock scenario at 13%, versus 38% odds for a Trump 2.0.

Now let’s consider the two Harris scenarios and why they are so extremely different. The most immediately positive scenario for the market could be “Harris gridlock”, in which Harris wins the presidency, but the Democrats lose control of the Senate, even if they do win the House. This scenario is more or less the current market “status quo” that has brought us all time highs in stocks even before the election. While Harris winning means that US companies wouldn’t get fresh corporate tax cuts promised by Trump, it also means that the US economy would avoid Trump’s promised new hefty tariffs. Likewise, the Trump agenda would likely have been more USD positive, at least in the beginning, and a weaker US dollar more likely under Harris is better for global growth. The Harris gridlock scenario is priced in betting markets as the second most likely, currently 26% odds.

On the other hand, a Democratic sweep is the most obviously negative scenario for markets in the days after the election. This is very straightforward: The Democrats have promised to raise corporate taxes from 21% to 28% and the anticipation of higher tax rates would mean that company valuations would need a swift, one-off adjustment lower. Just as the very positive impact of Trump’s chopping the corporate tax rate from as high as 39% to a flat rate of 21% after the 2016 election, this could mean a sell-off of several percent or more in US stocks. A Democratic sweep scenario would be a huge surprise, given the current betting odds of around 18% (and this looks too high – the Senate election map is extremely difficult for the Democrats at this election. It should perhaps be 10% or lower odds).

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Alternatives: How Can Investors Do More With Their Passive Equity Allocations?

The evolution in equity index approaches

So what is stock lending?

The stock lending chain

The value chain opportunity

What are the key advantages for investors?

What’s the secret sauce?

FX Viewpoint: USD and Four US Election Scenarios

The USD is likely to fare well in the run-up to the 5 November US elections

A Republican clean sweep could see the USD rallying, but further strength may be limited into 2025

A Republican presidency and a divided Congress could see the modest initial USD strength extending into 2025

A Democrat clean sweep may see an initial weakness in the USD before recovering into 2025

A Democrat presidency and a divided Congress is a status quo outcome, but likely with some initial USD weakness

Petrobras Puts Production Focus on Existing Oil Fields

Source: OILPRICE

France Credit Rating Downgrade Will Have Wider Repercussions

Source: Burhan Khadbai

How Might the U.S. Election Affect the Clean Energy Transition?

A Harris administration would likely be “status quo”

A Trump administration could take aim at certain pieces of the legislation

Stimulating U.S. manufacturing and increasing competitiveness with China are two areas have significant bipartisan support

The IRA has yielded beneficiaries across party lines

St Explains: Why are Tech Companies in S’pore Laying Off People, and is It Going to Stop?

Why are more tech lay-offs happening?

What is happening to the tech landscape?

What type of tech roles will bear the biggest impact?

Should tech workers worry and what can they do?

Are there newer types of in-demand tech roles?

Are unemployment rates going up, and what’s the outlook for the tech labour market?

Source: Straitstimes

US Election Countdown: the Best and Worst Scenarios for the Market

This week: The two election scenarios that will likely trigger the most immediately positive and negative market reactions

The most negative and most positive election outcome scenarios

Risk Disclosure