It Pays to Listen

Central Bank

Summary:

When policymakers in the world’s two largest economies have shifted to a pro-growth mindset, it pays to listen.The Fed is taking a proactive stance towards ensuring a soft landing, even as US economic data continues to look solid in aggregate.China’s Politburo has expressed newfound urgency to stabilize the housing and equity markets, as well as directly support the Chinese consumer.We have upgraded China and emerging market equities to overweight, and broadly see room for cyclicals to outperform defensives.

When the top policymakers in the world’s two largest economies are determined to support economic growth, it pays to listen. On September 18, the Fed kicked off its easing cycle with a 50 basis point cut, delivering a strong message that the central bank will not hesitate to act aggressively to ensure a soft landing. A week later, China’s Politburo delivered a forceful message that fiscal policy will be engaged to reduce downside risks to growth, notably by directly supporting the Chinese consumer in earnest for the first time under President Xi. While there remain lingering concerns on US labor market momentum and policy implementation in China, we would not underestimate renewed policymaker resolve to cut off the left tail on domestic and effectively global growth. We believe that there is further room for markets to price out recession risk across asset classes.

A proactive Fed

After the Fed kicked off its easing cycle with an uncharacteristically large 50 basis point cut, Fed Chair Powell said: “the labor market is actually in solid condition. And our intention with our policy move today is to keep it there.” Powell clearly wanted to signal a Fed reaction function that will be proactive, and was able to convince the rest of the FOMC to back it up with a powerful action. This suggests that the bar is low for the Fed to continue easing at an aggressive pace should the labor market disappoint even somewhat in the near term.

At the same time, we are not convinced the Fed will need to ultimately deliver on all the rate cuts that are priced into the market over the coming year. Hard economic data have been surprising to the upside for weeks, with consumption looking robust and initial jobless claims remaining low. Even though the Fed has only just cut rates, there are nascent signs that the easing of financial conditions earlier this year are having a positive effect on the housing market, with new home sales, housing starts and building permits all surprising to the upside of late. Finally, the US Bureau of Economic Analysis just meaningfully revised its measurements of Gross Domestic Income, leading to a sharp upward revision in the estimated US savings rate from 3.3% to 5.2% for Q2. This had been a key argument used by US economy bears that the US consumer was spending beyond its means and due for a sharp retrenchment. In short, the Fed does not look like it is behind the curve.

Exhibit 1: The personal Savings Rate was revised significantly upwards

Personal savings as a % of disposable personal income

Source: Source: BEA, UBS Asset Management. As of September 2024

An inflection point for China

Until last week, China’s stimulus measures have been woefully inadequate to cushion the economy against ongoing deleveraging in the property market and deflationary pressures. The underlying economy has suffered from low private sector confidence, which policymakers had been reluctant to support in full, amid a preference to direct resources at the supply side (infrastructure investment) over demand side (consumption) of the economy.

That said, the coordinated set of monetary and fiscal policy announcements last week designed to support the housing market, capital markets and the consumer do signal a shift in strategy from the government to revive sentiment and dynamism in the private sector. In the spirit of listening carefully when policymakers speak, we note that the September Politburo, which was the first unscheduled meeting of China’s top economic policymakers since the depths of COVID in March 2020, used forceful and focused language on steps to revive the economy.

Leaving out prior Politburo references to structural issues, moral hazard and national security, the readout showed determination to achieve its ‘around 5%’ real GDP target, stop the real estate market from falling, and acting with urgency to ensure necessary fiscal support for the economy. Most notably, language and news since the statement suggest the first genuine direct support for consumers themselves, something that had seemed ideologically off limits in prior communications. Also notable, was the stated need to ‘respond to the concerns of the people;’ this may suggest the Politburo’s growing concerns over social stability, which could have motivated a shift to demand-supportive policies where there was previous reluctance.

While there are many details to be ironed out, including questions on the size and scope of fiscal support, we think the shift in language signals a genuine turn in China’s policymaking reaction function. There is a clear message to address downside risks, and potential for additional stimulus measures announced in coming weeks.

Defensives at risk

Policy shifts from the Fed and Politburo come just as investors had started to send a wave of money towards more defensive assets. According to the popular Bank of America fund manager survey, investors in September reported their biggest overweight to defensives vs. cyclicals since May of 2020. Indeed, the UBS cyclicals vs. defensives equity basket had fallen sharply over recent months; we think it has further room to rebound from here. Separately, asset managers have built up a large overweight position in US government bonds, according to the CFTC and J.P. Morgan’s client survey. Regionally, we have downgraded US Treasuries from overweight to neutral as the US economy looks resilient. The more proactive the Fed is today, the less they will need to ultimately deliver further out in time.

Exhibit 2: Still room for cyclicals to outperform defensives

Source: Bloomberg, UBS Asset Management. As of September 2024

In equities, we have upgraded China and emerging markets, which remain attractively valued even after China’s stimulus announcements. According to fund flows specialists EPFR, China allocations in active equity funds were close to 10-year lows at the end of August. While European equities should also receive some boost from China’s stimulus, particularly exporters of luxury goods, Germany’s economic weakening and ongoing manufacturing headwinds keep us underweight. US equities remain overvalued, but as mentioned above, we see further upside for more cyclical sectors versus defensives.

More broadly, we favor overweights to Asia and European credit, where there is more attractive carry than in US credit. We also are long the Brazilian Real and South African Rand, which offer carry and further potential upside as China reduces global growth risks. Our overall position in duration is neutral, but we remain short JGBs as the market continues to underprice the further tightening we expect from the Bank of Japan.

We acknowledge that after the recent surge, there is risk of disappointment with policy delivery in China, not to mention geopolitical risks including the potential for a US election victory for President Trump who has threatened a surge in tariffs on China. The MSCI China Index is much more heavily weighted towards the domestic services economy and therefore would be less directly impacted by tariffs on Chinese exports. Still, there are risks that a shock to confidence could be a headwind for the current global reallocation back into China. As always we will be monitoring the risks to our position into upcoming risk events.

Source:UBS

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Cohen

Economic

Malaysia has put forward a strong case for the Global South’s greater inclusion in global governance, development financing and climate action, stressing that the voices of developing nations must no longer be sidelined.

Addressing the 79th United Nations General Assembly (Unga79) general debate on last Saturday, Foreign Minister Datuk Seri Mohamad Hasan outlined Malaysia’s vision for a more just and equitable world order.

“The countries of the Global South continue to face marginalisation and remain under-represented in crucial areas, such as socioeconomic development, climate mitigation, education, health and infrastructure,” said Mohamad.

He also noted that many international mechanisms are outdated and often burden developing nations while neglecting their critical needs.

Mohamad further highlighted the major challenges faced by these nations, particularly the lack of infrastructure and technology that limits their ability to participate fully in global initiatives.

“A significant challenge we face is achieving equitable access to development financing,” he said, calling for innovative financing models that support sustainability, conservation, and climate action, as well as the achievement of the Sustainable Development Goals (SDGs).

Turning to the climate crisis, Mohamad described it as “the most urgent challenge of our time”, noting that its impacts were already being felt across borders, disrupting economies and displacing communities.

“This crisis is no longer a distant threat, as it has arrived at our doorsteps,” he added, referencing scientific data showing unprecedented warming, extreme weather events, and rising sea levels.

He stressed that national efforts alone were insufficient and that the global response must include climate financing, technology transfer, and capacity building to assist developing countries.

Malaysia also reaffirmed its commitment to strengthening unity among the nations of the Global South, stressing that solidarity is key to addressing shared challenges.

“Malaysia believes in the power of Global South unity. Our vision is to promote peace, development, and a multipolar world order, where the voices of the South are empowered.

“The Global South holds immense potential to advance the cause of peace and justice. Through mutual support and cooperation, we can ensure equitable progress for all.

“The needs and aspirations of the Global South must be given due attention. It is imperative that we leave no one behind,” said Mohamad.

This year’s theme for the general debate is “Leaving No One Behind: Acting Together for the Advancement of Peace, Sustainable Development and Human Dignity for Present and Future Generations”.

Source: Theedgemarkets

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Owen Li

Economic

Thailand's $53 billion automobile industry is facing a grim future as highly indebted domestic consumers struggle to finance purchases and overseas buyers of its mainstay traditional vehicles increasingly switch to electric alternatives.

The crisis in Southeast Asia's largest car production hub has forced cuts to output and jobs, and sparked measures from the government to try and reverse its fortunes.

It is already rippling through companies such as Techno-Metal which has been manufacturing cast iron undercarriage parts for Japanese car makers including Toyota Motor and Mitsubishi Motors for more than three decades.

Production at the company's two factories in Thailand's Chon Buri province is currently only 40% of peak capacity, and its workforce has steadily declined as orders have eroded, said Deputy General Manager Nattaporn Chewapornpimon. "At the end of last year, there were about 1,200 workers. Now, there are 900 left," she said. "We've also reduced working hours to 75% and cut overtime."

Production in Thailand's automobile industry has been on a downward trend for the last year, sliding 20.6% in August on a yearly basis. And domestic sales fell to their lowest in 14 years on a 12-month moving average basis, industry data showed.

The auto industry is forecasting Thailand to produce 1.7 million vehicles this year, down from 1.9 million in 2023. Of that, 550,000 vehicles are expected to be sold domestically and 1.15 million exported.

"It's a crisis, quite a serious one, with no easy way out," said Hajime Yamamoto, a principal at Nomura Research Institute's consulting division in Thailand, adding that the stagnant home market, combined with increased competition in exports is squeezing the auto sector.

The fast-growing electric vehicles (EV) sector, which has drawn investments of over $1.44 billion from Chinese EV makers such as BYD, is unable to pick up the slack in output for the local auto parts industry which has about 2,000 companies and employs about 700,000 workers. "The Thai cost structure is 30% higher than the Chinese," said Sompol Tanadumrongsak, President of the Thai Auto-Parts Manufacturers Association.

"Thai businesses can't really do it."

TROUBLE WITH TRUCKS

At the heart of the troubles for the Thai auto sector is the pick-up truck segment, which contributed nearly half of all Thailand's vehicle sales last year, and is a fixture on its roads, from the jam-packed Bangkok streets to rural trails.

In 2023, more than 820,000 pick-ups were exported, or 67% of total produced, according to official data.

This year so far, pick-up truck exports have dropped 8.76% annually, with production down 20.51% annually to 616,549 units, data shows.

This has hit Thai firms because more than 90% of parts of pick-up trucks are manufactured locally, and the segment alone makes up 70% of the domestic parts market, according to the auto parts association.

Sales of auto parts are seen down nearly 12% this year at 519 billion baht ($15.68 billion), the research unit of Kasikornbank said in a September report.

"If auto parts SMEs close today, they are not coming back," said Sompol of the auto parts association, adding the situation was worse than it was during the Asian financial crisis of the late 1990s and the pandemic at the turn of this decade. "If it's left this way - we'll all die."

The main culprit is household debt of $484 billion, or 90.8% of Thailand's gross domestic product as of March 2024, among the highest ratios in Asia, which has put the brakes on car sales.

In the first six months of 2024, financial institutions approved about 203,000 pick-up loans, compared to 722,000 for all of 2019, credit bureau data showed.

The credit situation is so tight across multiple consumer segments that Thailand's main EV manufacturers' association has halved its sales forecast for 2024.

Existing car owners are also struggling to pay back their loans.

"Pickup truck NPLs started to show in the first quarter of 2022," said Surapol Opastien, head of the National Credit Bureau, referring to non-performing loans that have since surged 40% year-on-year to 148 billion baht ($4.46 billion).

INCENTIVES PLANNED

Industry groups are now scrambling to find solutions, with the auto parts sector pushing the government for more incentives to foreign manufacturers of traditional internal combustion engine (ICE) and hybrid cars.

"We want to be the last man standing in ICE, especially in pick-up trucks, and hybrid production ... draw auto makers to move that production here," said Sompol of the parts group.

The government plans to offer investment incentives and subsidies for hybrid manufacturing.

"The Japanese have also adapted to hybrid technology to compete and still need parts," said Surapong Paisitpattanapong, of the Federation of Thai Industry's automotive division.

Thailand's Board of Investment is also trying to entice foreign investors to form joint ventures with local auto part companies.

"This will change Chinese EVs into Thai EVs, which can then be exported," said EV association head Suroj Sangsnit, pointing to tariffs on China-made cars from the United States, EU, and India.

"There is nothing other than this that can improve the situation."

But for some Thai firms, working with Chinese EV makers has been a challenge, including because of pricing differences.

"Even if we can (supply Chinese EVs), the profits are low," said Techno-Metal's Nattaporn.

"We still have to focus on OEM (original equipment manufacturing) for Japanese brands. If they have EV plans, that would be a blessing for us."

Source: Theedgemarkets

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ING

Economic

The Conference Board measure of consumer confidence looks disappointingly soft with the headline index dropping to 98.7 in September from 105.6 in August (initially reported as 103.3). The consensus forecast was 104.0 with the outcome being lower than anyone was predicting in the Bloomberg survey – the lowest individual submission was 101.0 from 46 different groups. Expectations dropped from 86.3 to 81.7 while the current conditions index dropped 10.3 points to 124.3. This is quite an alarming decline and is the weakest outcome since March 2021 for current conditions.

The labour differential – jobs plentiful less jobs hard to get looks especially worrying (see chart below). This suggests people are now noticing a clear cooling in the jobs market and this measure has a tendency to lead changes in the unemployment rate. We are currently at levels historically consistent with the unemployment rate rising above 5% in the next few months. If that happens the market is right to expect another 50bp cut at either the November or December FOMC meetings – remember last week the Federal Reserve said it was only expecting the unemployment rate to rise to 4.4% by year-end.

This data is also consistent with the fall in the quit rate – the proportion of workers quitting their jobs to move to a new employers. That has been indicating that either the jobs on offer were not particularly attractive or that workers were starting to value tenure in case they were to be laid off. This really puts the onus on next week's US jobs report. Anything around the 50,000 mark on non-farm payrolls or if the unemployment rate resumes its upward grind would lift talk of the Fed needing to loosen monetary policy more swiftly.

Consumers are feeling a cooler jobs market, which points to further rises in the unemployment rate

Source: Macrobond, ING

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Warren Takunda

Cryptocurrency

Bitcoin still has a “bullish market structure” after another retest of $60,000 support, analysis says.

In one of his latest updates on X, popular trader and analyst Rekt Capital dismissed “fearful” market sentiment over current BTC price action.

BTC price support faces “different narrative”

Bitcoin is no stranger to $60,000 as a key psychological level, and returning to test it from above is no reason for cold feet, Rekt Capital suggests.

BTC/USD has dropped by around 6% over the past three days, previously hitting two-month highs above $66,000, per data from Cointelegraph Markets Pro and TradingView. Bitcoin Traders Stress 'Bullish' Market While BTC Price Threatens $60K_1

Bitcoin Traders Stress 'Bullish' Market While BTC Price Threatens $60K_1

BTC/USD 1-hour chart. Source: TradingView

“BTC has revisited the low $60,000s countless times over the past several months,” the X post explained.

“And yet people become equally fearful on a pullback and for a different reason every time. Same price. Different narrative. Never a loss in bullish market structure.”

Rekt Capital is far from alone in his confident sentiment. Fellow trader Jelle argues that BTC/USD is still in the process of a more substantial resistance/support (R/S) flip.

“A bit of red to start the quarter, and everyone is in full-on PTSD mode,” he told X followers.

“Meanwhile, Bitcoin's market structure is bullish again, and we're turning key S/R back into support. Don't get shaken out.” Bitcoin Traders Stress 'Bullish' Market While BTC Price Threatens $60K_2

Bitcoin Traders Stress 'Bullish' Market While BTC Price Threatens $60K_2

BTC/USD chart. Source: Jelle/X

Previously, Cointelegraph reported on various bearish BTC price predictions calling for a drop of up to 10% — or more — below $60,000 should it give way.

Entrepreneur and crypto enthusiast Mark Cullen joined that camp on Oct. 3, advising traders to prepare for a potential dip to around $57,000.

“Its taking time, but Bitcoin still appears to be heading lower,” part of an X post concluded. Bitcoin Traders Stress 'Bullish' Market While BTC Price Threatens $60K_3

Bitcoin Traders Stress 'Bullish' Market While BTC Price Threatens $60K_3

BTC/USD chart. Source: Mark Cullen/X

Bitcoin short-term holder metric hits “stack” zone

Analyzing onchain data, meanwhile, Checkmate, the pseudonymous creator of data resource Checkonchain, viewed recent price performance through the lens of profit-taking by Bitcoin speculators.

This was conducted using the short-term holder spent output profit ratio (STH-SOPR) metric, which analyzes the proportion of funds in profit when moved onchain by speculators. Such entities are those hodling the funds involved for up to 155 days.

STH-SOPR has now dipped below its center 1.0 value, arguably setting up a viable “buy the dip” opportunity.

“If Bitcoin STH-SOPR is high...don't buy, it means folks are taking profit and applying sell-side,” Checkmate summarized.

“Conversely, in a bull market, dips back to 1.0, or preferably short sharp undercuts of it are opportunities to stack the cheapest sats.” Bitcoin Traders Stress 'Bullish' Market While BTC Price Threatens $60K_4

Bitcoin Traders Stress 'Bullish' Market While BTC Price Threatens $60K_4

Bitcoin STH-SOPR chart. Source: Checkmate/X

Source: Cointelegraph

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Goldman Sachs

Economic

“It shows that you're entering a more fragile macroeconomic backdrop,” says Mueller-Glissmann, who heads asset allocation research within portfolio strategy. “For the first time in a long time, you have more concern about growth. And when you have concern about growth, that can drive larger equity drawdowns, because equities are very sensitive to growth.”

The US labor market has softened, and global manufacturing data is showing signs of more weakening. China’s economy is sputtering, and consumer spending in Europe has been lower than some economists expected. “That has broadly increased equity fragility,” Mueller-Glissmann says.

But that doesn’t mean it’s time for investors to be bearish and avoid stocks. While equity declines are becoming more likely, those declines, or dips, could be an opportunity. “Ultimately, we would want to buy the dips as they occur, he says. “The August dip was obviously an opportunity to buy in hindsight, with equities just making new all-time highs.”

The risk of a bear market is still relatively low

Mueller-Glissmann’s team uses a framework using macroeconomic and market variables to assess the likelihood of a major bear market in equities, or drop from peak to trough, of more than 20% over 12 months, as well as the risk of a shorter-term hiccup, or correction, of about 10%.

“This is really helping you to answer the question of whether you want to buy a dip,” Mueller-Glissmann says of the model.

Right now, the team’s research indicates the risk of a stock market drawdown has increased “a bit,” he says, as a result of negative growth momentum and slightly elevated stock valuations. That’s counterbalanced by a positive equity price momentum in the last 12 months, which reflects solid macroeconomic conditions. “These macro conditions usually linger — they don't disappear overnight,” Mueller-Glissmann says. “A strong positive trend in equities tells you the risk of an imminent bear market is low, because it usually takes time for macro conditions to deteriorate from such a healthy starting point.”

Even more importantly, inflation momentum has been declining for more than a year.

The US Federal Reserve reduced its policy rate in late September by 50 points to 4.75%-5%, showing the central bank is increasingly focused on economic growth, as opposed to stamping out inflation. Policymakers have scope to reduce interest rates to support the economy.

“You can have a correction, but most likely the central bank will step in and buffer the equity market and the economy,” Mueller-Glissmann says. “The Fed put reduces the risk of an equity bear market, though it cannot reduce the risk of an equity correction.”

Mueller-Glissmann’s team is “mildly pro-risk” in portfolio construction for the coming 12 months. Financial markets are “early in the late cycle” of economic growth: unemployment rates are low, profit margins are relatively high, and risk premiums for financial assets are low, for example. “All of those are typical late cycle tendencies,” he says.

Stocks should get some support because consumer and corporate balance sheets are in good shape. The savings rate for European consumers is very high, around 15%, and companies haven’t increased their debt burdens significantly. And while inflation seldom surges early in the economic cycle, that’s exactly what happened following the Covid pandemic amid supply-chain bottlenecks and pent-up demand. That resulted in a jump in interest rates, which prevented a build-up of leverage among consumers and businesses.

“There's re-leveraging potential left in the private sector that can drive growth,” Mueller-Glissmann says. “When you're early in a late cycle backdrop, which can last a long time, you want to be modestly pro-risk in your asset allocation, because equities are an asset that can still deliver good returns in these periods.”

Corporate credit, by contrast, can be a more difficult proposition. The extra yield relative to Treasuries is already low, and credit investors are still exposed to recession concerns.

The outlook for the 60-40 portfolio

Many safe-haven assets have already rallied going into the recent dovish Fed meeting. That may make some of them less likely to cushion a portfolio. But even so, Mueller-Glissmann sees scope for US government bonds to provide some buffer to stocks. Economic conditions could be conducive for the traditional 60-40 portfolio, which is split between stocks and Treasury bonds.

“The equity-bond correlation from here should be more negative,” he says. “This is consistent with the market shifting from inflation as a concern towards growth as a concern, and that means there is more benefit of 60-40-type portfolios.”

But with potentially a smaller buffer from long duration bonds there is more value in alternative safe havens such as gold investments. Stocks with defensive characteristics could also be more valuable at this point in the economic cycle, as may some strategies using option overlays.

Overall, Mueller-Glissmann says it isn’t the time to completely avoid risk in portfolios. “Correction risk is probably a bit elevated, but bear market risk seems quite low,” he adds.

Source:Goldman

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SAXO

Economic

The problem: overconcentration in one sector

When a portfolio is heavily concentrated in one sector, it can become vulnerable to downturns in that specific area. For example, technology stocks have performed exceptionally well, but if the tech sector faces challenges, an investor with high exposure may suffer significant losses. The same risk applies if you are overexposed to other sectors, like mining or financials. Diversification across different sectors can help mitigate these risks and create a more resilient portfolio.

The insight: diversify for a lower rate environment

Sectors like consumer discretionary, utilities, communication services, and energy tend to perform better when interest rates drop. Why? Because lower borrowing costs spur consumer spending, help businesses expand, and make dividends from utilities more attractive compared to lower-yielding bonds. By diversifying across these sectors, you can better position your portfolio to benefit from a range of economic conditions.

From theory to practice: how to adjust your portfolio

Let’s break down how you can act on these insights and ensure your portfolio is well-positioned:

Assess your current portfolio:

Check your sector exposure. Look beyond just stock names and consider your entire portfolio, including ETFs, mutual funds, and even options. Are you too focused on one sector?

Calculate your sector exposure:

Determine what percentage of your total portfolio is invested in each sector. For example, if you have $100,000 invested and $50,000 is in technology stocks, your technology exposure is 50%. Apply this to all sectors you’re invested in.

Set your target allocation:

Decide on a balanced allocation. For example:

20% technology (or any sector where you may be overexposed)15% consumer discretionary15% utilities10% energy10% communication services30% other (bonds, cash, other sectors)

This is just an example and not financial advice. You should adjust these allocations based on your own views, financial goals, and risk profile.

Adjust your holdings:

If your allocation to a particular sector is too high (e.g., 50% in technology or mining), reduce your position in those stocks.Reallocate to underrepresented sectors, such as consumer discretionary (companies like Disney or Nike) or sector-specific ETFs (e.g., XLY for consumer discretionary, XLU for utilities).

Consider sector-specific ETFs:

For easy diversification, use ETFs that target the sectors you want to increase exposure to. This allows you to diversify without having to pick individual stocks. Here are some of the most commonly used sector ETFs:

XLK (Technology Select Sector SPDR Fund): Provides exposure to large U.S. technology companies like Apple and Microsoft.

XLY (Consumer Discretionary Select Sector SPDR Fund): Focuses on companies that sell non-essential goods and services, such as Amazon and Nike.

XLU (Utilities Select Sector SPDR Fund): Offers exposure to U.S. utility companies, providing stable dividends and lower volatility.

XLE (Energy Select Sector SPDR Fund): Tracks major U.S. energy companies, including ExxonMobil and Chevron, and is sensitive to changes in oil prices.

XLF (Financial Select Sector SPDR Fund): Invests in U.S. financial firms like banks and insurance companies, including JPMorgan Chase and Bank of America.

XLP (Consumer Staples Select Sector SPDR Fund): Covers companies that produce essential goods, such as Procter & Gamble and Coca-Cola.

XLV (Health Care Select Sector SPDR Fund): Focuses on U.S. health care companies, including pharmaceuticals and health services like Johnson & Johnson.

XLC (Communication Services Select Sector SPDR Fund): Includes companies in the communication services sector, like Alphabet (Google) and Facebook.

XLI (Industrial Select Sector SPDR Fund): Provides exposure to industrial stocks, such as Boeing and Honeywell.

XLRE (Real Estate Select Sector SPDR Fund): Focuses on real estate investment trusts (REITs), providing exposure to the real estate sector.

These ETFs allow you to gain broad exposure to specific sectors, helping you build a more diversified and balanced portfolio without the need to choose individual stocks.

Monitor and rebalance regularly:

This isn’t a one-and-done exercise. Check your portfolio every 6 to 12 months and adjust based on market movements and changing economic conditions.

Simplifying it: an example for all

Think of your portfolio like a garden. If you only plant one type of flower, like roses (technology stocks or any single sector), your garden might look beautiful now, but it becomes vulnerable to pests or bad weather. By planting a diverse range of flowers—some sunflowers (consumer discretionary), daisies (utilities), and tulips (communication services)—you ensure your garden remains vibrant and resilient throughout the seasons.

Conclusion: the takeaway

The key message from the article is clear: don’t get caught up in predicting the next recession or market downturn. Instead, ensure your portfolio is well-balanced to thrive in any environment. By diversifying across different sectors and incorporating those that benefit from lower interest rates, you’ll be better positioned to capture gains and reduce risk, regardless of what the economy throws your way.

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

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It Pays to Listen

A proactive Fed

Exhibit 1: The personal Savings Rate was revised significantly upwards

Source: Source: BEA, UBS Asset Management. As of September 2024

An inflection point for China

Defensives at risk

Exhibit 2: Still room for cyclicals to outperform defensives

Source: Bloomberg, UBS Asset Management. As of September 2024

Source:UBS

Malaysia Advocates for Global South Unity, Fair Climate And Development Solutions at UN General Assembly

Source: Theedgemarkets

Thai Auto Sector Reels from Falling Orders and Soaring Household Debt

TROUBLE WITH TRUCKS

INCENTIVES PLANNED

Source: Theedgemarkets

US Households Are Noticing The Cooling Jobs Market

Source: Macrobond, ING

Bitcoin Traders Stress 'Bullish' Market While BTC Price Threatens $60K

BTC price support faces “different narrative”

BTC/USD 1-hour chart. Source: TradingView

BTC/USD chart. Source: Jelle/X

BTC/USD chart. Source: Mark Cullen/X

Bitcoin short-term holder metric hits “stack” zone

Bitcoin STH-SOPR chart. Source: Checkmate/X

Source: Cointelegraph

Investors May Have Opportunities to Buy the Dips in the Stock Market

The risk of a bear market is still relatively low

The outlook for the 60-40 portfolio

Source:Goldman

Market on Edge: After the Fed's Rate-Cut Bang - How to Position Your Portfolio for What Comes Next

The problem: overconcentration in one sector

The insight: diversify for a lower rate environment

From theory to practice: how to adjust your portfolio

Simplifying it: an example for all

Conclusion: the takeaway

Risk Disclosure