There’s a change in the air.
The gloomy macro clouds of the past few years are starting to lift.
Once weak and lagging parts of macro and markets are starting to stir,
and a major macro theme I’ve been tracking is showing increasing signs of finally kicking full-swing into gear — today’s chart lays it out simply.
Basically what we’re looking at here is a procession of policy pivots from big easing in 2020/21, panic tightening in 2022/23, and then back to easing in 2024/25.
The result?
Major monetary tailwinds are kicking-in right now.
And we are seeing this having a clear positive impact on some of the key areas of the global economy that have previously been in deep stagnation: manufacturing, global trade, commodities, heavy industry.
Real world, real growth, traditional cyclical parts of the economy are waking up from slumber (and seemingly taking back charge in relative stock market performance after a decade+ of software and tech domination).
If this is true, and there is plenty of emerging evidence (such as the chart below), then we are likely to see a robust and durable rally in commodities, emerging markets, and traditional cyclicals. The downside is that tech, crypto, and fixed income likely take a back seat in this type of macro environment (and that’s precisely what we’ve seen playing out over the past few months).
So it’s key development, a key theme, with major implications for investors — and something we’re tracking closely (stay tuned for more updates!).
$S&P 500(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $NASDAQ 100(NDX)$ $Invesco QQQ(QQQ)$ $E-mini S&P 500 - main 2603(ESmain)$ $E-mini Nasdaq 100 - main 2603(NQmain)$ $Dow Jones(.DJI)$ $iShares Russell 2000 ETF(IWM)$
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