Macrotrens

Macroeconomic trends significantly influence asset returns: they simultaneously impact risk aversion and risk-neutral securities valuations, macrotrens.

Macrotrends reveal how consumers are responding to the global drivers of change and represent the value shifts defined according to emerging attitudes and behaviour among people globally. These shifts are supported by consumer-facing innovations, products, services, experiences and communications that address a need. At The Future Laboratory we define macrotrends by using intuition, our experience and data. We use four stages of research to identify and qualify a macrotrend — inspiration, validation, interrogation and finally the strategic implications of the trend for businesses and brands. Every year we publish over eight global macrotrends exclusively for members of our trends intelligence hub, LS:N Global. Find out more about our macrotrend services below, or please click the link to book a meeting with our team.

Macrotrens

For as long as it's existed, the global economy depended on the physical flow of people, goods, and services. In recent years, increased digitization has shifted the physical economy to a digital economy. The data economy stems from the abundance of data created from these digital interactions. As a result, the physical locations at the centers of trade are also now the centers of enterprise data creation, processing, and exchange. This data creation and digitization generates a significant revenue opportunity. But with the advent of this data growth, Data Gravity also increases. Data Gravity is the attractive force caused by data creation and exchange, drawing applications, servers, and other data. As data creation and exchange grows, it accelerates exponentially due to this attractive force. In centers of data creation and exchange, this explosion of data can be onerous for legacy servers and applications, and Data Gravity can cause challenges that impede efficiency, security , customer experiences, and innovation on a global scale. There are five macro trends that influence the data economy and therefore Data Gravity. They are:. The advance of high-performance computing applications like artificial intelligence AI and the high volume of data being stored and processed augment enterprise workflows. As enterprises evolve AI-led services and products, this will also increase the volume of data exchange globally. The increase in regional regulations means enterprises need to formalize their data localization strategies.

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In an ever-changing landscape, understanding the trajectory of macrotrends and economic forecasts is critical to making informed investment decisions. Subscribe to receive the latest macroeconomic commentary from New York Life Investments. Subscribing gives consent to receive personalized online ads from NYL Investments. Rates have been a driver of equities lately and where rates go is ultimately going to be determined by inflation. Julia Hermann and Michael LoGalbo navigate the maze of recent short-term dollar movements and how this can translate into an international investing approach.

Many believed that would be the year we finally entered a post-pandemic world, and businesses could focus on future growth and advancement. However, brought a major international conflict that disrupted virtually every aspect of the business. With this in mind, we present seven seismic-level macro trends that have the potential to massively shape the current business climate. In December the Federal Reserve increased interest rates to the highest level in 15 years. These recent hikes are some of the most aggressive Fed moves in years.

Macrotrens

However, respondents are less likely now than in the previous two surveys to report worsening global conditions—or to expect them in the months ahead. They continue to point to geopolitical conflicts and inflation as the most pressing economic risks over the next year, while concerns about rising interest rates grow domestically. In the latest survey, we also asked about much longer-term risks: potential global forces that might affect organizations over the next 20 years. Respondents say technical innovation and energy and natural resource considerations are the two most likely to affect their organizations, and most say their organizations are taking steps to prepare for each of those factors. Views became more somber in the June survey. Since June, respondents have become less negative about the global economy. They are much more likely now than in June to report improvement or stable conditions and to expect conditions to improve or stay the same over the next six months Exhibit 1 , though they remain more likely to expect declining than improving conditions. Respondents continue to be about as likely to expect improvement in their economies as they are to expect declining conditions over the coming months.

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Elastic Brands: Forget advertising campaigns and branded content. On the other hand, investment spending was held back by cheapening capital goods and declining government activity view post here. With our economic outlook in mind, we make the compelling case for rebalancing stocks and bonds, and diversification. While these sources are often portrayed as competing investment principles, they are highly complementary. On these occasions, indicators need to be modified, become parts of larger formulas, and be split into different parts. As to equity , research indicates a close link between macroeconomic developments and the two key components of stock valuation: earnings and discount rate expectations. Empirical research suggests that changes in CDS term premia have predicted exchange rate changes and local stock returns in the past. With a background in creative strategy, anthropology and graphic design, Savannah curates and contributes to the visual narrative of LS:N Global, alongside leading visual research for a number of annual macrotrends and sector reports. For example, GDP growth, the broadest measure of economic activity, is typically only published quarterly with one to three months delay. The influence of macroeconomic trends is widely recognized by investors, leading to a keen interest in monitoring economic data releases and employing economists to analyze them. Empirical studies show that bond and equity markets are more likely to post large moves on days of key data releases than on other days view post here. Detecting data distortions: Experts can recognize data distortions caused by factors such as changes in tax policies, regulated prices, natural disasters, or calendar effects. Often enough, the directional effect of economic change is straightforward, following standard macroeconomic theory and market experience. Policy uncertainty is a key component of equity return volatility that improves predictions that are otherwise based on historical and implied equity volatility alone view post here.

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Currencies of countries in a strong cyclical position are expected to appreciate against those in a weak position. Our global clientele is made up of owners and employees from over leading brands who use our macrotrends on a daily basis to future-proof their business. Also, macroeconomic indicators of competitiveness of currency areas are significant predictors of FX forward returns and a solid basis for pure macro economic trading strategies view post here. Generally, a macro trend indicator can be defined as an updatable time series that represents a meaningful economic or financial trend, and that can be mapped to the performance of tradable assets or derivatives positions. For example, equilibrium real interest rates and long-term inflation trends are essential factors for fixed-income strategies view post here. This is opposite to data mining and requires that we set out a formula based on our understanding of the data and the economy before we explore the actual data. Combinations of positive impulses and low vulnerability would be clear positive signals. Discover each of our macrotrend presentations below — or book them together as a presentation collection. Request more information:. They can identify potential limitations or alternative explanations that statistical methods alone may overlook. Macrosynergy Research formerly Systemic Risk and Systematic Value is a free educational site dedicated to responsible macro trading strategies. They are:. Isolating the macroeconomic component from these factors requires theoretical modeling and statistical methods. Amidst a backdrop of intense geopolitical turmoil, we explore the potential domino effects that could impact macro economic trends. Improving bank lending conditions bolster aggregate demand in the economy and the creation of leverage.