Summary •2023, a year to remember. Was this time different? •Recession still on the table and what if it already started? •Markets are pricing the best of all world. •Political shenanigans are, again, to be expected in 2024. Be reactive! •Inflation, a last cyclical hiccup? •Don’t exclude a deflation

Summary * A short squeeze to remember * Recession still on the table and what if it already started! * Markets tend to anticipate recessions but the brunt of the decline still occurs in the middle of them * A less strong job market than what it seems * Don’t exclude a deflation scare

Summary * Farmer’s wisdom * Recession in sight * Households growing despair * Corporations, same dynamic * Private Equity: don’t fall for it, please! * Housing, expect non-linearity * Europe’s “chant du cygne” * China, could it be worse than feared? * Intermarket canaries * Is the Treasury looking toward next November when managing the TGA? * Buybacks

Summary * On stable instability * No convexity is not a dirty word * Households growing despair * Housing, crack appearing * Credit divergences * Breadth is outright ugly * A valuation journey * Many Japanese companies are underfollowed Macro – Instability We have dedicated our MashUp’s to the quest of the red spots, Mark Buchanan describes here

Summary * Hope springs eternal * Yield curves dynamic * Fear the unknown unknown * Debt services on the rise * The mighty bond market * Liquidity, only CTAs experienced stress * Price and earnings breadth remain weak * Intermarket movements do not bode well for equities Macro – Hope A recurring theme, and another way to show it

Summary * Soft Landing is the new “transitory” * Higher for longer becoming consensus narrative…wait until something break * Valuation agnostic strategies could put gas on the fire * Time to diverge from the benchmark? * Japan after 35 years of underperformance… Macro - Soft Landing? Here at Kroma we are in the middle

Summary * Divergences, again * Lots on Lags * Households and Corporations – tailwinds turning to headwinds * Diverging sentiment * Those mighty valuation agnostic flows * Breadth is not good * Commodities underinvestment and lack of future engineers Macro – Divergences The second week in a row that we start with a chart from the excellent J. Hussman.

Summary * Divergences * Regimes * No Landings? In your dreams! * Households – Interest rates sensitivity, employment and delinquency * Corporations – Interest  rates sensitivity, credit and more * Concentration, again * S&P 500 fair value * Volatility… beware Macro – Divergences Some analysts have noticed the increasing divergence between GDP (gross domestic products) and GDI (gross domestic

Summary * Lags * Households not impacted homogeneously * Inflation, battle won? * Central Banks and lack of humility * China, again * Markets –Liquidity, breadth, sentiment and valuations Macro –Lags Sometimes a picture is worth a thousand words. Why overcomplicate with fancy explanations… Thanks @MichaelAArouet for the following 2 gems - second one from Herb

Summary More of the same • Yield Curve • Budget Deficit • Central Banks • Inflation • Households • Housing • Liquidity, breadth, sentiment, valuations * China, China and again China! Macro – Make Math Great Again While we have some sympathy for J. Milei  resentment towards Central Banks (we recommend everyone to read M. Rothbard “The Case against

Summary * Divergences everywhere * Inflation down and then… * Employment weaker than what it seems * Households more of the same, difficulties slowly rising the income ladder * Housing wealth effect, some countries will suffer more than others * What if bond supply is almost irrelevant? Macro - Trifecta The first graph of this week

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