Macro Models

Our macro models are built on a single principle: markets look ahead. Asset prices respond to where the economy is heading rather than where it currently sits, which is why they consistently move before official data confirms a turn. Modeling the present is therefore the wrong exercise, since what matters is identifying where the cycle is going and positioning several months ahead of it.

This is why we separate market cycles from economic cycles. Traditional economic data such as GDP, CPI, and unemployment describes the past, and by the time it is reported, markets have already moved on, which means anchoring to those lagging figures only reacts to conditions that prices discounted long ago. We focus instead on what leads the cycle, rather than the figures that only confirm it after the fact.

Markets are a discounting machine, constantly pricing expectations of the future rather than the realities of the present. A turn in the cycle shows up in prices long before it appears in any release, so anyone who waits for confirmation is positioning into a move that has already happened. The objective is to be early by design, reading the direction of the cycle while it is still forming and acting on it before the rest of the market catches up.

This is what our models are built to do. At their core, they are regressions of the key factors that lead markets, structured to capture the trajectory of the cycle ahead of the data rather than alongside it, keeping us positioned for where the cycle is heading.