Global Macro Trends - Recent performance of global asset classes has shown divergence, with a significant rebound in the US dollar index and a general decline in commodities, while emerging markets have outperformed developed markets [3][8]. Asset Allocation Strategy - The "Global Barbell Strategy" is proposed as the optimal response to the evolving global asset allocation landscape, emphasizing the need for long-term investors to understand the reshaping of world order and assess the cost-effectiveness of various assets [4][11]. - The strategy is influenced by three underlying logics: increasing de-globalization, misalignment in debt cycles, and trends in the AI industry. The focus remains on an all-weather strategy that adjusts for asymmetrical pricing risks [4][11]. - A statistical analysis of historical asset volatility during US recession periods has been conducted, ranking assets by their volatility amplification factors. The order is as follows: Nasdaq, India SENSEX30, Hang Seng Tech, US Treasuries, Gold, China Bonds, Bitcoin, Convertible Bonds, and A-share dividends [4][11]. - Adjustments to asset allocation weights have been made based on the revised volatility factors, increasing the weight of Chinese convertible bonds and A-share dividends while decreasing the weight of Nasdaq, India SENSEX30, and Hang Seng Tech [4][11]. Economic Indicators and Data - The US financial conditions index has shown improvement, indicating a relaxation in overall financial conditions [5][17]. - The Citigroup US Economic Surprise Index has recorded positive values, suggesting that economic data has been exceeding market expectations [5][19]. - There is an increase in economic policy uncertainty in the US, which has negatively impacted consumer confidence [5][28]. - Historical trends indicate that deteriorating consumer confidence in the US often leads to increased volatility in the stock market [5][31]. Upcoming Economic Events - A calendar of significant upcoming economic data releases and events has been outlined, including consumer confidence indices, interest rate decisions, and GDP reports from various regions [14].

Core Viewpoint - The article emphasizes the need for long-term investors to deeply interpret the reshaping of the global order and assess the cost-effectiveness of various assets, particularly in light of the increasing risks associated with U.S. recession and the implications of new investment paradigms [3][10]. Group 1: Introduction - The article discusses two key variables at the beginning of the year: Deepseek and equivalent tariffs, which reinforce the underlying logic of a new investment paradigm characterized by increasing de-globalization, trends in AI industries, and debt cycles [3][10]. - It suggests that the global risk premium has risen, potentially amplifying asymmetric pricing risks, particularly regarding the underpricing of recession risks in major asset classes [3][10]. Group 2: U.S. Recession Trading - Historical data indicates that U.S. recession trading often begins 1-6 months before the National Bureau of Economic Research (NBER) officially declares a recession [4][47]. - Typical characteristics during U.S. recession trading include declines in U.S. stocks and industrial metals, falling 10-year Treasury yields, widening credit spreads, and defensive stocks outperforming cyclical stocks [4][47]. Group 3: Volatility During Recession Trading - The article notes that during past U.S. recession trading phases, asset volatility has generally increased, with risk assets experiencing greater volatility than safe-haven assets [5][65]. - Specific examples include the Nasdaq and Hang Seng Index showing higher volatility compared to gold and U.S. Treasuries during recession periods [5][65]. Group 4: All-Weather Strategy Model - The article proposes an all-weather strategy model to adjust for the underestimation of U.S. recession risks, focusing on the asymmetric pricing risks present in current asset allocations [6][73]. - It ranks various assets based on their volatility amplification factors during past recession trading periods, with Nasdaq, Indian SENSEX30, and Hang Seng Technology leading the list [6][73]. - The model suggests adjusting asset weights based on these factors, increasing allocations to underweighted assets like Chinese convertible bonds and A-share dividends while reducing exposure to overvalued assets like Nasdaq and Indian SENSEX30 [6][73].

Core Viewpoint - The article emphasizes the need for long-term investors to deeply interpret the reshaping of the global order and assess the cost-effectiveness of various assets, particularly in light of the underestimation of U.S. recession risks in global asset pricing [3][20][46]. Group 1: Introduction - The beginning of the year has seen two key variables (Deepseek and equivalent tariffs) that reinforce the underlying logic of a new investment paradigm, characterized by increasing de-globalization, trends in AI industries, and debt cycles [3][10]. - The global risk premium has risen, potentially amplifying asymmetric pricing risks, with current global risk assets having largely recovered to levels prior to the imposition of equivalent tariffs [3][20]. Group 2: U.S. Recession Trading - Historical data shows that U.S. recession trading often begins 1-6 months before the National Bureau of Economic Research (NBER) officially declares a recession [4][47]. - Typical characteristics during U.S. recession trading include declines in U.S. stocks and industrial metals, falling 10-year Treasury yields, widening U.S. credit spreads, and defensive stocks outperforming cyclical stocks [4][47]. Group 3: Volatility During Recession Trading - During past U.S. recession trading phases, asset volatility has increased, with risk assets experiencing greater volatility than safe-haven assets [5][65]. - The volatility amplification factors for risk assets (e.g., Nasdaq, Hang Seng Index) are higher than those for safe-haven assets (e.g., gold, U.S. Treasuries) [5][65]. Group 4: All-Weather Strategy Model - The article discusses how to adjust the all-weather strategy model to correct the underestimation of U.S. recession risks in asset pricing [6][73]. - The model suggests that the risk parity principle should be applied based on the adjusted volatility of various assets, leading to changes in asset allocation [6][73]. - The revised model indicates an increase in allocation for Chinese convertible bonds and A-share dividends, while reducing allocations for Nasdaq and Indian SENSEX30 [6][73]. Group 5: Asymmetric Pricing Risks - The current global investment landscape shows a significant underpricing of U.S. recession risks, which presents an opportunity for asymmetric trading strategies [20][46]. - The article highlights the importance of adjusting asset allocations to account for the potential impact of U.S. recession risks on various asset classes [20][46].

Core Viewpoint - The article discusses the underestimation of recession risks in the U.S. by global asset pricing, emphasizing the need for new asset allocation strategies in the context of the debt cycle [3][16]. Group 1: Economic Indicators - The current pricing levels of U.S. equities significantly deviate from the implied risks indicated by recent soft data, suggesting a potential mispricing in the market [4][8]. - The U.S. Soft CAI reflects subjective expectations of future economic conditions from businesses and consumers, which may not align with actual market performance [11][12]. Group 2: Market Sentiment - Recent market sentiment has been overly optimistic, as indicated by the VIX futures returning to a contango state, suggesting rising expectations of volatility and accumulated risks [12][14]. - The BNP global risk premium index has reached historical low levels, indicating high market sentiment towards U.S. equities [14]. Group 3: Investment Strategy - The article suggests a contrarian approach to U.S. equity allocation, focusing on defensive sectors in light of the current market conditions and potential risks [11][12]. - The analysis highlights the importance of monitoring economic policy uncertainty and its impact on equity risk premiums, which are currently misaligned with soft data indicators [9][10].

Core Viewpoint - The strategy of going long on the gold-oil ratio has been repeatedly mentioned since last year, and the recent surge in the gold-oil ratio confirms the accuracy of previous strategy recommendations. The strong performance of gold is driven by increasing uncertainties in the U.S. and weakening economic indicators, while oil faces downward pressure due to OPEC's production recovery and deteriorating macroeconomic sentiment [3][4][6]. Group 1: Gold-Oil Ratio Performance - The gold-oil ratio has reached a new high this year, validating the previous strategy of going long on this ratio [4]. - The recent strength in the gold-oil ratio is attributed to the accumulation of uncertainties, particularly influenced by frequent policy statements from Trump, leading to heightened economic uncertainty and signs of economic weakness in the U.S. [6][8]. - The S&P 500 volatility index has been hitting new highs, reflecting increased risk aversion and driving gold prices higher [6][8]. Group 2: Oil Market Dynamics - Following OPEC's announcement to restore production in April, oil prices faced significant downward pressure, nearing new lows since 2022, as sanctions on Iran did not lead to a noticeable reduction in supply [6][8]. - The weakening demand in the U.S. has contributed to a downward adjustment in global oil demand growth [9]. Group 3: Future Outlook - The gold-oil ratio is expected to continue rising due to potential geopolitical events, particularly as Trump may exert pressure on countries like Iran, which could introduce new geopolitical variables and risk premiums for gold [10]. - Despite recent temporary declines in inflation, the ongoing interest rate cut cycle suggests a possibility of renewed inflation speculation, which could benefit gold's anti-inflation properties [12]. - OPEC's production recovery is set to restart in April, with an estimated increase of about 150,000 barrels per day, potentially leading to structural oversupply starting in Q2 [13][14].