Macroeconomic strategy

Fathom is unique in linking together economics, financial markets and geopolitics. Our views are underpinned by a comprehensive suite of proprietary data and models, not gut feelings.

Making the two-way connection between the macroeconomy and financial markets was unorthodox when Fathom first did it in 2003. But we knew it was impossible to fully understand either by looking at them in isolation. Our clients quickly found that because Fathom made this connection we delivered improved insights into the outlook for the global economy and asset markets, including investment strategy advice.

We pioneered again by adding a third element to our intelligent, independent and data-driven research: geopolitics. Geopolitical themes like the growing power of autocracies or efforts to tackle climate change, and major events that alter the status quo, like Brexit or the invasion of Ukraine, all clearly have a profound influence on the macroeconomic outlook and on asset prices. Politics drives the economy and markets and vice versa. By truly understanding all three, we are able to provide our clients with a clear and thorough outlook on the world.

For more information about our services and to discuss how Fathom can help, get in touch with Kevin Loane, Head of Fathom USA.

Our services

Global Outlook

Fathom’s flagship research product, the Global Outlook, includes forecasts for major economic variables, risk scenarios and clear asset allocation advice. The Global Outlook uses fan charts to highlight the distribution and skew of risks to our central expectation.

Fathom clients who subscribe to our Global Outlook are individually briefed every quarter by senior Fathom staff through personal presentations, in person or online, where the content is tailored to the client’s specific needs and interests. In between we update our views and share our findings with clients through regular written research notes.

The chart shows our forecasts for US GDP growth from our Global Outlook, Summer 2022, including a range of uncertainty.

The chart shows the impacts on euro area CPI from a full embargo of Russian energy by western states.

Bespoke consultancy

For many years, Fathom has provided expert consultancy services to clients in both the public and private sectors. Our clients rely on us to supply insight into complex questions, with independent and trustworthy analysis that is data-driven and includes clear policy implications. We read the literature to remain up to date with the latest research and statistical methods, and use innovative methods to produce our own proprietary data.

Our consultancy work has included:

  • Bespoke macroeconomic modelling and scenario analysis
  • Assessing the impact of climate policies, and the opportunities and risks they provide to investors
  • Gauging a pension scheme’s vulnerability to macroeconomic and market developments
  • Compiling detailed reports on individual sectors, e.g., the state of the UK property market
  • Estimating the role and value of R&D in aerospace

Data, models, tools

Fathom has developed its own comprehensive range of proprietary data, models, and tools, which allow us to provide clients with reliable views on the economy and asset markets.

Global Economic and Strategic Allocation Models (GESAM)

Fathom’s GESAM, used to construct our Global Outlook, are among only a handful of commercially available macroeconomic models in the world. The models cover more than 80% of global GDP and incorporate data that stretch back 150 years. They are grounded in theory and estimated empirically. They are supported by a suite of financial tools and can be used to do scenario analysis. Combined, they offer our clients an unmatched understanding of the near-term prospects for the global economy and asset markets.

Financial market toolkit

Fathom combines proprietary measures of the market-implied, near-term economic outlook (Fathom Leading Indicator); liquidity (Fathom Liquidity Indicator); and risk sentiment (Fathom Risk-Off Gauge). These are complemented by factor-mimicking portfolios, which are shown to deliver alpha across a range of backtests and regime types.

Geopolitical toolkit

The Fathom Political Index is a proprietary database that measures levels of democracy in more than 150 countries, and captures the rising share of autocracies in world GDP. Fathom has also produced proprietary measures of Chinese and US interaction in Africa, and will soon be comparing these with EU interaction in the same sphere.

.

Case study

The investment arm of a major US bank outsources the modelling of its global macroeconomic scenarios to Fathom.

Insights

Turbulent geopolitics, soaring inflation and tightening central bank policies have created a narrow and treacherous path for investors in 2022, leaving them with few options to protect their portfolios.
In summer 2022 monetary and fiscal policymakers found themselves between a rock and a hard place, attempting to tackle rising inflation without killing off the economic recovery.
With the prospect of recession looming closer in the major economies, August’s research topics included whether the US is in a downturn, the peculiar shape of the 2020 dip in the UK, and the diverging economic fortunes of the US and Europe.

Get in touch

For more information about our  services or to discuss your needs and how we can help, please fill out the form below.

Macroeconomic strategy enquiry

Subscribers to our ‘Research updates’ list will be sent selected research two weeks after it is sent to our clients.

You will only get the emails you sign up for and you can unsubscribe at any time by clicking on the link at the bottom of the email. Click here to see our privacy policy.