Macro Idea Generation

Methodology fused from professional trading and investment frameworks; all text is an original paraphrase.

Defaults

Preflight

Run canonical pre-flight per contracts/preflight.md. Propagate X-Agentii-Trace per contracts/x-agentii-trace-header.md.

Data Source Priority

1. Macro regime input — from macro-analysis skill (leading indicators, portfolio bias)
2. Sector data — sector-level performance, rotation signals from market data tools
3. ADR data — international equity access via ADRs from market data
4. Strategy frameworks — search_investment_strategies(domain=macro) + search_by_analogue(market_regime=...)

Methodology

Retrieval Scope

structured_only

Retrieval Strategy

Branch (d) Simple Lookup from contracts/retrieval.md: macro regime input from upstream skill. Sector and market data from data tools. Strategy frameworks and historical analogues via MCP knowledge tools. No unstructured document retrieval.

Temporal Scope

See frontmatter temporal_scope block.

Tool Allowlist

See frontmatter allowed_tools.

Protocol

This skill translates macroeconomic views into concrete trade ideas via a three-tier cascade: Macro Regime → Sector Preference → Stock Selection. Macro tells you where to look; sectors what to look at; stocks what to trade.

Detailed methodology: regime-to-sector mapping matrix, ISM sector drilling protocol, inter-market confirmation framework, ADR screening and currency overlay, and macro risk invalidation rules are in references/macro-ideas-methodology.md.

Core insight: The "consensus disconnect" applies at the macro level — the market prices one regime, leading indicators suggest another emerging. This gap is the macro edge. Macro signals lead equity moves by 4-8 weeks.

Steps

1. Macro Regime Translation: Receive regime (expansion/contraction/stagflation/recovery) and bias (long/short/neutral) from upstream. Identify dominant theme: rate cycle, credit spreads, currency, commodities. Establish transmission mechanism — WHY sectors benefit or suffer, not just correlation.

2. Sector Selection (see reference for complete matrix with transmission mechanisms):

   • Expansion (ISM > 50 rising, credit tightening): Favor Tech, Consumer Disc, Industrials, Financials. Avoid Utilities, Staples.
   • Contraction (ISM < 50 falling, credit widening): Favor Utilities, Staples, Healthcare. Avoid Tech, Consumer Disc, Energy.
   • Stagflation (low growth + high inflation): Favor Energy, Materials, Commodity Producers, Healthcare. Avoid Consumer Disc, Real Estate.
   • Recovery (ISM crossing 50, central bank accommodative): Favor Financials, Industrials, Consumer Disc. This is historically the strongest equity return regime. Avoid prior defensives.

3. Leading Indicator Deep Dive:

   • ISM PMI: Headline + New Orders (leads by 1-3 months, most important sub-index) + Prices Paid + Supplier Deliveries. Drill sub-indices for industry divergence → pair trade signals.
   • Yield Curve (10Y-2Y): Steepening > 150bp = Financials. Flattening = Growth/Tech. Inverted = defensive. Re-steepening from inverted = strongest rally phase.
   • Credit Spreads (HY OAS): > 400bp = defensive regardless. 300-400bp = stock selection dominant. < 300bp = risk-on.
   • DXY: +5%/3mo = commodity/EM/multinational headwind. −5%/3mo = tailwind.

4. Inter-Market Confirmation: Bonds (yield curve, spreads) + Currencies (DXY, commodity FX) + Commodities (copper/gold, oil) must align. All three = high conviction. Two of three = medium, reduce 25-33%. All diverging = low, reduce/eliminate positions.

5. Stock Selection: Apply quant screening ONLY to 2-3 most favored and 2-3 most disfavored industries from ISM drilling. Prioritize companies where macro catalyst directly impacts business drivers (bank NIM from rate change = direct; tech multiple from rate change = indirect, less reliable).

6. ADR International: Country selection → screen ($10M ADTV, $500M cap, 20-F available). Avoid: Chinese software/computer services ADRs, micro-cap shipping, pharma/biotech (requires specialized expertise). Currency overlay: DXY strengthening → hedge or prefer domestic; weakening → unhedged benefit. ADR universe is mostly cyclical/old-economy. Split European banks investment/retail/hybrid.

7. Macro Risk Management: Define invalidation thresholds before entry (e.g., "ISM < 48 for 2 months = exit all cyclicals"). Post-event: 1 month divergence = noise; 2 months = trend change, exit. Total macro exposure ≤ 40%. Single sector ≤ 25%. If thesis invalidates, exit ALL macro positions simultaneously.

8. MCP Integration: search_investment_strategies(domain=macro) → search_by_analogue(market_regime) → search_investment_cases(domain=macro_driven). Handoff: regime + conviction, sector matrix, top 3-5 stocks per sector, ADR candidates with FX assessment, macro catalyst timeline, invalidation thresholds.

Output File

{ticker}/{YYYY-MM-DD_HHMM}_macro-idea-generation_{affix}.md

Output Structure

1. Executive Summary — Macro regime, inter-market confirmation status, top sectors, top 3 macro-driven trade ideas
2. Macro Regime Analysis — Current regime classification, dominant themes, transmission mechanisms, consensus disconnect assessment
3. Leading Indicator Dashboard — ISM (headline + New Orders + Prices Paid + industry sub-indices), yield curve, credit spreads, DXY, commodity signals
4. Inter-Market Confirmation — Bond/Currency/Commodity alignment assessment, conviction level, divergences flagged
5. Sector Preference Matrix — Favored/neutral/avoid sectors with macro rationale and transmission mechanism per sector
6. Sector-Specific Stock Candidates — Per preferred sector: macro sensitivity, valuation context, direct vs. indirect macro impact
7. International Opportunities — ADR candidates by country/region with currency overlay assessment, liquidity check, sector warnings
8. Macro Catalyst Timeline — Scheduled macro events (ISM, FOMC, employment, CPI) with expected impact and pre-positioning windows
9. Historical Analogues — Matched regime analogues from search_by_analogue with /v/ citations, key parallels and divergences
10. Risk to the Macro View — Specific invalidation thresholds per indicator, correlation risk assessment, contingency exit protocol
11. Handoff Summary — Prioritized macro-driven ideas with conviction and sector rationale
12. Coverage Gaps — Data limitations, regions with insufficient ADR liquidity, sectors with inadequate macro data

Error Handling

Memory Load

See contracts/memory-load.md.

Snapshot

See contracts/snapshot-synthesis.md.

Final Summary (TUI)

Include ### Key Citations block with 0-10 clickable /v/ URLs.

References

• references/macro-ideas-methodology.md
• contracts/citation-and-memory.md
• contracts/output-frontmatter-schema.md
• contracts/memory-load.md
• contracts/snapshot-synthesis.md
• contracts/preflight.md
• contracts/retrieval.md