Bolting Horses

Published on: July 14th, 2019

A dovish FOMC, a modest warming of US/China relations at G20 and an unedifying EZ job wrangle all combine to set the scene for an interesting but tricky summer. A market straining at the bit for easier global monetary and fiscal conditions may have to wait longer than some would like, but the direction of travel is now clearer.

Comments

  • SS
    Shanthi S.
    15 July 2019 @ 23:45
    Thank you very much! Great!
  • MS
    Mark S.
    15 July 2019 @ 14:49
    Hi Julian what's your timeline for the short bond trades as in when would you see these trades hitting your targets?
  • P
    Phil .
    15 July 2019 @ 13:29
    Once again Excellent- as a Marco Newbie this format is so, so useful. As commented before the "Trade Recommendations" with Stop Levels etc at the end of the report are exactly what I've been looking for. Also to second "Lawrence M."- the provision of other ways of trading futures (e.g. Ultra ETF’s) also works a treat as I can now feel confident dipping my tiny toes into this part of the market. If you can continue to suggest different financial instruments (where appropriate) that can express a Trade Idea for the those Traders/Investors with less experience it would be greatly appreciated. Thanks again Julian.
  • LM
    Lawrence M.
    14 July 2019 @ 23:38
    Appreciate the ETF option for those of us inexperienced in futures trading. Looking forward to putting on my first futures trade w/this year subscription renewal. Still, the ETF option makes the recommendation actionable tomorrow (for someone like myself who's still learning the ins and outs of futures). Thanks!
  • NI
    Noah I.
    14 July 2019 @ 23:04
    I still think gold is the best trade by far in this environment. There’s only one way out of this debt burden: negative real rates. That could mean rising inflation and rates not keeping pace or low inflation and zero to negative rates. No clue where it is headed in the short-term but on a longer time horizon I feel much more comfortable being long gold thanking any form of sovereign. I’m also doubtful that we’ll see a bust à la 2008, or any >25% drawdown in the equity market, let alone corporate defaults. I think people looking for corporate defaults and a collapse in asset prices will be disappointed (yes, even Raoul). I hate to admit it but the central banks control the money supply and seem more than willing to print money to buy assets on the open market, which leaves no doubt in my mind that they can control the downside in nominal price of any asset. No one has the stomach for economic pain and no one is willing to risk another wave of populism that a financial crisis would bring with it. Is it a good thing? Probably not, but it is the world we seem to live in now.
    • NI
      Noah I.
      14 July 2019 @ 23:11
      Than* not thanking. Also wanted to add that this is not in any form an endorsement of the US equity market, or most global equity markets in general. It’s merely an observation that a prolonged depression in asset prices or crippling corporate defaults will not be allowed and there will be no doom loop. Not that anyone here should listen to me. I’m long junior gold miners, Russian equities, Turkish equities (for now), and levered European and Japanese small cap value. My portfolio would give any money manager a stroke.
  • JL
    J L.
    14 July 2019 @ 19:22
    Hi Julian any chance 2s10s don't invert at all this cycle?
  • JQ
    JACK Q.
    14 July 2019 @ 15:48
    Julian, any thoughts on curve here? Say EDH1 vs EDU2 - if disappointment from cuts occur would you be expecting some flattening here and underperformance in the short end of the curve say 2s?