Swimming with the Whales, Running with the Bulls – Live with Vincent Deluard

Published on
October 27th, 2020
Duration
65 minutes

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Swimming with the Whales, Running with the Bulls – Live with Vincent Deluard

Live ·
Featuring Vincent Deluard

Published on: October 27th, 2020 • Duration: 65 minutes

Editor Max Wiethe joins Vincent Deluard, CFA, of StoneX to explore the driving forces behind this year’s market corrections as well as how secular stagnation is good for the stock markets despite the detriment it causes the economy at large. With macro variables such as an uncertain U.S. election outcome and the stimulus negotiations in flux, Deluard guides viewers deeper into the weeds by explaining how passive flows — specifically, target date funds — could be one of the culprits behind this year’s extreme market gains and losses. As a result, Deluard projects how the culmination of liquidity and macro risks may cause further turmoil through November with the possibility of the "whales" to re-emerge at the end of the fourth quarter. In the long-term, Deluard also discusses why secular stagnation spells good news for U.S. stocks, how a functioning economy tempers a raging bull market, and whether the Fed will eventually be forced to adopt yield curve control.

Comments

Transcript

  • DM
    Don M.
    11 November 2020 @ 17:53
    GET OFF MY LAWN!
  • ds
    durgesh s.
    3 November 2020 @ 06:07
    Excellent young guy well articulated
  • JK
    JOHN K.
    30 October 2020 @ 04:23
    Great content thankyou. May I suggest an option for sub-titles and speed reduction to 0.75X, my Australian ears missed a lot of this one.
    • MW
      Max W. | Real Vision
      30 October 2020 @ 16:40
      We do have subtitles. It takes time after the fact to get videos transcribed for subtitles. It should be up soon. 0.75X is another story. I'll look into it.
    • VD
      Vincent D. | Contributor
      1 November 2020 @ 05:02
      Yes I speak too fast, even in French! Thanks for the kind feedback
  • DG
    David G.
    31 October 2020 @ 17:33
    Dope!
  • DS
    David S.
    31 October 2020 @ 16:55
    Great job by both Mr. Deluard and Mr. Wiethe. The outlook of old vs young is real and always ongoing. A major reason for this is experience of all the things that can go wrong coupled with risk aversion in the old. The information age accelerated these differences. Older investors look at the economy driving the market, whereas younger investors look at the market driving itself. At the zero bound who knows what will matter. A K shape recovery will not last. It will end in revolution of some type, not necessarily gunfire. (We have already riots from the far left and far right in the US.) We shall see what happens. DLS
  • JW
    J W.
    31 October 2020 @ 16:38
    Excellent interview, very interesting topics.
  • DN
    D N.
    31 October 2020 @ 02:12
    Really excellent
  • MA
    Michael A.
    29 October 2020 @ 13:00
    Please provide a transcript. Thank you
    • MW
      Max W. | Real Vision
      30 October 2020 @ 19:58
      Transcript is up
  • DD
    Dmitry D.
    29 October 2020 @ 06:57
    Great interview! Always looking forward to Vincent's interviews. Also great to see Mike Green's passive thesis propagating and being added to by other thinkers. Corey Hoffstein's Liquidity Cascades paper adds color to it too (it is extraordinary and highly recommended). He would be a great guest to have on RV to talk about it
    • MW
      Max W. | Real Vision
      30 October 2020 @ 15:06
      Just wait until Monday's piece with Dan McMurtrie and Mike Green. They discuss how Dan has taken this dynamic and put it to work in his portfolio.
  • JA
    John A.
    30 October 2020 @ 03:59
    Brillant guy, but I disagree with China wanting a strong CNY. They still are an exporting country, and they lack natural resources. They need foreign investment right now because they need dollars - and they are bringing in less of them right now. A lot of their data is suspect. Also, anyone investing in China is also going to have a hell of a time realizing profits and getting it back out. Listen to Mike Greene on this one too Vincent.
    • AI
      Andras I.
      30 October 2020 @ 09:01
      Dollar dependence: Just an example: China for a couple of years paid more for Russian (not their biggest parner, still...) exports in Euros than dollars - they were on the push for reducing their dollar dependence for quite a while (first through pushing for SDR and now with the just introduced CBDC) - it's only a matter of time, their newly "colonised"(along the Belt&Road or Africa) areas have plenty of natural resources (and increased connectivity). Strong yuan: There was a recent article by Jeff Snider covering this that's worth a read (https://alhambrapartners.com/2020/10/28/three-from-xi-bonus-4th-for-cny). Jeff argues that as China is (lacking other choices) turning more towards growth in their domestic (and quality over quantity planned) market (dual circulation) and as Xi's status gets stronger and stronger (first with the lifetime mandate then now again with the talks about the Chairman position), they will only focus on creating enough money (which they have perfect control over lacking the eurodollar style market) to keep the Chinese (real!) economy afloat, which results in a sustained currency shortage. As evidence, you can look at this year's monetary/fiscal reaction - or rather no reaction. (+ what Vincent said about real rates...etc) There are so many aspects of investing in China, just couple of smaller points: For investing: I (and more importantly Michael Pettis) would argue that capital controls are less severe and pretty clear cut for foreigners - in fact there is a recent tendency for the government to make foreign investments easier (either capital flow or visas...etc). Of course, it's a real danger, especially for less liquid investments. (for now?) You can tap into some of these opportunities in the US stock markets. Need to keep in mind that the US listings do NOT hold the actual company equities, just some shell in the Caymans or somewhere similar to "work around" legal issues (with the government supportively looking the other way). A lot of effort has been made on toning down the bubbliness of the Mainland markets too, so that's another - although obviously more difficult opportunity.
  • VB
    Vikram B.
    29 October 2020 @ 09:53
    Where is the report/presentation/slides?
    • MW
      Max W. | Real Vision
      29 October 2020 @ 12:58
      https://www.realvision.com/issues/passive-whales-and-the-math-of-secular-slowdown?source_collection=9281de53a77f4bf7b6bfcd74eeaee864
    • VB
      Vikram B.
      30 October 2020 @ 03:46
      Much appreciated Max!
  • SE
    Sylvain E.
    29 October 2020 @ 23:51
    Brilliant interview & useful insights - thanks Max
  • MO
    Master O.
    29 October 2020 @ 10:54
    Fascinating dynamics regarding the impact of Vanguard on the bond and stock markets. I'm going to allocate a small portion of my portfolio towards the end of the quarter to test the hypothesis. I wonder of the regulators and the FED know about the dynamics of the ETFs on the markets.
  • AI
    Andras I.
    29 October 2020 @ 04:05
    Great views and very efficiently written report!
  • lf
    liam f.
    29 October 2020 @ 03:34
    this guy is wicked smawt
  • CX
    Cindy X.
    29 October 2020 @ 01:01
    Wow! What a great analysis. Jeff snider has another theory about the quarterly volatility, the eurodollar contracts end dates. What is your view on that? Again very impressive work.
  • OA
    Olivier A.
    29 October 2020 @ 00:59
    Great, great talk. Both the "under-the-hood" analysis on flows and the macro discussion were very thought-provoking.