S&P 500: There’s Still Something Ridiculously Wrong

Published on
June 12th, 2019
13 minutes

S&P 500: There’s Still Something Ridiculously Wrong

Trade Ideas ·
Featuring Michael Gayed

Published on: June 12th, 2019 • Duration: 13 minutes

Michael Gayed, portfolio manager at Pension Partners and author of the Lead-Lag Report, revisits his "Spring Crash" thesis for the stock market, and discusses how a dovish Fed could impact the situation. He notes the flashing signals from the bond market and small caps, discusses the binary outcome of a crash or melt up, and considers how to play the reflation trade through emerging markets, in this interview with Jake Merl. Filmed on June 11, 2019.



  • JK
    Jay K.
    16 September 2019 @ 02:24
    Lumber isn't a good indicator for a S&P crash.
  • MG
    Michael G. | Contributor
    12 June 2019 @ 10:38
    This is Michael Gayed. Quick note - I misspoke regarding Greenspan in 1999. What the Fed did was increase M3 money supply, liquifying at the tail end of 1999. Point remains the same. https://nypost.com/2000/01/07/how-the-y2k-bug-bit-greenspan-wall-st/
    • BC
      Brent C.
      12 June 2019 @ 17:40
      Michael, I've followed your work for quite some time. Appreciate your analysis. However, this is not at all like 98/99 for numerous reasons. ECRI had a report at the Minsky conference titled Probing Powell's Patience. In it Lakshman discussed the difference in the fed cuts ending in soft landings vs recessions. He made a point to reference the soft landings occurred when rates were cut coinciding w/ their USFIG downturn. In 98/99, USFIG was rising steadily and it did not turn down until q3ish of 2000. In this cycle, that occurred last september. Gavekal had this piece out yesterday discussing other key differences. https://blog.knowledgeleaderscapital.com/?p=16492 There are many other key differences as well. In actuality, 2016's pause, was much more equivalent to the cuts you reference juicing the blowoff. Again, I appreciate your analysis.. Not trolling. Just my 2 cents...
    • DR
      David R.
      13 June 2019 @ 10:29
      Brent, your link appears to be for a Bryce Coward, who isn't at Gavekal. Might've been a cut & paste error.
    • BC
      Brent C.
      13 June 2019 @ 13:48
      apologies, David. Knowledge Leaders Capital was formerly a gavekal blog. a division of, I'm assuming. the name change references the management strategy they founded... .
  • JS
    Jerad S.
    13 June 2019 @ 07:24
    Top notch RV. Appreciate top talent. Appreciate bringing a person back to defend and expand their thesis. Lastly, Mr. Gayed does an excellent job explaining his thinking. Please get a copy of some of his recent reports put in the ThinkTank.
  • DS
    David S.
    12 June 2019 @ 17:15
    Interesting comment about the Fed knowing how the algos will react to their statements. This also applies to tweets. It happened before algos and tweets but on a slower, human timeframe. DLS
  • JP
    Janusz P.
    12 June 2019 @ 13:21
    Nice presentation by Micheal as always. Also, glad to see Jake getting better and more sophisticated at interviewing. Great leap forward from the first trade idea he made. If I can make a (constructive) side comment though: ditch black suits, these are good for weddings, funerals, ceremonies etc. Given your build dark blue/navy colored ones should work best for you. Also try to get into slim fit suits (if super slim is not something that you could pull of). And finally, keep in mind that a black shoe goes with anything while a brown one goes with anything but the black. Sorry to go off-topic but since you are in front of the camera, these things should matter to you. Good luck!
    • DS
      David S.
      12 June 2019 @ 17:08
      I believe constructive comments can be sent to RVTV staff through subscriber questions. On the Home Page and similar selections there is a large white question mark at the bottom of the page for anyone who does not know. DLS
  • JM
    John M.
    12 June 2019 @ 15:57
    I wonder what probabilities he would assign to this binary outcome, over the next few months? Great presentation Michael.
  • BJ
    Brian J.
    12 June 2019 @ 08:48
    Lumber turning as we speak.