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Fed Will Reverse Course on Rate Hikes, And Soon: Deer Point Macro (Szn 4, Ep 17)

Published June 23, 2022

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Deer Point Macro joins the podcast to discuss his view that the U.S. Federal Reserve will only hike interest rates once more before easing.

Content Highlights

  • The Fed is not some magical organization that can control all parts of monetary economics (2:50);
  • The Fed can create demand for credit, but banks have to provide supply. And banks are pushing back (5:03);
  • What to make of the Fed’s rate hikes this year? How has that affected bank portfolios? (9:37);
  • The eurodollar market plays a significant role in Fed policy and its implications. An explanation (13:24);
  • The Fed stands to raise once more, at its next meeting in July, before having to cut rates in September (16:21);
  • Inflation is stubbornly persistent. Doesn’t this force the Fed to raise rates? (19:57);
  • Background on the guest (30:14);
  • Markets don’t really react to ADP employment data, but for economic detective work it can be vitally important (31:48);
  • How this all translates to asset prices: good for bonds but commercial banks are maybe not as safe as some would think. But regional banks may be a better bet (35:11);
  • What about cryptocurrencies? (36:34);
  • Quick discourse on the so-called ‘Fisher effect’ that posits that inflation rises as Fed funds increase — over the long term (39:14).
MoreFed Will Reverse Course on Rate Hikes, And Soon: Deer Point Macro (Szn 4, Ep 17)
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This Correction Is Not A Buy Signal: Mike Singleton, Invictus Research (Szn 4, Ep 13)

Published May 2, 2022

Mike Singleton of Invictus Research joins the podcast to discuss why the current sell-off is not a buying opportunity for stocks.

Content Highlights

  • Many contrarians currently believe sentiment is too bearish, meaning the market is due for a run for strong performance. Their conclusion is likely wrong (3:28);
  • Regardless of what investors say in surveys, the key question is whether they have money on the line — and how much (5:50);
  • Right now retail exposure to stocks is at all-time-highs, while institutional investors have cash at low levels (7:27);
  • What about the economic fundamentals, which are mostly in good shape? (10:09);
  • The Fed actually has credibility when it comes to tightening interest rates — and is not just ‘jawboning’ the market (12:58);
  • This is partly because the Fed does a lot more communicating than it has in the past (16:40);
  • Inflation has likely peaked and will start to slow, though not by enough to let the Fed ease rates (24:02);
  • Background on the guest and ‘origin story’ for Invictus Research (26:54);
  • What part of the business cycle are we in now? (33:23);
  • What does that mean for asset classes? (35:34);
  • ARK Innovation ETF (ARKK) “has been a terrific place to look for shorts — quick discussion of Cathie Wood and her predicament” (38:03);
  • Bonds will become an opportunity when the Fed ‘breaks something’ and there are indications that may be happening now (40:40);

More Information on the Guest:

Quick Highlights from our YouTube Channel

MoreThis Correction Is Not A Buy Signal: Mike Singleton, Invictus Research (Szn 4, Ep 13)
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No Recession Imminent, Watch for New Highs in (Certain) Stocks: Edward Olanow (Szn 4, Ep. 12)

Published April 25, 2022

Edward Olanow, portfolio manager and director of investment solutions at Weiss Multi-Strategy Advisers, joins the podcast to supply a surprisingly bullish outlook on the economy and on certain segments of the stock market.

Content Highlights

  • Reasons for optimism: Given the Fed and external shocks, GDP remains high and there is still a backlog of orders and millions of unfilled jobs (3:15);
  • The Fed’s talk about 0.75% interest rate hikes is “just jawboning” (5:33);
  • The era of ‘buy & hold’ is over; investors need to be more nimble (8:25);
  • The house view at Weiss is that Nasdaq stocks will have a tougher time than other segments of the market (10:40);
  • The war in Ukraine: in all likelihood risks are localized at present, judging by gold and energy prices (14:25);
  • Background on the guest (18:40);
  • What are dispersion trades and how do they work? (20:34);
  • Why this may be a good time for this strategy — and a ‘turning point’ for alternatives managers in general (26:27);
  • Where all this leaves fixed income and the bond market: Fixed-income is less forward-looking than people think… (29:55);
  • What Olanow and Weiss monitor for inflation (32:31);

For More Information:

Video Highlights

MoreNo Recession Imminent, Watch for New Highs in (Certain) Stocks: Edward Olanow (Szn 4, Ep. 12)
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