Russia Bond Default, Crypto Fund Blow-Up No Concern to Markets (Yet)

Published June 27, 2022

The following is an amended form of the Daily Contrarian briefing from June 27. This briefing and accompanying podcast are released to premium subscribers each market day morning by 0700. To subscribe, visit our Substack.

Over the weekend we received a couple of troublesome headlines about a Russian bond default and potentially the blow-up of a crypto hedge fund.

Markets appear to have shrugged this off, moving higher in the pre-market. While this bounce faded at the open, major indexes are only down a few basis points at the time of this writing (0940 EDT on Monday). Cryptos are down a bit, with bitcoin dropping by about 2% to dip below $21,000.

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:

LinkedIn;
Twitter: @WeissMultiStrat.

Video Highlights

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The Coming Credit Crunch and Death of Unicorns: Leo Schmidt (Szn 4, Ep 11)

Published April 18, 2022

Leo Schmidt of River Eddy Capital Management rejoins the podcast to discuss the coming credit crunch, its impact on stock market sectors, and where to invest to protect one’s portfolio.

Content Highlights

So-called “unicorn” companies, or the darlings of the VC crowd, and others that cannot generate cashflow, will face a tough reckoning (3:17);
Undermining this is “a complete change of psychology” in terms of velocity of money (6:27);
What if the Fed reverses course? It’s not so simple (8:52);
Oil is a short: “Oil is the ultimate liquid commodity” but there is a place for pipeline stocks… (11:38);
What stocks can thrive in this type of environment? Look first to medical company spin-offs (19:13);
Another area to look: Business development companies, or BDCs. This is a risky part of the market but there is at least one BDC making first-lien loans, which are the safest part of the capital structure… (26:23);
Quick epilogue on China’s latest Covid lockdown. There are ways to play the move away from supply chain issues that result (35:58);