The Contrarian Investor Podcast gives voice to those who challenge a prevailing narrative in global financial markets
David Hunter of Contrarian Macro Advisors rejoins the podcast to update listeners on his vision of a “parabolic melt-up” in risk assets that will presage the next market crash.
What we’ve seen since late March was not the real melt-up, Hunter says. Most of the gains are still ahead, in fact the coming months should see the final (and most dramatic) period of the rally. Then things get ugly.
Leave a CommentNathaniel E. Baker 0:36
David Hunter, Chief macro strategist at contrarian macro advisors. You were on the show last summer in August if memory serves, and you told listeners about your idea that there would be a dramatic melt up that would be caused by central bank liquidity, injections and other measures. And anybody who’s been paying attention to markets in the last couple of weeks, could reasonably point out that this is exactly what’s happened here with the Fed, and other central banks, mainly the Fed, stepping in to combat the coronavirus impact, and unleashing all kinds of liquidity. So, I guess that would be the first question for you is where we stand with this. And if this is indeed the start of this melt up?
David Hunter 1:37
Sure. Yeah, I think this is definitely the start of what I think will eventually become a parabolic melt up into a secular top. And in all honesty, when we talked last, I guess, late August, I didn’t anticipate the coronavirus by any means and didn’t anticipate that we’d get down under 2200 on the S&P, I thought we might in fact in January, February, March. I was talking about January, February, early March, I was talking about a correction back to 3000, maybe 2900. But I certainly didn’t see the the cascade that we we got. So, you know, the coronavirus certainly affected the path. But my target of 4000 plus on the S&P, which I had last summer is still my target today. We had another leg down. It took us down to a deeper bottom. But I think it didn’t change the fact that we are going to have this final melt up into a secular top, a top that I expect to be the high watermark for decades to come.
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Leave a CommentDavid Hunter, chief macro strategist at Contrarian Macro Advisors, has for some time predicted a final “melt up” stage of the market cycle before markets crash.
This stage is now underway as markets recover from an initial sell-off caused by the coronavirus (which Hunter admits he did not and could not have predicted).
What comes next is a “secular top that I expect to be the high-water mark for decades to come,” he says. After markets peak around late summer, a “global deflationary bust” will ensue, with as much as 80% downside for equities.
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