TPW Investment Management

Weekly Musings

Friday Musings

Summer Solstice

Happy Friday!

First, we hope you noted our big news this week - a very exciting partnership with SMArtX Advisory Solutions, a leading fin tech platform (Press Release)

So this is what happens when you get off the rollercoaster, your head reels & you have a bad case of whiplash…

Back in the markets how bout that Sell in May deal… ouch. Our call has been to Sell the US in May and Go Abroad - so far so good with ACWX outperforming the US over past one month.

There is so much to cover but here’s the high points: Central Banks are moving fast to shore up the global economy with the ECB noting that uncertainty itself is a manifestation of risk and it will act if necessary to counter it. Global easing cycle is underway.

Today’s European question is why aren't the banks rallying given the absolute shrinkage in sovereign bond prices, especially in the periphery? Italian 10 yr threatens 2% - a year ago it was pushing  4% amid talk of bank “doom loops” & imploding bank share prices - now we have the opposite but bank’s up move has been limited. Here’s one answer: MS notes 75% of their clients see EU banks as “uninvestable”.

Also in EU watch the top job fight - my preferred combo: Vestager at EC and Weidmann at ECB, looks good.

More broadly the BofA manager survey is always good for a headline - this one really caught my eye - “Most bearish equity since March 2009”… I mean, wow… that just makes no sense to me. Naturally the SPY makes a new all-time highs a few days later.

BTW, how many caught the IMF report noting that it expects a near record low number of countries to be in recession in 2019-2020… near record LOW. Our focus remains the Lower for Longer Global Growth Path & its investment implications (ex US eq, yield plays, non USD, Comm).

So Powell steepens the yield curve, Trump makes the call (to China) and reverses the call (bomb Iran) & economic data starts to be better than expected as folks fall all over themselves to chop, slice, cut and mangle their growth forecasts.

Watch Citi’s Global Economic Surprise Index, mired in a record losing streak - we are due for some green shoot news… just in time to whack the bond bulls who have pushed the AGG 14 day RSI to 80… Gold RSI also over 80.

Osaka can kick (agree to keep talking) and growth green shoots like today’s EU PMIs and we can have a risk on run, especially in non US. ACWX trading at 13x forward EPS, RSI of 60 & off close to 20% from 2018 high vs US trading at 17x forward, RSI of 70 and at ATHs.

Tech is key as we have been noting - Slack IPO makes me wonder about supply - demand but this makes me wonder more: Asia Pacific is home to 53% of Internet users with only 42% penetration; N Am is home to 9% of users with 89% penetration… who’s going to win Splinternet?

Check us out on BTV’s The Open show at 9 am Monday - TPWIM will be kicking off the week with Jon Ferro, talking Fed, oil & of course G-20…

Longest day of the day begets a long Musings!

TGIF!!

Jay and Jamie

TPWIM events 

May

5/15                                     Joint webinar w GlobalX (Replay)

5/20                                     RealVision interview on TPWIM’s Lower for Longer Global Growth Theme (Recording)

5/23                                     Joint Conf Call with Signum Global on EU Parliamentary Elections - Political & Risk Asset Implications (Recording of Call)

5/24                                     Jay was on Bloomberg TV: The Open talking FED (Short Clip)

5/26                                     Jay was on Bloomberg TV: Daybreak Asia talking European Parliament Breakdown (Short Clip)

 

June

6/19                                     Joint Conf Call with Signum Global on US Political Situation and Outlook (Recording of Call)

6/24                                     Jay was on Bloomberg TV: The Open G-20 (Short Clip)

6/27                                     Joint Conference Webinar with HAN ETF - Europe’s Only White Label ETF Provider “Trade & Tariffs in a Tri-Polar World” (Recording)

6/27                                     Jay was on Bloomberg TV: Daybreak Asia talking 2nd Half Outlook (Clip)

James Gardiner