This morning I’m on Bloomberg TV, from 11:00am to noon, on the show Open Exchange. We will be discussing the Markets, the slowing economy, various sectors, and whatever else comes up.
Some bullet points I hope to hit:
• Since the summer, the Markets have improved technically, although we are starting to see signs the internals weakening, and sentiment is getting increasingly “buoyant.”
As the technicals have improved, the economic backdrop has decelerated further. We have a “slow-motion slow-down.” The yield curve is now at levels last seen in Spring of 2000. The yield curve inversion is now over 6 months old, and has become much deeper than it was (when previously dismissed).
• Investment strategy: We do top down macro work to determine the long term risks, and bottoms up quant/fundie/technical research to select stocks.
We always try to measure risk versus reward. When conditions are good, we get more aggressive (as we did over the summer), and we try to reduce exposure when conditions are less favorable (such as now).
• What stands out in the markets right now?
1) Long and deeply Inverted Yield curve
2) the high levels of risk taking
3) lots of complacency out there lately.
• A tale of two markets: The Stock market is telling us everything is hunky dory, while the bond market is discounting a major slow down. This is one of those very odd junctures, where strange things can – and will – occur
Should be fun. . .