Outlook for May 2018

One third of 2018 is done and the markets just keep getting more and more interesting by the day. The stock market is rallying hard and billions are added to individual networths (Jeff Bezos) overnight as if the numbers mean nothing. This is the reality that we live in when your cost of capital is zero for a decade. Capital has concentrated to an extremely small segment of the population, who control immense amount of wealth and continues to divide the nation/world more deeply. However, with the yield curve getting close to the 3% mark provides an interesting inflection point as investors watch it closely.

The smarter of the two, bond market, is signaling a coming recession (possibly in 2019), while the equity market keeps shrugging things off. It’s all well and dandy until it isn’t. The central bankers have painted themselves into a corner and will trigger the next economic crisis, as the end of the 30-yr bond bull market nears.

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Outlook for April 2018

Well, Q1 2018 is in the books and the markets are starting to seem pretty interesting day-by-day. The pillars of the market – the FAANG stocks (before the recent decline, the 5 stocks made ~14% of total US market) are starting to see pressure as the public has started revolting against the platforms socially. Most of all, the Facebook debacle was just a matter of when, not if, when the user’s trust would be broken and everyone woke up to realize what they were signing up to. The users have now started questioning the same for other platforms too, with an increased call to regulation – which will be interesting to see follow.

Some interesting developments over the last week in the oil market occurred, with China deciding to price and trade oil directly in CNY instead of US$. This is a massive overt move against the US hegemony, which will be extremely interesting to watch. The days of US$ as the sole world reserve currency are numbered, as China puts on the pressure with its traders to accept CNY. This is never going to be an overnight move of course, but something that will take years and decades to play out.

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Outlook for March 2018

The first tremors are appearing in the stock market, with volatility making a huge comeback. Earlier in Feb, the market saw a correction and volatility jump after being depressed to record levels for years. Of course, shorting vol was something that traders were taking lightly ignoring the risky nature, and has wiped out their working capital overnight.

Turning a more wider view, the new Fed chair has taken command and it appears that he is taking a different approach.  As I mentioned in my Outlook for 2018 post, the US$ will be the most interesting asset to observe in the investing universe. The moves are already pretty apparent as the slide has accelerated since the start of the year. The US budget deficits are getting more media attention, the US government saw a brief shutdown — only to kick the can down the road for a short while, interest rates are rising while the currency is sliding — the US market is now behaving like an emerging market!! These are interesting times, no doubt. I will be keeping a very close eye on the US$ and continue to position myself to protect my purchasing power as the world’s reserve currency continues down the devaluation path.

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Outlook for February 2018

Seems like the year 2018 just started, and we are already in February?! Time sure is aflyin’. Time to look at what the markets are doing and present my outlook for February 2018. Things seem to be getting interesting now. The stock market has continued its climb with some great returns just in the first 30 days. However, the last few days saw some bloodletting that was interesting to note.

As I mentioned in my Outlook for 2018 post, the US$ will be the most interesting asset to observe in the investing universe. The moves are already pretty apparent as the slide has accelerated during the first month of the year. The US budget deficits are getting more media attention, the US government saw a brief shutdown — only to kick the can down the road for a short while, interest rates are rising while the currency is sliding — the US market is behaving like an emerging market!! These are interesting times, no doubt. I will be keeping a very close eye on the US$ and continue to position myself to protect my purchasing power as the world’s reserve currency continues down the devaluation path.

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Outlook for 2018

Happy New Year! 2017 is in the books and its been a great year for investors all over. The US equity markets are flying high as all major indices continue to ring in all-time highs month after month; the multi-decade bond peak seems to be in, as interest rates are now on the upswing — not just in US, but in other countries as well. The commodities markets are starting their bull run as inflation is starting to rear its head after years of potential deflation, disinflation, and stagflation. New tech like blockchains and the cryptocurrency mania is capturing the imagination of the masses and making plenty of investors obscenely rich in a short period of time. But at the same time, every single sector/market has some dark clouds on horizon too — as investors get carried away and assume that risk has been mitigated which may not necessarily be the case.

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