Category: Market Outlook

Lately, there has been a lot of speculation on who the next US Federal Reserve chairperson will be. Many articles have been written speculating, opining, polling, and inferring the likely outcome as well as likely policy implications; we will not waste our time theorizing the same. Instead, we will focus on the technical aspects of the US treasury futures market and the underlying dynamics of US wage and inflation data.

Our view is that we could be due for an inflation surprise. Interest rate sensitive assets could be vulnerable, the slope of the US yield curve could steepen quite dramatically, and the reflation trade could be back with a vengeance.

Please click here to view the presentation.

• Low levels of VIX get all the attention; the often attributed reason is complacency, the often prescribed medicine is caution.
• Equity risk premium relative to Aaa rated bonds and Baa rated bonds do not scream over valuation.
• We have put together a presentation in which we present 21 charts that should make any one predicting doom and gloom on the US equity markets reconsider their stance.
• We too are guilty of having given up on this market way too prematurely but the breadth of the market, which got us bearish in the first place, is now showing signs of underlying strength and it behooves us to recognize it.

Please click here to view the presentation.