China, Sugar, and Volatility: Navigating the Investment Landscape
Quick and simple:
The Fed will position the narrative for more rate hikes. The moment they let up, the market will rally 2 hikes in 2 days, negating months of work. The market narrative WILL TRANSITION from “inflation worries” to “growth concerns”.
Watch to watch:
China Outperformance
Volatility (hedging) is cheap.
Strength in US Dollar, Sugar-cane & Commodities
Industrials (LMT, CAT)
Platinum, Gold, Sugar (CANE), GSG, HYG
Energy vs Tech
USDJPY is collapsing after BOJ warned of a policy error and YCC expansion.
US LEI (leading economic indicators) need to bottom before the market can.
The Sharpe ratio is lowest when real GDP growth is <2% and inflation is >4%. It is about to get rough out there, important to note.
