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.

The most important chart.

China continues to reopen and outperform

Look for strength in the dollar along with gold.

Raytheon has been our silent winner since October.

Housing has topped.

+30% of the Russell 2000 has negative net income. If rates hit 5%, look out below.

Apple rolling over.

Applies to market “participants” too.

Return always wants its risk payment. NOT INVESTMENT ADVICE.