The pain trade is higher. Watch the Chinese reopen Pt. 2
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Dalio and BlackRock are both bullish China.
QQQ (Mega-cap) and Quality Factor (QUAL) continue to lead.
China innovation (KSTR) & Coupang (CPNG) are interesting.
The pain trade is higher. Do not chase this, you are too late.
Watch the rotation from equities into commodities (GSG) next.
Trading one asset class is trading blind.
Don’t play unless the pitch is fat.
The Nasdaq: a breakout and continued out-performance.
April 14th, 2023 Report via Bridgewater Associates. Huge money managers are bullish China.
Bridgewater’s Economy and Market Equilibrium “Checklist”
Binance froze Bitcoin withdrawals twice in the last 24 hours. Something is going on.
The Fed's Impact on the Dollar and Emerging Markets: As the US Federal Reserve takes a relatively less aggressive approach to interest rate hikes compared to emerging market (EM) countries, the "weaponized" dollar is likely to weaken. Investors should be aware of the potential implications for global markets and currency dynamics.
Banking and Confidence: Banking remains a confidence game. In the current environment, any bad news or data can lead to a regional bank's stock price plummeting, followed by deposit withdrawals and potential FDIC shutdowns. Investors should be cautious and strategic when investing in the banking sector.
Lessons from the Past (1970s-80s): Arthur Burns and Stagflation: To better understand the present economic landscape, we must look back at the 1970s and the disintermediation cycle of liquidity: Arthur Burns, who served as the Federal Reserve Chairman from 1970-1978, faced the challenges of stagflation and pursued policies that inadvertently increased inflation. His approach has been criticized for prioritizing short-term growth over long-term stability. Investors should keep these lessons in mind when evaluating the current economic climate.
The Collapse of Insurance Companies in the 1980s: During the early 1980s, life insurance companies faced intense competition with higher interest rates, leading to their collapse. This situation is reminiscent of Paul Volcker's tenure as Fed Chairman and offers valuable insights for today's investors.
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