Summary: Our fourth Dragon Interview takes us back to checking in with AVM's Global Macro CIO Ashvin Murthy - Ash walks us through his latest top of mind thoughts, including positioning in the shifting market regime, inflation, real yields, no YCC, the Fed & the potential US dominance theme - which judging by where the DXY & gold closed on Fri Mar 26, at 92.766 & 1732.52 is still largely mispriced by the market.
A US dominance theme should see much strong US Dollar (DXY easily back above 94 to 96 lvls), gold getting hosed potentially back to $1580/$1530 lvls -9% to -12%, as well as US equities outperforming Emerging Markets & Euro-Zone equities, plus higher US bond yields & overall higher real rates. In addition to US economic data, the Fed meetings of Apr 28 & especially Jun 16 are going to be pivotal..
Join the Dragon Interviews series, as Global Macro Consigliere KVP, interviews some of the best of breed players in the craft of steadily compounding wealth - be that across liquid or illiquid assets, global macro investing, venture capital, crypto, equities, commodities, currencies, bonds, private equity, property, etc.
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We originally published this interview on Wed 17 Mar 21, before the Fed meeting that later saw them upgrade their US GDP expectations to +6% - a figure that Ashvin feels could be passed.
Those looking for faster playability options & one landing page for all the interviews can check-out our Dragon Interviews Channel here.
We will have a crypto focused interview that should be published in early Apr.
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Post our foundation piece with Global Macro Hedge Fund AVM's Ashvin Murthy in Oct of 2020, we catch up with Ash to get his latest thoughts as we head into a likely series of very key Fed meetings in regards to them being neutral, vs potentially hiking, vs the YCC route.
We touch on a number of things, including:
Links: AVM Global Opportunity Fund — https://avmglobal.fund/
Watch our debut Dragon Interviews piece here — http://bit.ly/ditvashvin
As always we hope you enjoy the interview as much as we did putting it together, please feel free to share.
Namaste,
-KVP
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.