Heading into the holiday season, there is plenty to unwrap but not all of it feels festive. Inflation is still lingering like that one guest who does not know when to leave, geopolitics remains a chaotic rollercoaster, and a partner of mine is declaring stagflation to be the Grinch stealing our economic cheer.
Markets are not exactly singing “Silent Night,” either. US stocks are trading at or near record valuations, depending on which metric you favor. Credit spreads have tightened to pre-financial-crisis levels. Cryptos, meanwhile, are partying like it is New Year’s Eve.
Globally, the US is being hailed as the “cleanest shirt in the laundry basket” but across the Pacific, China’s government stimulus and favorable export conditions have opened up a short-term growth window. For a macro guy like me sitting on some cash, it is a bit like spotting a good Black Friday deal that is hard to ignore.
I’m watching technology, small caps and energy at the moment. Select commodities and specific fixed-income trades are also on my radar. Do not forget gold which shines even brighter in stagflationary times. It is like the holiday ornament you always count on to dazzle. On cryptos, I’m not chasing crap or meme coins.
As for politics, I have officially unwrapped a new policy of my own. I do not write about it anymore. Not because I lack opinions but because I would rather save those debates for gatherings where there are good vegetarian meals and forgiving friends.
Right now, I’m finalizing a report for some investors and partners, set to hit inboxes in a couple of hours. It is packed with some insights and performance charts and probably just enough to keep everyone from fully relaxing over the holidays.
