I recently met with a number of fund partners across different meetings, who together bring a collective 200 years of market experience and let me just say the bulls were out in full force. Despite the bullish enthusiasm, there was also a healthy dose of skepticism.
Risk assets including cryptos were getting plenty of love. At the risk of sounding like a broken track record, the US election was a game-changer for crypto investing in so many ways. The long-term case for crypto remains strong but getting into that rabbit hole is a discussion for another day.
Buy what again? There was a lively debate about the resurgence of European and Chinese stocks. A partner argued that it does not take much for flows to make an impact which is why even a modest shift in investor appetite can feel like a tidal wave across the pond.
Unsurprisingly, gold was a crowd favorite. So far this year, gold has been one of the best-performing assets, up more than 10%. This rally is not just about shiny rocks looking good on paper, it is a reflection of gold’s role as a hedge against rising geopolitical tensions and market volatility. No one here is chasing it like a meme stock in 2021.
Phew! Did someone just say the Bank of England still holds plenty of gold? This comes amid swirling conspiracy theories about missing bullion, further fuelled by Elon Musk’s hints at auditing America’s Fort Knox. The debate over global gold reserves just got even more intriguing!
No investor discussion is complete without a debate on the US economy and this one was no exception. Almost no one sees a recession over the next 12 months. One brave contrarian is betting on a hard landing, arguing that the Fed will eventually have no choice but to start slashing rates aggresively.
It always comes back to the greenback. Looking at a number of charts, we also examined the US dollar’s price trends, with some partners raising concerns about its momentum in the coming months. Still, they see it remaining the world’s strongest currency beyond the short-term.
US inflation remains the ultimate wildcard. The January CPI print showed the strongest monthly increase since August 2023, reigniting fears of renewed price pressures. The effects of tariffs on inflation remain as clear as a foggy morning.
On one hand, tariffs could push up consumer prices. On the other, they could ignite fresh trade tensions between the US and other major economies. Either way, it is another curveball for policymakers and markets alike.
Yeah, rising valuations and macroeconomic uncertainties are real concerns. However, one partner argued that today’s market differs from past peaks, leaving room for continued growth especially if earnings continue to deliver as expected.