Dusted off a David Bowie anecdote from 2023 about great artists (see below). How they help us imagine our many possible futures, and we then collectively conjure one from the nothingness. So many possible new worlds are taking shape; AI, crypto, domestic politics, geopolitics. A thrilling time to be alive, invest. I take July/Aug off from writing, to do more reading, recharge. Hoping the same for you. Back again in September. All the very best, E

Week-in-Review: Mon: Biden drops out of Presidential race / endorses VP Kamala Harris to be the candidate, PBOC cuts rates 10bps unexpectedly, UK teacher and healthcare workers unions recommend 5.5% pay increases (3% exp), Secret Service director takes responsibility for failures during Trump assassination attempt, top Dems – Schumer / Jefferies / Pelosi – endorse Harris, S&P +1.1%; Tue: secret service director Cheatle resigns, CBRT unch as exp, Hungary CB cuts 25bp as exp, Kamala Harris has enough pledged delegates for the Democratic nomination, TSLA misses / extends robotaxi delivery projection, GOOG beats but market punishes it for higher than exp CapEx, EU cons conf -13 (-13.5e), US existing home sales 3.89m (3.98m exp), S&P -0.2%; Wed: Canada Rate decision 4.5% as exp, DB stock dropped after the lender posted its first quarterly loss in four years because of a legal provision and said it probably won’t buy back shares this year, Treasury yields fell before an auction of $70 billion in 5-year notes / the dollar and oil rose, Trump files a legal complaint against the transfer of Biden’s $96 million campaign war chest to Harris, CrowdStrike blamed a bug in a safety mechanism for allowing flawed data to go out to customers in a botched update which caused last week’s meltdown, S. Africa CPI 5.1% as exp / Core 4.5% (4.6%e), EU PMI mfg 45.6 (46.1e) / serv 50.1 (50.9e) / comp 50.1 (50.9e), UK PMI mfg 51.8 (51.0e) / serv 52.4 (52.5e) / comp 52.7 (52.6e), US PMI mfg 49.5 (51.6e) / serv 56.0 (54.9e) / comp 55.0 (54.2e), US New home sales 617k (640k e), S. Korea GDP 2.3% (2.5%e), S&P -2.3%; Thu: PBOC unexpectedly lowers the 1y LPR 20bps, Netanyahu addresses both houses of congress, Six swing-district House Democrats joined the Republicans in voting to condemn Kamala Harris over her failure to secure the US-Mexico border, EU M3 2.2% (1.9%e), US 2Q GDP QoQ 2.8% (2.0%e), US Initial jobless claims 235k (238k e), US Durable goods orders -6.6% (0.3%e), S&P -0.5%; Fri: US PCE 2.5% as exp / Core 2.6% (2.5%e), Russia Key rate 18% as exp, the Obamas endorse Harris, Russia plans to cut an extra 15 million barrels of crude output to compensate for pumping above its OPEC+ quota, US Personal income 0.2% (0.4%e) / spending 0.3% as exp, US Mich sent 66.4 (66.5e), UofMich sentiment 66.4 (66.5e) / 1y infl exp 2.9% as exp / 5-10y infl exp 3% (2.9%e), S&P +1.1%; Sat: Hezbollah attack on Golan Heights kills 11, Trump vows to fire Gensler on day one and build strategic bitcoin reserve.

Weekly Close: S&P 500 -0.8% and VIX -0.13 at +16.39. Nikkei -6.0%, Shanghai -3.1%, Euro Stoxx +0.5%, Bovespa -0.1%, MSCI World -0.8%, and MSCI Emerging -1.6%. USD rose +6.7% vs Ethereum, +2.3% vs Mexico, +2.1% vs Australia, +1.3% vs Sweden, +1.0% vs Brazil, +0.8% vs Canada, +0.6% vs Indonesia, +0.6% vs Chile, +0.4% vs Sterling, +0.2% vs Euro, +0.1% vs India, and +0.1% vs South Africa. USD fell -2.8% vs Bitcoin, -2.4% vs Yen, -2.1% vs Russia, -0.3% vs China, and -0.3% vs Turkey. Gold -0.8%, Silver -4.4%, Oil -1.9%, Copper -2.7%, Iron Ore -2.9%, Corn +1.3%. 10yr Inflation Breakevens (EU -9bps at 1.90%, US -4bps at 2.25%, JP +1bps at 1.51%, and UK -6bps at 3.53%). 2yr Notes -13bps at 4.38% and 10yr Notes -4bps at 4.20%.

2024 Year-to-Date Equity Index Close: Venezuela +51.3% priced in US dollars (+54.3% priced in bolivar), Argentina +44.4% priced in US dollars (+65.9% riced in pesos), Turkey +30.7% priced in dollars (+45.8% in lira), Hungary +16% in dollars (+20.7% in forint), NASDAQ +15.6% in dollars, Taiwan +14.9% (+23.4%), S&P 500 +14.5% in dollars, Denmark +14.1% (+16.3%), India +13.6% (+14.3%), Netherlands +13.2% (+15.2%), Greece +11.6% (+13.6%), Russell +11.5% in dollars, MSCI World +11.2% in dollars, Italy +9.4% (+11.4%), Malaysia +9.3% (+10.9%), Spain +8.5% (+10.5%), Belgium +8.3% (+10.3%), Czech Republic +8.1% (+13%), UK +8.1% (+7.1%), Colombia +8% (+12.6%), Germany +8% (+9.9%), Ireland +7% (+8.9%), Israel +6.8% (+8.8%), Poland +6.5% (+6.7%), Euro Stoxx 50 +5.6% (+7.5%), Austria +5% (+6.9%), South Africa +4.9% (+5%), Switzerland +4.4% (+9.9%), Canada +4% (+8.9%), Singapore +3.9% (+5.7%), Norway +3.5% (+12.5%), Japan +3.1% (+12.6%), Saudi Arabia +0.4% (+0.5%), Australia +0.2% (+4.4%), Sweden 0% (+7.6%), HK -0.1% (-0.2%), Philippines -1.2% (+4.3%), France -2.1% (-0.3%), New Zealand -2.4% (+4.9%), UAE -2.7% (-2.7%), Chile -3.9% (+3.8%), Korea -4.2% (+2.9%), Finland -4.2% (-2.5%), China -4.8% (-2.8%), Indonesia -5.2% (+0.2%), Portugal -5.4% (-3.7%), Thailand -12.1% (-7.7%), Mexico -15.4% (-8%), Brazil -18.4% (-5%).

Anecdote (June 2023): “The internet now carries the flag of being subversive, possibly rebellious, chaotic, nihilistic,” said David Bowie in a 1999 BBC interview [here]. “I embrace the idea that there is a new demystification process going on between artist and audience,” continued the visionary, peering over the horizon, glimpsing a world of peer-to-peer connection, synergy, exchange. “Up until the mid-1970s, we were still living in the guise of a single and absolute created society, where there were known truths and known lies. And there was no duplicity or pluralism about the things we believed in.” The BBC interviewer remained skeptical throughout, often smug. “That started to break down rapidly in the 1970s. And the idea of a duality in the way that we live – there are always two, three, four, five sides to every question. The singularity disappeared,” explained Ziggy Stardust, iconoclast, genius. “And I think that has produced a medium such as the internet, which absolutely establishes and shows us that we are living in total fragmentation.” The interviewer clung to his small mindedness, a harmless man. Helpful in fact, because such people remind us of the profound dangers we face when allowing such characters to ascend to positions of power, governing our activities, telling us what we can and cannot build, explore, limiting human potential. “I don’t think we’ve even seen the tip of the iceberg. I think the potential of what the internet is going to do to society, both good and bad, is unimaginable. I think we’re on the cusp of something invigorating and terrifying,” said Bowie. “It is an alien life form. Is there life on Mars? Yes, it’s just landed here,” explained the Space Oddity. “The context and state of content is going to be so different to anything we can really envisage at the moment. Where the interplay between user and provider will be so sympatico that it will crash our ideas of what mediums are all about.” Great artists help us imagine our many possible futures, and we then collectively conjure one from the nothingness. “It is happening in every form. The idea that the piece of work is not finished until the audience come to it and add their own interpretation, and what the piece of art is about is the grey space in the middle,” explained Bowie. “That grey space in the middle is what the 21st century is going to be about.”

Good luck out there,

Eric Peters

Chief Investment Officer

One River Asset Management

Disclaimer: All characters and events contained herein are entirely fictional. Even those things that appear based on real people and actual events are products of the author’s imagination. Any similarity is merely coincidental. The numbers are unreliable. The statistics too. Consequently, this message does not contain any investment recommendation, advice, or solicitation of any sort for any product, fund or service. The views expressed are strictly those of the author, even if often times they are not actually views held by the author, or directly contradict those views genuinely held by the author. And the views may certainly differ from those of any firm or person that the author may advise, converse with, or otherwise be associated with. Lastly, any inappropriate language, innuendo or dark humor contained herein is not specifically intended to offend the reader. And besides, nothing could possibly be more offensive than the real-life actions of the inept policy makers, corrupt elected leaders and short, paranoid dictators who infest our little planet. Yet we suffer their indignities every day. Oh yeah, past performance is not indicative of future returns.