wknd
notes


                                                                                                                                                                                                                                                                                                                                                                                                                                                                          wknd notes: Throwing The Bones

wknd notes: Disruption, Destruction, Adaptation, Outperformance

wknd notes: Disruption, Destruction, Adaptation, Outperformance
September 03, 2023
Read more

wknd notes: Tectonic Shifts

wknd notes: Tectonic Shifts
August 27, 2023
Read more

wknd notes: Quantum Mechanics, Mysterious Phenomena, Markets

wknd notes: Quantum Mechanics, Mysterious Phenomena, Markets
August 13, 2023
Read more

wknd notes: Turning Potential Tragedy Into Opportunity

wknd notes: Turning Potential Tragedy Into Opportunity
August 06, 2023
Read more

wknd
notes

Each Sunday morning for over a decade, One River’s CIO, Eric Peters, has published “Wknd Notes.” It is an unorthodox take on markets, politics, and policy that’s widely read across our industry and within global policy/political circles. Eric has written for as long as he has traded and the discipline is part of his investment process. Drawing on wide-ranging, multi-disciplinary research, historical study, and discussions with interesting characters throughout the world, Eric collects those things he finds most thought-provoking each week and distills them into a concise letter. At times the ideas and views are consistent with his own, but just as often, they challenge his positions and it is this openness to opposing views that helps him maintain a flexible mind in the search for emerging opportunities and risks. His writing is a reflection of how he thinks, and as such it is as focused on identifying the right questions to ask as it is on seeking answers. The publication of this work is Eric’s way of exchanging ideas/information and developing dialogue with a network grown over his thirty-one-year career.

wknd notes: Throwing The Bones

Dusted off an anecdote from June 2018 about journeys, and sharing our fears, failures, joys, discoveries (see below). I take the late summer off from writing, to squeeze in some reading. Recharge. Hoping the same for you. All the very best, Eric

Week-in-Review: Mon: Japan 2Q GDP 6.0% (2.9%e), Japan 2Q GDP Deflator 3.4% (3.8%e), Australia Wage Price Index 3.6% (3.7%e), China July Retail Sales 2.5% (4%e), China July Ind. Output 3.7% (4.3%e), NY Fed Survey of Consumer Expectations shows falling inflation expectations, S&P +0.6%; Tue: UK Unemployment 4.2% (4.0%e), UK Avg Weekly Earnings 8.2% (7.4%e), Sweden CPI 9.3% (9.3%e), Germany ZEW Investor Expectations -12.3 (-14.9e), Canada CPI 3.3% (3.0%e), US Adv Retail Sales 0.7% (0.4%e), US Retail Sales ex Autos 1.0% (0.4%e), US Empire Manufacturing -19.0 (-1.0e), Atlanta Fed 3Q GDP Now revised to 5.0% from 4.1%, RBNZ keeps rates unchanged at 5.50%, China announces it will suspend release of youth unemployment data after it reached a record high of 21.3% in June and was widely expected to have increased further in July, Russia’s central bank raises interest rates in emergency meeting to 12% from 8.5% in an attempt to stabilize the ruble, US Treasury data show large foreign sales of Treasuries (China, the second largest holder of Treasury securities, reduced holdings by $11.3Bn in June, UAE sold close to $4Bn, and Saudi Arabia reduced holdings by $3Bn), S&P -1.2%; Wed: UK CPI 6.8% (6.7%e), US IP 1.0% (0.3%e), MBA says US 30yr fixed mortgage rate reaches 7.16% highest since 2001, Fed Minutes reflect cautious optimism with recent inflation declines, S&P -0.8%; Thu: Norway keeps rates unchanged at 4.0%, US initial claims 239k (240k e), Philly Fed 12.0 (-10.4e), Japan CPI 3.3% (3.3%e), Bitcoin flash crash dropping 7% in 20 minutes, Chinese authorities tell state owned banks to increase intervention in the currency market, S&P -0.8%; Fri: UK Retail Sales -3.4% (-2.2%e), EU CPI 5.3% (5.3%e), S&P -0.1%

Weekly Close: S&P 500 -2.1% and VIX +2.46 at +17.30. Nikkei -3.1%, Shanghai -1.8%, Euro Stoxx -2.3%, Bovespa -2.3%, MSCI World -2.4%, and MSCI Emerging -2.4%. USD rose +12.6% vs Bitcoin, +11.0% vs Ethereum, +2.0% vs Sweden, +1.4% vs Australia, +1.3% vs Brazil, +1.1% vs Chile, +0.8% vs Canada, +0.7% vs Euro, +0.6% vs China, +0.5% vs Indonesia, +0.4% vs Turkey, +0.3% vs India, +0.3% vs Yen, +0.3% vs Mexico, and +0.2% vs South Africa. USD fell -4.5% vs Russia, and -0.3% vs Sterling. Gold -1.5%, Silver -0.1%, Oil -2.3%, Copper -0.5%, Iron Ore -3.3%, Corn +1.2%. 10yr Inflation Breakevens (EU -1bp at 2.37%, US -7bps at 2.31%, JP flat at 1.10%, and UK -2bps at 3.78%). 2yr Notes +5bps at 4.95% and 10yr Notes +10bps at 4.26%.

Year-to-Date Equities (high to low): Argentina +46.3% priced in US dollars (+189.1% priced in pesos), Greece +37.9% priced in dollars (+35.9% priced in euros), Hungary +36% in dollars (+28.4% in forint), NASDAQ +27% in dollars, Poland +26.2% (+18.5%), Mexico +25.7% (+9.8%), Ireland +22.9% (+21.1%), Italy +18.9% (+17.1%), Denmark +17.2% (+15.7%), Czech Republic +14.6% (+12.4%), Spain +14.3% (+12.6%), S&P 500 +13.8%, Chile +13.8% (+16.6%), Germany +13.5% (+11.9%), Euro Stoxx 50 +12.7% (+11.1%), Russia +12.5% (+44.4%), France +12.3% (+10.7%), Brazil +12% (+5.2%), Taiwan +11.6% (+15.9%), MSCI World +11.5% in dollars, Saudi Arabia +9.6% (+9.3%), Japan +8.8% (+20.5%), Netherlands +8.3% (+6.7%), India +6.1% (+6.7%), Switzerland +5.6% (+1%), Russell +5.6%, Korea +5.5% (+12%), Colombia +3.4% (-11.9%), UK +2.7% (-2.5%), Canada +2.2% (+2.2%), Indonesia +1.5% (+0.1%), Austria +1.2% (-0.3%), Portugal +0.9% (-0.6%), Sweden -0.1% (+5%), Belgium -1.8% (-3.3%), Norway -3.2% (+4.8%), Singapore -3.6% (-2.4%), China -3.9% (+1.4%), UAE -4% (-4%), Venezuela -4.3% (+77.7%), Australia -4.5% (+1.6%), Philippines -5% (-4.2%), Israel -5.2% (+2%), New Zealand -5.4% (+1.2%), Turkey -5.9% (+36.4%), Malaysia -8.4% (-3.3%), South Africa -9.3% (+1%), HK -9.6% (-9.3%), Finland -10.7% (-12.1%), and Thailand -10.9% (-9%).

Anecdote (June 2018): He would have me throw the bones, seated on animal skins in a quiet yurt. The cup’s contents tumbled across the floor. Tiny bones, hyena, lion, leopard, vulture, a small gold Krugerrand, colorful beads, ivory, crystal, ironwood. The South African had dedicated his journey to studying western medicine and Namibian shamanism; the former a miracle, the latter magical. He combined the two, shared the gift. Shamanism connects us with our ancestors, who protect, advise, guide. They communicate through the positioning of the bones, scattered on every roll. I avoided asking about the future. The idea that it is pre-ordained is deeply unsettling. A world where life sheds its uncertainty, where actions lack consequences, frightens me. I’d return from the Shaman and friends would ask what I’d learned about things that matter; health, wealth, tomorrow’s S&P close. But I spent the time looking back, fascinated by my place in this endless stream, how our lives bridge those behind us with those ahead. We discussed my dreams, often fantastic adventures, which I jotted down in the dark before they escaped. A few spiritual guides have been placed along my path, each unique, unlikely. The Shaman was also a father of four, but rather older. He shared much of himself, fears, failures, joys, discoveries. I shared the same. Charlie was just three, 2012, we knew he’d be our last. The weight of my work, the hours, the travel, left me anxious I’d not be there for them. The Shaman had lived the same fear, and to an extent had realized it. His career’s cadence left more time for his last child than first. And it shaped them all, uniquely. “But you can’t fear that. Let it go, completely. You’ll do all that you can. You may even be gone tomorrow, but their path continues. Their journey is not your journey. It is their journey.”

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.

BACK