Hope all goes well… Dusted off an anecdote from 2014 about life’s ten superpowers (see below). Enjoy President’s Day weekend. Back next Sunday with full wknd notes. All the very best, E

Week-in-Review: Mon: Chinese Lunar New Year holiday begins = quiet markets, ECB’s Panetta says the reversal of policy is fast approaching, RBNZ gov Orr pushed back against recent bank calls for more hikes, Moody’s downgrades Israel / Israel began airstrikes in the controversial Rafah area, BTC tops $50k for first time since Dec 2021, India IP 3.8% (2.5%e), India CPI 5.1% (5.0%e), S&P -0.1%; Tue: US CPI 3.1% (2.9%e) / Core 3.9% (3.7%e), Senate passed $95b aid package (70 out of 99 votes) to Israel/Ukraine/other allies, OPEC report shows only 2 members implemented their share of cuts / OPEC sec general says continue to see signs of improving oil demand, Sec of Homeland Sec Mayorkas impeached by GOP controlled House, Japan PPI 0.2% (0.1%e), UK ILO Unemp rate 3.8% (4.0%e), Germany ZEW exp 19.9 (17.3e), EU ZEW exp 25 (22.7p), US NFIB 89.9 (92.3e), S&P -1.4%; Wed: Prabowo ‘unofficially’ wins Indonesia presidential election in first round – much better performance than expected earning ~60% of the vote (just under 50% exp), Dem Souzzi wins highly contested special election to replace ousted Rep. Santos in NY 3rd district, Japan MOF’s Kanda (FX Chief) says recent ccy moves have been rapid and authorities are ready to intervene / FinMin Suzuki says watching FX markets with strong sense of urgency, Fed’s Goolsbee highlights the infl target is tied to PCE not CPI / says no need to wait for infl to return to 2% before cutting, BOE gov Bailey says January wage growth saw quite a marked reduction, UK CPI 4.0% (4.1%e) / Core 5.1% (5.2%e) / RPI 4.9% (5.1%e), Hungary GDP 0.0% (0.6%e), Poland GDP 1.0% (1.1%e), EU GDP 0.1% as exp, EU IP 1.2% (-4%e), S. Africa Ret sales 2.7% (-0.1%e), Russia CPI 7.44% (7.30%e), S&P +1.0%; Thu: UK and Japan enter technical recession with 4Q GDP falling / Japan 4Q GDP -0.4% (1.1%e) / UK 4Q GDP -0.2% (0.1%e), Japan’s economy falls to 4th largest – now behind Germany, reports that Russia developing technology to send nuclear weapon into space, Fed’s Barr supports careful approach to policy normalization, ECB’s Lagarde warns against hasty rate cut and sees wage gains as important infl driver, Putin says Biden more reliable alternative for Russia than DJT, new AI tool from Apple expected to rival MSFTs GitHub Copilot, Trump’s hush-money criminal case set for 3/25, Australia emp chg 0.5k (25k exp) / Unemp rate 4.1% (4.0%e), UK IP 0.6% (-0.4%e) / mfg prod 2.3% (0.6%e), Poland CPI 3.9% (4.1%e), US Empire mfg -2.4 (-12.5e), US retail sales control -0.4% MoM (0.2%e), US import prices -1.3% as exp, US init claims 212k (220k exp), US IP -0.1% MoM (0.2%e), US NAHB housing mkt index 48 (46e), S&P +0.6%; Fri: Alexey Navalny dies in Russian prison, Fed’s Bostic says no rush to cut rates with economy this strong / not comfortable yet that infl dropping to target, BOJ’s Ueda signals that ‘technical recession’ won’t derail plans to end NIRP, China LNY travel up ~20% from previous year, House GOP member Emmer says won’t pass another stopgap bill, ECB’s Villeroy says risk of cutting too late is as big as cutting too early / Schnabel warns against cutting too early, S. Korea unemp 3% (3.2%e), UK ret sales 0.7% (-1.6%e) / Core 0.7% (-1.5%e), Russia CB unch as exp, US housing starts 1.331m (1.46m exp), US PPI 0.9% (0.6%e) / Core 2% (1.6%e), US UofM sentiment 79.6 (80e) / exp 81.5 (82.5e) / 1y infl 3% (2.9%e) / 5-10y infl 2.9% (2.8%e), S&P -0.5%; Sat: Navy men’s lacrosse loses to Towson 17-5.

Weekly Close: S&P 500 -0.4% and VIX +1.31 at +14.24. Nikkei +4.3%, Shanghai +0.0%, Euro Stoxx +1.4%, Bovespa +0.5%, MSCI World +0.1%, and MSCI Emerging +2.1%. USD rose +1.7% vs Russia, +0.6% vs Yen, +0.5% vs Turkey, +0.2% vs Brazil, +0.2% vs Sterling, +0.2% vs Canada, +0.2% vs Chile, and +0.1% vs Euro. USD fell -10.3% vs Ethereum, -9.1% vs Bitcoin, -0.7% vs South Africa, -0.2% vs Mexico, -0.2% vs Sweden, -0.1% vs Australia, -0.1% vs Indonesia, flat vs India, and flat vs China. Gold -0.7%, Silver +3.9%, Oil +3.1%, Copper +4.3%, Iron Ore +0.0%, Corn -2.7%. 10yr Inflation Breakevens (EU -2bps at 1.98%, US +8bps at 2.33%, JP +3bps at 1.18%, and UK -1bp at 3.53%). 2yr Notes +16bps at 4.64% and 10yr Notes +11bps at 4.28%.

2024 Year-to-Date Close: Turkey +18.6% priced in US dollars (+23.8% priced in lira), Argentina +10.9% priced in US dollars (+14.6% in pesos), Denmark +10.9% in dollars (+13.9% in krone), Japan +7.8% (+15%), Netherlands +6.2% (+9.1%), Greece +5.9% (+8.7%), Philippines +5.5% (+6.6%), NASDAQ +5.1% in dollars, S&P 500 +4.9% in dollars, Saudi Arabia +4.3% (+4.3%), Hungary +3.8% (+8.5%), Ireland +3.7% (+6.5%), Colombia +3.7% (+5.2%), MSCI World +3.7% in dollars, Euro Stoxx 50 +2.7% (+5.4%), Italy +1.8% (+4.5%), India +1.7% (+1.4%), Russia +1.3% (+4.6%), Malaysia +1.2% (+5.4%), Taiwan +1.2% (+3.8%), France +0.3% (+3%), Russell +0.3% in dollars, Israel -0.2% (+0.6%), Poland -0.3% (+2.2%), Czech Republic -0.4% (+5.3%), Germany -0.5% (+2.2%), Canada -0.6% (+1.4%), Indonesia -0.8% (+0.9%), Mexico -1.1% (-0.4%), UK -1.5% (-0.3%), UAE -1.6% (-1.6%), Singapore -2.5% (-0.6%), Belgium -3% (-0.5%), Switzerland -3.2% (+1.6%), Sweden -3.3% (+0.5%), Austria -3.4% (-0.8%), Australia -3.5% (+0.9%), Korea -3.6% (-0.2%), New Zealand -3.8% (-0.4%), Finland -4.3% (-1.7%), HK -4.3% (-4.1%), Spain -4.7% (-2.1%), China -4.9% (-3.7%), Norway -5.8% (-2.2%), Brazil -6.3% (-4.1%), Thailand -7% (-2.1%), Chile -7% (+2.2%), South Africa -7.8% (-4.7%), Portugal -11.3% (-8.9%), Venezuela -11.9% (-10.8%).

Anecdote (March 2014): “I knew that day, without a shadow of a doubt, I knew,” explained my new buddy. Before that break-through, before becoming a household name with $100mm+ in annual sales, he and his brother spent five years living in a van. Broke. Slinging t-shirts. “We didn’t care about clothing, still don’t, for us the t-shirt was a way of sharing a message.” And in search of something inspired, they turned to Shakespeare, Homer, Churchill, Einstein, Roosevelt. “We sought the essential source of strength in every great historical figure – and discovered the ten superpowers.” Simplicity. Humility. Humor. Creativity. Courage. Love. Gratitude. Fun. Authenticity. Optimism. “Throughout world history, no great people were pessimists, no one who consumed himself with all the things that are wrong with the world ever achieved anything of lasting value,” he explained, expecting an impassioned argument. You see, he assumed those of us who ply dark-art hedge fund finance are out to destroy. A mutual friend had us hang out, expecting a colorful conversation. But much to his surprise, found we had little to disagree on. Because, of course, the history of investing is a tale of the inexorable rise from lower left to upper right, dominated by those who possess superpowers. Investors have fueled mankind’s rise from the capital misallocation of King Tut to the triumph of Tesla. Some of us may side-step periodic corrections, even occasionally profiting from the fall. But the real money is made by betting on winners, funding transformational technologies, and salvaging the deeply distressed. Anyhow, he finished his tale. “With $75 in the bank, we printed 48 t-shirts with a smiling character and three simple words – they sold out in 45 minutes – hadn’t ever happened before, that’s when we knew.” You see, their message touched something in us all. Something simple. Profound. “Life is Good.”

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.