Dusted off an anecdote from 2017 about the sound of silence (see below). Back in a couple weeks with full wknd notes. All the very best, E
Week-in-Review: Mon: Fed’s Daly voices support for gradual easing - rejects idea of 50bp cut in Sept / Kashkari says open to Sept cut, Blinken says Netanyahu accepts latest Gaza ceasefire proposal / next step is for Hamas to agree, Ukraine seeks ‘buffer zone’ with Russian incursion, Japan core machine orders -1.7% (1.1%e), US leading index -0.6% (-0.4%e), S&P +1.0%; Tue: Biden headlines night 1 of the DNC – passes torch to Harris, Riksbank cuts 25bp as exp – pushed back on committing to cut every meeting, CBRT unch as exp, RBA mins highlighted not expecting infl to come back to target until late 2026, Mexico judiciary workers protested against AMLO’s judicial reform plan, BCB gov Campos Neto said rate hikes are less certain than mkts think, China 1y & 5y LPR unch as exp, Germany PPI -0.8% as exp, Mexico ret sales -3.9% (-2%e), Canada CPI 2.5% as exp / Core 2.7% (2.8%e), S&P -0.2%; Wed: Gaza ceasefire remains challenged, Indonesia CB unch as exp / Gov Warjiyo says will keep attractive yield to attract capital inflows, BLS revises down payrolls for 3/23 --> 3/24 period -818k (in range of expectations), Fed mins show ‘vast majority’ saw Sept cut as likely / ‘several’ saw a case for a July cut, UK Public borrowing 3.1b (1.5b exp), S. Africa CPI 4.6% (4.8%e) / Core 4.3% (4.5%e), S&P +0.4%; Thu: Brazil CB’er Galipolo’s speech implied mkt pricing too many rate hikes, Fed’s Schmid says needs more data before cutting / Collins supports gradual easing / Harker not in the “25bp or 50bp camp”, BOK unch as exp / strikes a dovish tone, China approves 11 new nuclear power plants, Texas court blocked FTC’s ban on non-compete agreements, Argentina economic activity -3.9% (-1.6%e), EU flash PMIs mfg 45.6 (45.8e) / serv 53.3 (51.7e) / comp 51.2 (50.1e), Mexico 2Q GDP 2.1% (2.2%e) / June eco activity -0.60% (-0.05%e), US init claims 232k as exp, US flash PMIs mfg 48 (49.5e) / serv 55.2 (54e) / comp 54.1 (53.2e), EU cons conf -13.4 (-12.6e), US KC Fed mfg activity -3 (-9e), S&P -0.9%; Fri: Powell says the time has come for policy to adjust / they are not seeking further labor market cooling, RFK Jr ends bid and supports Trump, BOJ’s Ueda suggests December as the next hike, Harris formally accepts Democratic nomination on final night of the DNC, Canadian rail workers to return to work after gov’t intervention in lockout negotiations, Indonesian lawmakers scrap controversial push to revise regional election laws, Fed’s Bostic still sees inflation dashboard flashing red, Japan CPI 2.8% (2.7%e) / Core 1.9% as exp, ECB 1y CPI exp 2.8% (2.7%e) / 3y infl exp 2.4% (2.3%e), US new home sales 739k (623k exp), S&P +1.2%.
Weekly Close: S&P 500 +1.4% and VIX +1.06 at +15.86. Nikkei +0.8%, Shanghai -0.9%, Euro Stoxx +1.3%, Bovespa +1.2%, MSCI World +1.8%, and MSCI Emerging +0.6%. USD rose +2.5% vs Mexico, +2.1% vs Russia, +0.9% vs Turkey, and +0.3% vs Brazil. USD fell -5.5% vs Bitcoin, -3.2% vs Chile, -3.1% vs Ethereum, -2.5% vs Sweden, -2.2% vs Yen, -2.0% vs Sterling, -1.9% vs Australia, -1.5% vs Euro, -1.3% vs Indonesia, -1.3% vs Canada, -1.0% vs South Africa, -0.5% vs China, and -0.1% vs India. Gold +0.3%, Silver +3.4%, Oil -0.9%, Copper +1.5%, Iron Ore +2.7%, Corn -0.4%. 10yr Inflation Breakevens (EU flat at 1.79%, US +4bps at 2.12%, JP +5bps at 1.37%, and UK -2bps at 3.45%). 2yr Notes -14bps at 3.92% and 10yr Notes -8bps at 3.80%.
2024 Year-to-Date Equity Index Close: Venezuela +60% priced in US dollars (+63.8% priced in bolivars), Argentina +47.9% priced in US dollars (+72.8% priced in pesos), Denmark +20.4% in dollars (+19.3% in krone), NASDAQ +19.1% in dollars, Taiwan +18.2% (+23.6%), Hungary +18.1% (+20.3%), S&P 500 +18.1% in dollars, Malaysia +18% (+12.4%), Netherlands +16.6% (+15.5%), MSCI World +15.2% in dollars, India +13.4% (+14.2%), Spain +12.8% (+11.6%), Turkey +12.6% (+29.4%), South Africa +12.5% (+9.2%), Germany +12.3% (+11.2%), Belgium +12% (+10.9%), Italy +12% (+10.9%), Greece +11.9% (+10.8%), Japan +11.5% (+14.6%), UK +11.3% (+7.7%), Czech Republic +11.2% (+11.7%), Poland +10.3% (+7.3%), Ireland +10.2% (+9.1%), Euro Stoxx 50 +9.7% (+8.6%), Switzerland +9.5% (+10.9%), Russell +9.5% in dollars, Norway +8.7% (+12.7%), Canada +8.6% (+11.1%), Austria +8.5% (+7.4%), Colombia +6.6% (+11.4%), Singapore +5.8% (+4.6%), Philippines +5.7% (+7.9%), Sweden +5.2% (+6.8%), Australia +4.9% (+5.7%), Israel +4.4% (+7.7%), New Zealand +4.3% (+6.5%), HK +3.5% (+3.3%), Indonesia +3.2% (+3.7%), Saudi Arabia +1.8% (+1.9%), France +1.4% (+0.4%), Finland +1.3% (+0.3%), Chile +1% (+4.3%), Korea -1.3% (+1.7%), UAE -2.1% (-2.1%), Portugal -2.1% (-3.1%), Thailand -3.9% (-4.3%), China -4.4% (-4.1%), Brazil -10.7% (+1.1%), Mexico -17.1% (-6.8%)
Anecdote (Oct 2017): “The trajectory will be a bit like the market,” said my friend. I’d reached out, looking for direction, a path. A recent knee operation has left me on crutches. A gimp. Which is no big deal but for the fact that my long daily walks, runs or cycles are off the table for three months. Perhaps more. “The long-term trajectory is up and very rewarding,” he continued. As a young man, I filled my life with noise. Commodity pits, trading floors, airplanes, cities, hustle. People. And at age thirty-two escaped for a year, to the mountains, where I filled my time with silence. The sound was haunting, lonesome. “But there will be dips, plateaus and volatility on the way.” Vacuums frighten us. Nothingness is terrifying. At least at first. But in time, the sublime quiet of a long, strenuous trek became my destination. The majesty of a midnight journey through the snowy, moonlit forest, my hidden treasure. A mountain sunset, a miracle. The source of inspiration, fascination, strength. “Just like markets – these blips in your meditative practice are generally sowing the seeds for the next inner bull market.” Back at sea level, surrounded by so many sounds, I return to that solitude often, on a bike or on foot. And returning to that place, I find energy, clarity. Into that emptiness, all sorts of wonderful ideas appear, swirl, intermingle, connect. Spontaneously, magically. Which is why – now a sedentary, agitated gimp – I reached out to this friend for advice, instruction. He exudes that inner calm, peace, and depth, cultivated through years of quiet practice, discipline. He directed me to Jack Kornfield’s book, Seeking the Heart of Wisdom – The Path of Insight Meditation. “So stay invested…”
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.