Use a radar. Not a crystal ball. $VPX Combining fundamental macro analysis with advanced quantitative modelling.
NYC, Charlotte, London
Joined May 2009
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Picking winners feels hard. Avoiding the losers feels easier.
$VPX uses the capital cycle, quality, and crowding to kick out the worst ~400 stocks from the largest 500 US stocks, while utilizing macro risk models to react to the business cycle.
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Interesting data points on the GPU depreciation/obselence debate. While VCs need to talk their book, the numbers are the numbers. DRAM prices also holding up.
Inflation breadth still looks pretty muted. Trimmed mean PCE is annualizing around 2%, while just under half of the CPI basket is rising at more than 2% annualized.
Inflation remains an energy shock story, but the ability of companies to pass this onto a tapped-out consumer with real income headwinds seems limited. Sure the upper-K with AI or equity exposure is still doing ok, but inflation is about the median consumer.
USD rally looking pretty exhausted, with breadth rolling over. Hawkish monetary policy is already priced in, but the market is not yet worried about the hit to housing and consumers from higher yields.
US refined product inventories remain at decade lows. This is a known unknown but the energy tail risks remain too large to dismiss.
Diesel export bans are normalizing beggar-thy-neighbor policies, while the risk of a food shock into this enegy shock means it is no longer just a markets problem, it becomes a social stability problem.
Europe needs to issue a lot of debt. Who is the natural buyer?
From a global imbalance point of view, it has to be the surplus countries.
China is the default surplus country.
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I heard Perry Mehrling has passed. His course on the economics of money and banking and his books were intellectually foundational for myself and so many others. The one time we met he told me to go to @BIS_org after college for which I will be forever grateful. Rest in peace.
energy shock + food price shock is a very dangerous social cocktail.
Policymakers won't sit idly by;
they'll address it via fiscal.
US Inflation breadth is surprisingly muted, while Iran and El Niño remain tail risks.
US Inflation leading indicators still rolling over.
Central banks are forced to prioritize inflation credibility due to a poor track record since Covid, so they're more willing to accept growth downside risks today.
China Growth LEI weakens further on domestic demand drag, getting closer to policy pivot.
it has fallen four months straight.
Variant Perception retweeted
Consumer spending at gas stations is up +24% y/y, contributing nearly the entire rise in consumption.
Excluding gas stations, US retail spending is growing at its slowest pace two years.
Central banks are hiking into weakening growth and the inflation impulse is already negative.
Our Inflation input diffusion is very weak. Outside energy, the trend is disinflation.
Consumers might be the weak link.
Their margin of safety is thin.
Real disposable income per capita has stopped falling, but is only growing around 1% annualized.
That's near cycle lows.
Since the Fed started hiking, there are more signs we are shifting to a late cycle regime with narrowing activity and narrowing market breadth. This is the awkward part of the cycle where things are rotating from "risk-on" to "neutral", but not yet at "risk-off".
