Join institutional investors, analysts and strategists from the world's largest banks: Subscribe today for as little as $7/month
Already have an account? log in
Marko Kolanovic Returns, Sees Value, Emerging Market Rally, Says Fed Should ‘Skip A Hike’
You'd be forgiven if you're feeling a bit trepidatious about the outlook for risk assets at the moment.
After all, trade tensions are mounting and last week's Trump-Juncker "deal" notwithstanding, there doesn't seem to be a light at the end of this tunnel. There's an argument to be made that any deal between Trump and the E.U. will likely make the President even less inclined to strike a conciliatory tone on China, although not everyone agrees with that assessment.
If you're looking for evi
1) “For one thing, Kolanovic thinks now might be a good time to bet on the long-awaited growth-to-value rotation.”
Can anybody – presumably someone with a wicked sense of humour – tell me where to find ‘value’ today in any meaningful sense of the word?
2) “….our view is that a slower pace of hiking is the right thing to do given the divergence of US and international rates….”
Powell couldn’t have made it any clearer that he thinks his mandate is domestic – as it should be. He could have been ‘mis-speaking’ (h/t Hillary). But a central banker wouldn’t do that. No, of course not.
Powell wouldn’t skip a hike anyway. And the fixed income and executive management fantasies about higher rates might mean JPM asks Gandalf to take a hike, as if he was recommending BitCoin. The big deal is the tone of BAML being relatively bold about shorting. The docile low VOL backdrop is melting.
Morgan Stanley is out today with a market note, expecting a serious tech correction. I agree with their view that a rotation into value will still result in portfolio draw-down, since the big tech stocks have grown to such outsized positions in so many ETF’s, indexes, mutual and hedge funds.
In today’s world, anything short of another “All Time High” for the stock market is greeted with a cry for stimulus and lower interest rates. That cry is coming from the POTUS, many fund managers, and some of the dovish Fed regional heads. Does anybody but me and Heisenberg want the market to discover prices and interest rates without such direct political interference?