Need Another Excuse To Short The Dollar? CTAs’ Extrapolated Longs Will Do!
Looking for more excuses to be short the dollar on a "tactical" basis?
Probably not. After all, the list is already pretty long and while I assume you could point to Wall Street consensus (which is generally bearish on the greenback) as the ultimate contrarian indicator, the case for dollar weakness is pretty strong in the near-term.
For one thing, the Fed has decisively pivoted dovish and it seems likely that March and June are now off the table barring another 10% rally in the S&P and an
Mr. H. Apparently Bond “Truth” King says the United States is on an ‘ocean of debt.’ Is this true, and has this ever come up in your analysis? :-p
I’ve covered Jeff’s every word on US debt. I didn’t cover that Barron’s interview you’re referencing because he said the same thing the previous day on his webcast.
ex:
https://heisenbergreport.com/2019/01/08/jeff-gundlach-talks-horrific-situations-relativistic-opportunities-bitcoin-in-annual-webcast/
https://heisenbergreport.com/2018/09/11/jeff-gundlach-slams-u-s-fiscal-policy-in-miracle-grow-webcast-says-monumental-treasury-short-squeeze-possible/
https://heisenbergreport.com/2018/07/15/its-like-a-death-wish-jeff-gundlach-takes-aim-at-toxic-policy-mix-demands-you-respect-the-curve/
During that interview it’s Bhansali who said the most interesting things.
“Picking up on what others have said here, investors are focused unduly on one risk–earnings risk–whether companies are going to miss earnings, meet earnings, or beat earnings. Instead, they should focus on balance-sheet risk, which is the highest ever. General Electric ’s [GE] stock collapsed because of the company’s balance sheet, not just because of its weak earnings. That is the big cue that equity markets need to pay attention to. There will be a shift among equities. Cash will no longer be a four-letter word. Debt will become a four-letter word. The thing to bet on in coming years is net-cash companies [companies whose cash exceeds their debt].”
“The consumer-staples sector hasn’t prepared itself for the onslaught of price transparency in an online, digital, e-commerce world, which is the opposite of the bricks-and-mortar world in which one can price-discriminate by customer segment and distribution channel.”
“Equity markets need to rethink the notion of risk in every sector. The consumer-staples sector is revered for its high returns but not feared for its high risk exposure–whether it’s disruption risk, valuation risk, or whatever. There is going to be a whole reset of risk premiums across these vectors. The less attention we pay to them, the more they will come back to haunt us.”
“I’m negative on emerging markets and have been for the past decade, during which they significantly underperformed developed markets. Emerging markets benefit most from quantitative easing. As interest rates collapsed, they became prolific borrowers on both a country and corporate basis. Second, liquidity risk in these markets is significant. A lot of money is chasing very few stocks and bidding up allocations, even if EM allocations haven’t gone up.”