Episode Details
| Title | Bits + Bips: Why ‘All Assets Will Go Up’ in the Near Future - Ep. 716 |
|---|---|
| Date | 10/9/2024 |
| Podcast | Unchained ↗ |
Key Insights
Bullish:
- 🟢 $RATECUTS - Despite a strong payrolls report erasing expectations for Fed rate cuts, Alex suggests the outlook for assets remains bullish due to money flowing out of short-term money markets and into equities, bonds, crude, and gold. Joe agrees, adding that China's actions could force the Fed's hand.
- “Payrolls came in extremely well and to the point that the the market... we took out 1 or 2 cuts off this year. And furthermore, we also took out cuts off to 2025... the market's expectations of the probability of recession hitting in the US And with payrolls, that pretty much evaporated very quickly. So you could be saying that as of now, the market is, payrolls are indicating the Fed is right. That doesn't change the fact that rate cuts are coming, liquidity is just gonna be flowing into the market.” - Alex (35:38)
- “I think in my opinion it's more about the US than China, but it doesn't matter, both help, both go in the same direction. It's a reflation story. And that basically what it means as Niko I think said earlier on is it means all assets go up. That's what it means. It means that money is coming out of the short end of the curve, coming out of money markets as getting basically allocated to equities, bonds, crude, gold. Equities are a growth story, meaning no recession, long equities. Rates coming down means long term bonds. Trump is going to have an impact there. Middle East is long crude and gold. Real rates coming down means long gold. And, what gives is precisely short term money.” - Alex (35:38)
- “I largely agree with everything Alex just said. The payrolls number definitely changed our view dates metric on the 50 bps cut that we were anticipating in November... There is a case to be made that if China does something to the equivalent of, say, a 50 bps rate cut, not saying they would do that directly, but the equivalent of that, it actually would force the hand of the Fed to do something similar to keep up with that. Because if the United States wants to basically say, hey. We're gonna be the growth driver. We let BRICs do it in the past 20 years. Now it's our turn again, so to speak. They have to actually kinda go toe for toe with what, you know, the PBOC actually does. So do I still think 25 as we sit here today? Yes. But there is still a case to be made based on a potentially negative CPI print coupled with what happens out of China directly influencing the Fed and the US Treasury.” - Joe (38:08)
- 🟢 $MEME - 🔒
- 🟢 $BTC - 🔒
- 🟢 $OIL - 🔒
- 🟢 $UTIL - 🔒
- 🟢 $RUT - 🔒
- 🟢 $GLD - 🔒