Interesting TACs of the Week (December 30 – January 5, 2018)

Summary – A top-down review of interesting calls and comments made last week in Treasuries, monetary policy, economics, stocks, bonds & commodities. TAC is our acronym for Tweets, Articles, & Clips – our basic inputs for this article.

Editor’s Note: In this series of articles, we include important or interesting Tweets, Articles, Video Clips with our comments. This is an article that expresses our personal opinions about comments made on Television, Tweeter, and in Print. It is NOT intended to provide any investment advice of any type whatsoever. No one should base any investing decisions or conclusions based on anything written in or inferred from this article. Macro Viewpoints & its affiliates expressly disclaim all liability in respect to actions taken based on any or all of the information in this article. Investing is a serious matter and all investment decisions should only be taken after a detailed discussion with your investment advisor and should be subject to your objectives, suitability requirements and risk tolerance.

 

1.Santa’s Stampede

Last week, we wondered whether Santa was coming. That was answered this week with a reindeer stampede. Having lived in Texas & being a fan of westerns, stampede is somewhat familiar to us but this week’s reindeer stampede was a sight to behold. And unlike a cattle stampede that leaves behind devastation, the reindeer stampede left happy hearts & singing portfolios at the end of the week.

David Tepper made a wow comment by saying this year is like the beginning of 2017. He further opined that unless & until bonds sell off, the stock rally will continue. There are two ways to see & say this. First the simple:

Now the convex way:

  •   What you are witnessing in the convexity seen in bond prices applied to equities and earnings as the fed is now over 300 bips behind the curve. Fighting against it has proven to be equally, if not more so insane

So how should we trade this? One highly simple answer is #GiddyUp:

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