To The Moon

If you’ve been fixated on the news flow around tariffs and stuck on the old narrative that Europe is doomed and can only regulate vs innovate then you might have missed the fact that European equities are up over +10% YTD.Change is in the air, a key set of breakouts and improving technicals serve as a timely prompt to consider whether there’s more to this —and more left in the move…What’s driving the strength in European Equities:Valuations: unlike expensive US stocks, European stocks are still cheap/reasonably priced, and trade at a record low valuation discount vs US. The thing I always emphasize is that when valuations reach such extremes they have a habit of speaking for themselves; the rubber band eventually snaps back.Monetary Policy: the European Central Bank began rate cuts earlier

Investment PerceptionsMining.com reports: “Gold $Barrick Gold Corp(GOLD)$ has surpassed equities as the second most popular long-term investment choice amongst Americans, according to the latest poll by Gallup“ Not quite ‘safe as houses‘, but getting closer to it. Very interesting snapshot of sentiment here (and quite the contrast for gold vs crypto).Gold Performance vs Consumer SentimentJim Paulsen remarks: "The greatest risk to gold investors is a breakout of Happiness! Should the tariff war wind down and the Fed cuts interest rates in a slow growing but sustained expansion, pessimism will finally ease, and the price of gold will sink." (in other words, if consumer sentiment rebounds it would imply based on the albeit tenuous relationship in th

Learnings and conclusions from this week’s charts:1. The rally has stalled at resistance.2. Seasonality is signaling imminent downside risk.3. Yet speculative risk sentiment is recovering.4. And there are many minds that could change (from bear to bull).5. Recession risk/talk is rising (and could be the key decider).Overall, a bull-bear stalemate has set in, and there are about as many things that bulls can point to that bears can also list when it comes to reasons for their views. As for where the market is sitting, it’s a window of optimism (and anxiety) for both bulls and bears with the floor and ceiling set (and a possible third option also lying in wait!) $S&P 500(.SPX)$ $SPDR S&P 500 ETF Trust(SP

GoldNuggets Digest: ETF holdings of gold $Gold - main 2506(GCmain)$ , gold price valuation indicator, gold vs bonds, family office asset allocations, gold price forecasts...Retail ArrivedTurns out the Gold price peaked just as retail started piling in. ImageExtreme ExpensiveWhile there are strong monetary tailwinds behind gold and an entrenched bull trend, the expensive valuation signal in the chart below —alongside overbought technicals, consensus bullishness, and extended flows/positioning— make for an uncertain outlook, and a period of consolidation and correction is probably a healthy thing for the gold price at this point. ImageGold vs BondsGold has done an outstanding job as a bond alternative — and has not only outperformed as a diversi

This week I covered the following topics:1. Global Growth Pulse: Soft data slumped in April from already waning levels, but the global hard data pulse is on an improving trend (following the lead set by bullish leading indicators).2. Ups & Downs: There is almost a precise balance of downside and upside risks on the list, it serves as a good reminder about not getting too carried away on the bull or bear side.3. Commodities: Remain bullish given promising technicals (and flows/sentiment/positioning), cheap valuations, light capex, and mixed-to-positive demand outlook (with scope for upside).4. Emerging Markets: Remain bullish EM equities on strengthening technicals, reset in sentiment/flows, cheap valuations, and light allocations by investors (+turning point in relative performance).5.

It’s not just the unthinkable on the macro side, here’s an insight into how global equities are tracking; with a specific focus on global ex-US.While the $S&P 500(.SPX)$ remains below its 200-day moving average, 74% of the countries we track are currently trading *above* their 200dma (see breadth indicator below). And while the S&P500 is still about 9% below its peak, global ex-US equities are within inches of making a new all-time high.Part of this has to do with USD weakness (as the index below shown in US$ terms), but that’s also partly the point. The currency weakness actually reflects the relative macro predicament that the USA finds itself in vs the rest of the world. And with global stocks still trading at a massive discount vs the

This week’s chart comes from the latest Market Cycle Guidebook and presents a sort of “what if?“ scenario… one that is probably “unthinkable“ from the standpoint of where consensus seems to have drifted to.Basically the key premise in the chart is that there has been a clear Global pivot to monetary policy easing already — and with the usual leads/lags of policy transmission there should be a bunch of monetary tailwinds coming into play right about now.So instead of getting a recession, what if we get the opposite?(what if growth accelerates rather than stalls?)That’s not to dismiss the real adverse impacts of the tariff shock…And when it comes to the USA specifically, there are a lot of short-term pain points from policy moves this year e.g. fiscal tightening from DOGE cuts vs previous ye

With the negative Q1 GDP print of last week and soft CPI reports, the prospect of a disinflationary recession is being raised. One school of thought is tariffs will drive inflation higher, the other school of thought is that tariffs will drive costs higher and squeeze profit margins and discretionary incomes — and end up being deflationary to demand…The possibility of a disinflationary recession would certainly be bond bullish — and as it so happens, we’re just getting into the part of the year which has historically been good for bonds (bonds have had a historical tendency for seasonal strength from May through to October).So just as the seasons are turning bad for stocks, it may now be the season for bonds.For whom haven't open CBA can know more from below:🏦 Open a CBA today and enjoy pr

Learnings and conclusions from this week’s charts:The S&P500 $S&P 500(.SPX)$ closed April down just -0.76% (and -5.3% YTD).The index cleared 2 key bullish milestones late last week.Yet bears still hold hope for a failure at the 200dma or 5800.Seasonality is set to sour (see “sell in May” stats).One bull case is that we just had a late-cycle reset (like 1998).Overall, it’s fascinating to reflect on how sharp things rebounded; if you hadn’t looked a day at markets in April you might wonder what all the fuss was about. But with initial bullish milestones passed, the next pinch-point is coming into focus. With bears about to give up, lingering policy uncertainty, and a prospective macro eye-of-the-storm moment, May will be very interesting for

The monthly Market Cycle Guidebook is a key resource for investors — providing insight into the stage of the business cycle, monetary policy trends, leading indicators, earnings momentum, valuations across multiple different assets and markets, long-term return expectations, and tactical asset allocation views.Key Findings from the Latest Monthly pack:Global monetary policy settings are increasingly shifting from headwind to tailwind as inflation falls and economic cycle data remain soft.The big edge risks are recession and deflation on one edge vs reacceleration and inflation resurgence on the other edge.In practice given what has gone on in the US so far this year, it is now likely that the US economy faces a recession or at least short-sharp-slowdown.Meanwhile the rest of the world may