MAD Macro - Old Ghostbusters and Presidents
Getting Too Old to be Ghostbusters?
Getting Too Old to be Presidents?
Who you gonna call, old presidents? The Democratic fund raiser at Radio City Music Hall last week was a big success. A $25 million success. The three presidents were lifted on an elevator from below the stage like a Broadway show. Good thing for the Tin Man, no stairs. He is the oldest of the three. The crowd loved it, even though they were a few minutes late. Bill got lost sniffing around the Rockettes dressing rooms. But like old Ghostbusters, there comes a time to hang it up. Sequels and do-overs rarely work. The newly released Ghostbusters movie is appropriately named, Frozen Empire. If we elect either the Tin Man or the Orange Mad King I our next President, maybe we could name it Frozen Empire II. No matter who wins this November it’s likely that all of the ghosts from the past get lose again. The debt ghost, the war ghost, the inflation ghost and the recession ghost. Who you gonna call? Please not the old presidents.
Bloomberg has a feature article on Bridgewater today, linked here. It’s all about the firm’s new CEO, Nir Bar Dea. It claims that Bar Dea has been in complete control of Bridgewater for 18 months. I don’t think so. Ray is still the guy behind the curtain pulling all of the levers and pushing all of the buttons. The article says that Bridgewater’s flagship Pure Alpha fund was up 15.8% through March 26th. By the way, Pure Alpha might be the best name ever for a macro hedge fund. Sadly, the fund did not find very much pure alpha over the last 10 years. Bar Dea puts a positive spin on the fact that the fund is losing investors. He believes now that it’s only managing $75 billion, down from over $100 billion, the outlook for returns will improve. I don’t think investors will wait around. Market trends remained intact from March 26th through quarter end. If the final Pure Alpha number is materially different than up 15.8% it will be a big warning sign that there is some funny accounting going on at Bridgewater.
Friday’s PCE inflation report was slightly better than expectations. It’s still not great news. Inflation looks like it has stopped falling and might even turn back up in the near term. Jay Powell gave a lengthy interview on Friday after the PCE release. Jay said, no worries, the path to 2% is just a little bumpy. Jay is still trying to let the markets know that a June ease is coming. Remember, saving democracy is far more important than 2% inflation. Markets seem to be getting it. Risk assets and gold are all making new highs this morning. Jay is pumping more air into the AI bubble. Crude oil is a little lower today but is still near the highs of the year. Helima Croft, the Head of Global Commodity Strategy at RBC, made an interesting point on CNBC early this morning. She said that Ukraine has been attacking Russia’s oil refining infrastructure to put more pressure on the Tin Man’s administration to provide additional military support. Apparently, the Tin Man does not want them attacking Russia’s oil industry because he wants to keep a lid on global oil prices for the election this fall. She thinks that if Ukraine starts attacking Russia’s crude oil production that global oil prices will rally sharply from here.
I updated the U.S. Dollar Index, U.S. 10yr yield, WTI crude oil, spot gold, spot gold weekly, bitcoin, S&P futures and NASDAQ 100 futures charts below.
The dollar is a little higher, close to testing the highs of the year. Interest rates are unchanged across the curve.
Crude oil is a little lower but holding near the highs of the year. Spot gold is off of the overnight highs but sharply higher making new all-time highs again. Bitcoin is a little lower but is holding the 2021 highs of 68,900 as a support level.
S&P and NASDAQ 100 futures are higher today. The S&P is making new all-time highs again.
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Unless otherwise stated, Bloomberg is the source of all data and charts.
S&P 500 futures are a type of derivative contract that provides a buyer with an investment priced based on the expectation of the S&P 500 Index’s future value. Nasdaq 100 futures are commodities futures products traded within the equity futures sector. West Texas Intermediate (WTI) oil is a benchmark used by oil markets, representing oil produced in the U.S. Brent Crude Oil is a blend of crude oil recovered from the North Sea in the early 1960s, whose price is used as a benchmark for the commodity's prices. The U.S. dollar index (USDX) is a measure of the value of the U.S. dollar relative to the value of a basket of currencies of the majority of the U.S.'s most significant trading partners. UBS Bloomberg Constant Maturity Commodity Index is a total return rules-based composite benchmark index diversified across commodity components from within specific sectors.
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