Macro Dragon: The Media Front... 

Overview…

• Once again, don’t forget we got JD.COM HK trading for the first time today, it opened up c. +6%, will be interesting to see how it fares on a generally light bearish skew across equities this morning in Asia. So far we got US futs. Down c. -1.1% & HSI -1.0%...  

• One can trade the stock through the Saxo Spaceship platform under ticker 09618:xhkg, & for those inclined on the shorting / to wanting leverage side of things, we also have CFDs available & no doubt will be able to also source locates.  

• As we said in yest: Macro Dragon: JD.COM Coming Home With HK Listing , this trend is set to continue & the FT (clearly a MD reader! :) has a piece today, flagging that fast food name Yum is also looking for a HK listing: Yum China seeks banks for potential Hong Kong secondary offering. KVP would keep the local brokers (ICBC, CITIC, etc) on the radar as huge beneficiaries of this US/CH rift as they win mandates for China Tech champions coming back to list at home. This should also be VERY bullish for the listed Hong Kong exchange whose price chart seems to be consolidating before a break upward.

• Speaking of breakouts, pull out a Spotify chart when you get the chance… talk about breaking-out higher! These are the inverse of what you should be shorting… i.e. Jump-on long trades, stop below the previous close of the break-out & just ride that horsey into the sunset with some trailing stops.

   

• Look out for Bank of England decision today, Dembik put out a piece earlier this wk, whereby we are in-line with the consensus expectation of more QE with an additionally 150bn in sterling, as a house we are also very open to negative rates being a higher delta & sooner than most people may think in the UK. Please check out his note:

BoE Call: Looking for QE increase of £150bn and overall ultra-accommodative message

• Whilst still on Europe, he also does a preview on the pivotal EU meeting tmr that should be all about the feasibility of the 750bn euros of Covid-relief [most which literally comes years later] & ‘stealth’ step towards a fiscal union.

EUCO Preview: See you next month!

• KVP has been on the media front today & may as well re-iterate the top of mind thoughts that he shared with them. Again, some things are worth re-flagging & singing the anthem over, time & time again…. A lot of people hear, but they don’t listen, a lot of people trade/invest, but they don't make money consistently over-time... 

• Excerpt from the bloomberg radio team interview this AM Asia, with hats off to the gracious hosts Doug Krizner & Juliette Saly  

Top of Mind…

• Actually unlike most times in global markets & the world economy, there is a lot of certainty in the world that investors & traders are just ignoring - there is literally +100% certainty that we are going to see continued accommodation & loose policies from the FED, the ECB, as well as the US & EZ governments. This is literally something one can stake one's own life on, i.e. that is the level of conviction. 

• Liquidity is driving this rally up… if you think its fundamentals… then we can agree to disagree.

• Remember when Abenomics (really Kurodanomics) took flight in late 2012, the Nikkei went up 150% in c. 3yrs… point here is… monetary policy & especially fiscal policy tend to be very much underestimated & can run for a lot longer than can be expected. 

• Forget inflation… you are focusing on the wrong thing… think from the perspective of the balance sheets of the central banks & governments (Fed + ECB, US + EZ), they NEED to keep structural real rates negative… due to not just the explosion of debt in the system, yet the continuing debt that is still to come... as the low vol global macro fund AVM's finest Ashvin Murthy (+10% in the first 5m of the year) says, "fiscal policy, likely does not stop until we finally get to infrastructure spending." 

• Covid-19 numbers globally just not important anymore for the market imho, the probability for another coordinated global shutdown is almost 0 percent

• In fact, two things that can insure that US equity markets (& general US asset class appreciation) continue to soar are:
  
  (A) 2nd wave breakouts &
  
  (B) Trump tearing up the phase one deal - layer cake of upside for him, as a potential re-election strategy

• We are in a regime where bad news = bullish price actions, because bad news = accommodative MP & FP = asset prices going up…

• And yes, in a global system of inequality… the Fed & other central bankers who practice the dark arts of QE infinity are only accelerating the divide between the classes in society… a lot of the social stability we are seeing in the US & globally (& will see for a while!) are products of this…

-

Start-End = Gratitude + Integrity + Vision. Create Luck. Process > Outcome. Sizing > Idea.


Namaste,

KVP