Fragments

House sales are up a lot.

Some FAANG type stocks are beginning to crumble,

• $NFLX Netflix fell nearly 10% as user growth and profits disappointed
• $SNAP Snap rose over 40% as ad revenue grew over 50% and brands resume advertising spending
• $TSLA Tesla ended down on the week. The company maintained guidance to produce 500,000+ vehicles in 2020
• $INTC Intel shares fell more than 10% as data sales missed expectations

• Unhedged user @EnergyCredit1 published a comprehensive, data-rich report on renewable energy production by state, here. The distribution of renewable generation has a bias towards Republican states.

• Michael Platt of Bluecrest seems to know what he’s doing,

• Late breaking news about 747 safety (deliberately released to minimize coverage?)
• Moats Like Kodak is an interesting blog.

More and more articles are being written mentioning the threat of inflation, especially in the USA.

What asset when?

There are many tradable assets, all are affected by major macro developments. It’s difficult enough to come to a settled view of the macro outlook. To make money it’s essential to translate that view into a position. The major asset classes are FX, fixed income, credit, commodities and equities. These all tend to be priced in currency, especially USD, so a view on the dollar is, in some sense, implicit in taking a ‘cash’ position in any. This is why, even though the US current account looks terrible, the dollar has held up well this year. Market participants crave liquidity, especially dollars, at times of stress, so they can re-enter the market when the stress is lifted (“risk off” becomes “risk on”). This noise can swamp trend moves in the dollar. In the same way, a rush into “safe assets” such as US Treasuries can swamp the negative implications of huge budget deficits.

I suspect that successful trading is mainly about spotting the change in market psychology that indicates the point (“inflection point”) when the balance of participants are more worried about bullish factors than bearish factors (or vice versa). My feeling is that we must be close when the consensus is that the dollar is over valued, and inflation is becoming a problem. We’re not there yet, and there seems to be a lot of slack in most economies, but my feeling is that it will be hard to put the spare capacity to work to produce stuff that people want to consume. I don’t know, but that’s my view today. If you don’t like it, don’t worry, I’ll have a different one tomorrow. Maybe.

Miners

I think that precious metals miners might be interesting, if things get rough with the FAANGs. You can see a selection here on unhedged. Enjoy, but this is not in any sense a recommendation.