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USD/CAD Tests 1.25 As Falling Crude Prices, Fed Meeting Weigh on Loonie

The Canadian dollar is modestly sliding against its US peer in the middle of the trading week, ostensibly hitting the pause button as one of the world’s top-performing currencies. The loonie is paring its gains mostly on falling energy prices,…

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The Canadian dollar is modestly sliding against its US peer in the middle of the trading week, ostensibly hitting the pause button as one of the world’s top-performing currencies. The loonie is paring its gains mostly on falling energy prices, as well as investors seeking shelter in conventional safe-haven assets, like the US dollar and the Swiss franc. But what about domestic data?

According to Statistics Canada, the annual inflation rate climbed 1.1% in February, up from 1% in January. But inflation reading came in below the market forecast of 1.3%. Still, this was the biggest rate in a year, led by rising gasoline, food, shelter, and health care prices.

On a monthly basis, the inflation rate jumped 0.5% last month, down from the 0.6% boost in January. Economists had projected a monthly increase of 0.7%. Also, the core inflation rate, which removes volatile food and energy, clocked in at 1.2% year-over-year in February.

Earlier this week, the statistics agency reported that producer prices recorded a substantial jump in February. The producer price index (PPI) advanced 2.5% last month, and the annualized PPI soared 6.9%.

Housing prices and retail sales data will close out the week.

Crude oil prices trended lower midweek. April West Texas Intermediate (WTI) crude oil futures tumbled $0.78, or 1.2%, to $64.01 per barrel. April natural gas futures slumped $0.046, or 1.77%, to $2.551 per million British thermal units (btu).

Since Canada maintains a current account deficit, exports are critical to growth in the national economy. Oil and gas remain the country’s top shipments to foreign markets, so any price change can affect the loonie and the broader economy.

Global financial markets are monitoring the Federal Reserve’s two-day Federal Open Market Committee (FOMC) policy meeting that finishes on Wednesday. It is widely expected that the US central bank will leave interest rates unchanged and that its aggressive quantitative easing program will be intact. But investors are waiting for guidance from the Eccles Building, which explains the quiet trade among the leading benchmark indexes.

The country’s bond market was mostly in the green on Wednesday, with the benchmark 10-year bond rose 0.052% to 1.62%. The one-year bill edged up 0.02% to 0.21%, while the 30-year bond advanced 0.032% to 2.065%.

The USD/CAD currency pair climbed 0.37% to 1.2492, from an opening of 1.2447, at 15:18 GMT on Wednesday. The EUR/CAD rose 0.38% to 1.4869, from an opening of 1.4817.


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Virginia’s New AG Fires Civil Rights Division, Will Start Prosecuting Cases Dropped By ‘Social Justice’ DAs

Virginia’s New AG Fires Civil Rights Division, Will Start Prosecuting Cases Dropped By ‘Social Justice’ DAs

Within hours of taking office,…

Virginia’s New AG Fires Civil Rights Division, Will Start Prosecuting Cases Dropped By ‘Social Justice’ DAs

Within hours of taking office, Virginia’s newly sworn-in Attorney General Jason Miyares (R) cleaned house – firing dozens of lawyers, including those in the Civil Rights division – and announcing investigations into the Virginia Parole Board and Loudon County Public Schools.

I’ve been told incoming AG @JasonMiyaresVA just FIRED the entire civil rights division in the Attorney General’s office,” tweeted VA State Senator Louise Lucas.

According to the Richmond Times-Dispatch, Miyares notified around 30 staff members they’re being let go – including 17 attorneys and 13 staff members. The attorneys include the solicitor general, Herring’s deputies, and reportedly Helen Hardiman – an assistant AG who worked on housing discrimination.

Miyares, who will take over Democratic AG Mark Herring, campaigned on a promise to pursue legislation that would enable state AGs to circumvent “social justice” attorneys who refuse to vigorously prosecute crimes. As Fox News noted in November, “Under current law, the AG’s office can prosecute a case on behalf of a commonwealth’s attorney – Virginia’s version of a district attorney (DA) – so long as the DA requests it.”

George Soros-backed commonwealth’s attorneys are not doing their jobs,” said Miyares in May 2021 comments to the Arlington County Republican Committee.

Liberal billionaire George Soros has repeatedly poured thousands into prosecutor’s races in Virginia. In 2019, Soros provided a significant cash infusion to three winning progressive candidates, Parisa Dehghani-Tafti in Arlington County (nearly $1 million from Soros); Buta Biberaj in Loudon County ($850,000 from Soros); and Steve Descano in Fairfax County ($600,000 from Soros). Soros spent about $200,000 in a prosecutor’s race in Norfolk this year. His candidate went on to win the race. -Fox News

When reached for comment, Miyares spokesperson Victoria LaCivita said: “During the campaign, it was made clear that now Attorney General-elect Miyares and Attorney General Herring have very different visions for the office,” adding “We are restructuring the office, as every incoming AG has done in the past.”

In a Saturday statement just houtrs after Miyares and GOP Gov. Glenn Younkin were sworn in, he explained why he launched the investigations into the parole board and the school district.

“One of the reasons Virginians get so fed up with government is the lack of transparency – and that’s a big issue here,” he wrote. “The Virginia Parole Board broke the law when they let out murders, rapists, and cop killers early on their sentences without notifying the victims. Loudoun Country Public Schools covered up a sexual assault on school grounds for political gain, leading to an additional assault of a young girl.”

Loudoun County became a focal point in Youngkin’s gubernatorial race against former Virginia Gov. Terry McAuliffe following the arrest of a 14-year-old male high school student, who identifies as nonbinary, who has been found guilty of raping a female student in a school bathroom. That student was transferred to another school where he allegedly raped another student and the district has been accused of covering up the crime which resulted in one of the alleged victim’s parents being arrested at a school board meeting. The offending student has been placed on the sex offenders registry for life as part of his sentence. –Fox News

Meanwhile, within hours of his inauguration, Governor Glenn Youngkin signed 11 executive actions – including lifting the mask mandate in Virginia schools, and “ending divisive concepts, including critical race theory, in public education.”

As Terri Wu via the Epoch Times reports:

He also signed an executive directive rescinding the vaccine mandate for all state employees.

The 55-year-old former business executive, in his inauguration speech at Richmond, emphasized a “common path forward” with “our deep and abiding respect for individual freedom.” Youngkin vowed to strengthen and renew the “spirit of Virginia” associated with the history of the state as the home of American democracy. He credited Virginians with the spirit of tenacity, grit, and resilience.

Youngkin said he was “ready to lead and serve, starting on day one,” and it would start in the classroom to get Virginia’s children “career and college ready.” The crowd of an estimated size of 6,000 burst into a loud cheer upon hearing from Youngkin that he would “remove politics from the classroom.”

“Virginia is open for business,” Youngkin promised to create 400,000 new jobs and 10,000 new startups in the four years of his administration by reducing regulations and increasing job-related training.

According to him, residents of the commonwealth will see the “largest tax rebate in Virginia’s history.” In addition, he promised to “fully fund” and “return respect to” law enforcement.

‘Hope’ and ‘Optimism’

Voters echoed the sentiment of “hope” and “optimism” highlighted in Youngkin’s speech.

“I’m excited because we have somebody in here who’s willing to fight like we do, just on a higher level,” said Shirley Green, a public relations specialist, while waiting to join the inauguration ceremony. Improving the school system was the first step she wanted the new administration to take. And she was “optimistic” that the Youngkin administration would deliver their campaign promise because of their “humility” and “passion for Virginians.”

Green grew up as a Democrat in the District of Columbia metropolitan area but became a conservative 13 years ago. She said she had found the Democratic Party having a different vision than “working for the people.”

Shirley Green at the public entrance to the Capitol Square in Richmond, Va., on Jan. 15, 2022. (Terri Wu/The Epoch Times)

“I feel great. It’s a great day for Virginia,” said Joe. He and his wife attended the inauguration ceremony in “Youngkin vests,” the same style of fleece vests Youngkin often wore on his campaign trail. The couple owns a local safety business and prefers not to disclose their names. The previous Virginia administration “didn’t always take in consideration of the people” in its decision-making, said the wife.

“Education is the number one concern,” she said, adding that parents among their employees and employees at their client organizations—Republicans, independents, and Democrats—voted for Youngkin “because of their concerns for their families.”

Aiden Sheahan and Alyson Bucker with the University of Virginia were among a group of five college students and graduates who also attended the ceremony. They made phone calls and door-to-door visits for the Youngkin campaign. Sheahan said he saw “a lot of optimism” during the campaign; people had hopes that many things, including jobs, the standard of living, and policies, would change with the new governor.

The group described the new Lieutenant Governor Winsome Sears, a black American who immigrated from Jamaica, as “confident” and “powerful.”

“She doesn’t use her skin color, her circumstances, or her identity to promote herself. She used her accomplishments, rather than something she cannot control, to promote herself,” added Matthew Carpenter, a recent college graduate from Longwood University in Farmville, Virginia.

Challenges from Day One

The former executive who campaigned as a political outsider will face challenges working with a state legislature with divided party control, and some priorities facing deadlocks.

The General Assembly session began on Jan. 12, with a newly empowered Republican majority (52–48) in the State House, and a Senate where Democrats still hold a 21–19 majority.

In the next 60 days, lawmakers will review and adopt a two-year state budget proposed by former Governor Ralph Northam on Dec. 16. Youngkin has already said “the recognition of the need for tax cuts is understated” in Northam’s plan.

The new Speaker of the House Todd Gilbert announced education, inflation, and public safety as Virginia House GOP’s agenda for 2022. By comparison, House Democrats’ “top priority is to protect the advances they made against Republican efforts to roll them back,” in three key areas: supporting public schools, keeping families healthy, and ensuring economic security for all.

With a Democrat-controlled House and Senate in the past two years, former Democratic Governor Northam signed into law in 2020 a series of liberal measures, including increased gun control, lifting abortion restrictions, and relaxed voter requirements.

“I think we have a Governor-elect who is going to come in and do something about some of our school problems, introduce our freedoms, and be more protective of law enforcement. And I think that gives us a lot of hope,” veteran Republican State Senator Steve Newman told ABC13 a day before the inauguration.

An inaugural parade followed the ceremony. On Sunday, the three-day events will close with an open house at the governor’s mansion. Along with Youngkin, Winsome Sears was sworn in on Saturday as the Lieutenant Governor and Jason Miyares as the Attorney General. Sears will hold the tie-breaking vote in the State Senate.

Tyler Durden
Sat, 01/15/2022 – 20:00

Author: Tyler Durden

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Economics

How Goldman Is Convincing Its Clients Not To Freak Out About Fed Rate Hikes

How Goldman Is Convincing Its Clients Not To Freak Out About Fed Rate Hikes

Rate hikes are now just right around the corner and traders are…

How Goldman Is Convincing Its Clients Not To Freak Out About Fed Rate Hikes

Rate hikes are now just right around the corner and traders are freaking out, but not so fast according to Goldman.

Following the FOMC meeting in mid-December, and especially last week’s FOMC minutes and the subsequent jawboning by various Fed officials,, it has become clear that the Fed will not only double the pace of tapering but also signaled three hikes in 2022. As a result, virtually all sell-side economists – even stern holdouts such as Morgan Stanley and Bank of America – have raised their forecast from three hikes in 2022 to four – with the first hike now expected to occur in March. Their forecast reflects the greater sense of urgency on behalf of FOMC participants towards quelling inflation, which rose to a four-decade high of 7% as measured by the latest year/year CPI. Why this urgency? Because as one can imagine, Biden was very clear in what Powell’s mandate was when he was renominated: “crush inflation as it is crushing my approval ratings”, because as BofA’s Michael Hartnett noted on Friday, “US inflation is up from 1.4% to 7.0%, while Biden’s approval rating is down from 56% to 42% past 12 months.”

But why is the Fed rushing to hike when a growing chorus of economists now agrees with us that the Fed is hiking right into a recession (or alternatively, hiking to create a recession) an observation that was validated by Friday’s dismal retail sales data… and even without validation, the endgame is clear: as David Rosenberg noted recently, every time the US has had 5%+ inflation, it ended in recession.

Well, according to Goldman’s David Kostin, the unprecedented strength of the labor market has made the Fed more sensitive to high inflation and less sensitive to slowing growth. Alongside rising inflation, the Fed has also cited strong employment data as a catalyst for earlier liftoff and balance sheet reduction. The unemployment rate now stands at 3.9%, falling slightly below the FOMC’s 4.0% median estimate of its long-term level (although looking ahead, Kostin notes that surveys of workers and businesses indicate wage growth is expected to slow to about 4% this year).

To be sure, the market already reflects this and real and nominal rates have both jumped in anticipation of the upcoming tightening cycle. Since the December FOMC meeting, the 10-year US Treasury yield has surged by 26 bp to 1.77%. Consistent with historical experience, equities have struggled amid this rapid rise in yields, and the fastest-growing and longest-duration pockets of the market – i.e., the biggest bubbles such as profiless tech names, the ARKK ETFs, SPACs and so on – have de-rated most.

As a quick aside, perhaps the main reason for the equity puke in the past two weeks is not so much the jump in absolute yield in the past month, but the speed of the move. As Goldman showed in a separate report earlier this week (also available to professional subs), regardless of the level of interest rates, equities react poorly to sharp changes in the interest rate environment, and the past week has been no exception: “Historically, equity prices have declined when interest rates rose by two standard deviations or more. This is true for both nominal and real interest rates across both weekly and monthly periods. The two standard deviation threshold was exceeded on both horizons last week, and the accompanying equity weakness followed the usual historical pattern.”

But while that may explain short-term moves, surely higher rates will lead to longer-term weakness no matter what. And while the answer is yes, the next table shows the sensitivity of the S&P 500 forward P/E multiple to various interest rate and ERP scenarios. Goldman’s interest rate strategists forecast a continued rise in real interest rates that will lift the nominal 10-year Treasury yield to 2% by year-end 2022 (more below), however they also expect the ERP to compress modestly from current levels as the pandemic recovery continues and economic policy uncertainty surrounding potential reconciliation legislation passes. In this base case scenario, the S&P 500 P/E multiple would remain roughly flat this year, allowing earnings growth to lift the index price level. But, if the ERP were to rise to its 10-year median and the Treasury yield rises to 2.25%, the P/E multiple would compress by roughly 15% to 17x, and not even Goldman can spin that as positive.

In any case, as Kostin writes in his latest Weekly Kickstart, market pricing and client conversations indicate investors are braced for a string of hikes in 2022, and as a result, questions from Goldman clients during the past two weeks “have focused on the relationship between equities and interest rates, indicating that the hawkish FOMC pivot is being actively assessed by equity investors.” Moreover, the overnight index swap (OIS) market is currently pricing 3.6 rate hikes in 2022 and 2.6 in 2023, just below the 4 and 3 hikes, respectively, that Goldman forecasts (spoiler alert: the total number of rate hikes will be far less once stocks crash).

And this is where Goldman enters the bullish spin cycle, because the bank makes much more money when its clients buy (only to sell in the future), than selling now. So to ease client concerns that the bottom is about to fall off the market, Kostin writes that “historically” (because clearly we have had many “historical examples” when the Fed’s balance sheet was 45% of US GDP), the S&P 500 index has been resilient around the start of Fed hiking cycles, noting that “although the index has returned -6% on average during the three months following the first hike of recent cycles, the weakness has been short-lived as returns average +5% during the six months following the first hike.” Moreover, as Goldman shows in exhibit 3, the S&P 500 P/E is typically flat during the 12 months around the first hike.

Drilling down into segments, Goldman notes that cyclical sectors and Value stocks outperform around the first Fed hike. The reason: the start of Fed hiking cycles (usually) tends to coincide with a strong economy, which can help to lift cyclical sectors (Materials, Industrials, Energy). However, this time around it is starting as the economy is rapidly slowing yet inflation remains stubborn due to supply-chain blockages, and as such anything Goldman suggests you should do, please ignore it.

Which is probably also true for factors. According to Kostin, at the factor level, Value stocks tend to outperform in the months before and after the first hike: “High quality factors (e.g., high margins, strong balance sheets) underperform in the strong economic environment preceding hikes and outperform in the months following the initial rate increase. Growth is the worst performing factor in the 6 months around the first hike.” Here too, we would flip this 180 degrees because the Fed is now hiking to effectively start a recession (or as the US is already en route to one), so what one should be selling is value while buying growth ahead of the next rate cuts/QE which are now just a matter of time.

Next, Kostin brings out the heavy artillery and urges his skittish clients to consider that “surprisingly” equities have historically performed well alongside rising expectations for Fed hikes. Here, the bank examines the six-month periods since 2004 when OIS pricing of the 5-year-ahead fed funds rate increased by 25 bps, excluding episodes when the Fed was cutting rates.

During these episodes, nominal 10Y yields typically rose by 52 bps with roughly even contributions from real yields and breakevens. Despite this, the S&P 500 returned 9% (vs. its unconditional 6-month average of 5%). Higher earnings expectations drove these rallies as increases in fed funds pricing usually coincided with improving expectations for economic growth. However, as we have repeatedly warned and as even Kostin concedes, “the current inflation-led hiking cycle may prove more challenging for equities.” We are not sure this will boost the confidence level of Goldman clients who are on the fence to just BTFD…

After the initial stage, when markets price more eventual rate hikes, cyclical sectors typically outperform while bond proxies lagged according to Goldman. Industrials, Consumer Discretionary, and Materials outperform the S&P 500 on average during these episodes, with financials especially sensitive to the long-term interest rate outlook and also outperforming. Meanwhile, bond proxy sectors such as Utilities and Consumer Staples underperformed sharply.

As noted above, value has typically outperformed alongside rising market expectations for Fed hiking, but only in cases when the the hiking cycle was led by growth expectations, not to crush inflation, so this time one can argue that everything will be flipped. And while traditionally, small-caps also outperformed, as “quality” factors underperformed, the recent weakness in small-caps confirms that this is anything but an ordinary rate hike cycle.

Curiously, even in his bullish pitch to clients, Kostin – perhaps hoping to preserve some credibility- admits that this is not a typical rate hike cycle, and the recent hawkish pivot has been driven not by “improving growth expectations but by inflation risks” yet even so Goldman’s economists expect growth to remain above-trend in 2022 because, of course, what else can they do: start sounding like Zero Hedge and admit that the Fed is hiking into a recession.

And indeed, Kostin admits that “fading expectations for fiscal stimulus and the hit from Omicron have led our economists to downgrade their growth outlook in recent weeks” however – perhaps unwilling to piss off Biden too much – they still forecast 3.4% GDP growth this year, a stepdown from the 5-6% pace in 2021 but still above their 1.75% estimate of trend growth. Translation: the US will be in a recession by the midterms, courtesy of the Fed.

So after all that, if Goldman clients aren’t running for the hills, maybe the will BTFD after all, and for them, Kostin writes that investors “should balance their exposures to Growth and Value” as Goldman’s rates strategists expect yields will continue to rise, a dynamic that should support Value over Growth, unless of course we enter stagflation at which point all is lost (incidentally, as noted last week, Goldman expects nominal 10-year yield to hit 2.0% by year-end 2022 (with real rates rising to -0.70% almost where they are now) and 2.3% by the end of 2023).

From a growth perspective, Goldman economists expect the waning of the Omicron wave to lift GDP growth from 2% in 1Q to 3% in 2Q, supporting Value stocks. But they expect growth will slow to a 2% pace by 4Q 2022, the type of environment that generally supports Growth stocks. Translation: yes, growth stocks are getting crushed now, but as soon as the current whisper of a recession/stagflation becomes a chorus, watch as “growth stocks” (i.e., the bubble/bitcoin baskets) explode higher and surpass their previous all-time highs.

In short, Goldman’s current recommended sector overweights reflect a barbell of Growth and Value:

  • Info Tech remains the bank’s long-standing overweight due to its secular growth and strong profit margins.
  • Financials should benefit from rising interest rates
  • Health Care combines secular growth qualities with a deep relative valuation discount.

Finally, from a thematic perspective, Goldman continues to recommend investors own highly profitable growth stocks relative to growth stocks with low or no profitability. To this, all we can add is that with low growth stocks having been absolutely nuked by now, the highest convexity when the recessionary turn comes, will be precisely in the no profitability growth sector, which will double in no time once the coming recession/easing cycle becomes the dominant narrative.

Tyler Durden
Sat, 01/15/2022 – 19:00







Author: Tyler Durden

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Economics

A Former SAC PM’s Advice To Traders: “Sit Tight, Be Right”

A Former SAC PM’s Advice To Traders: "Sit Tight, Be Right"

By Nicholas Colas, co-founder of DataTrek Research

Today’s story is about patience….

A Former SAC PM’s Advice To Traders: “Sit Tight, Be Right”

By Nicholas Colas, co-founder of DataTrek Research

Today’s story is about patience. Whether you are trading or investing, 2022 will require more calm thoughtfulness than any year in recent memory. History shows that as crises fade into the rearview mirror, market volatility (and the opportunities it brings) declines. Also, there is a real tug of war now between fundamentals and Fed policy. Lastly, the best places to make money in stocks (cyclicals, in our view) are volatile and rarely well-structured industries or companies. Bottom line: 2022 is a “measure twice, cut one” sort of year.

* * *

Strange as it may sound, I learned most of what I know today on this topic while working for Steve Cohen at the old SAC Capital. Yes, it was a (very) fast money trading shop. And yes, Steve’s trading process demanded absolute adherence to a specific set of rules and mindset. Price action, not opinion or emotion, defined right and wrong.

But SAC is also where I learned the old trader’s saying, “Sit tight, be right”. If your process is sound, from idea generation to risk management and exit discipline, then patience determines profitability. Simply put, big trades often take time to work.

Everyone at SAC had their own approach to cultivating patience, which in the context of the firm’s trading bent often meant simply distracting themselves rather than staring at their daily P&L. Steve might invite his family to lunch and actually take an hour off the desk with them if he was worried about being shaken out of a large position intraday. Other traders occupied their time by planning where to go for lunch or dinner (traders think about food a lot). As for me, I would spend hours on a forward calendar of catalysts that might offer new trading ideas (analysts think about data a lot).

Many years after leaving SAC, a hedge fund performance analytics firm showed me some research that put the importance of patience into even starker relief. Hedge funds, as a whole, are good at finding winning ideas. Their performance would often be better, however, if they held those ideas longer. Academic work on institutional investor (long only and hedge funds) behavior shows that the problem is structural. So much of money management marketing is pitching new ideas to gather assets that “old ideas” (those currently in the portfolio) get crowded out too early in order to take stakes in new names.

I bring all this up because 2022 feels very much like a year where patience will be the defining factor when it comes to outperformance. Whether you are bullish or bearish on a market, sector, investment theme or individual idea, it will take longer to get paid for your point of view than the last several years.

Three reasons I think that’s true:

1: US equity market volatility historically declines in the years after a shock. The chart below shows the CBOE VIX Index back to 1990. As highlighted, there have been 4 notable VIX spikes since then. In each case volatility declined for several (3-9) years thereafter. In March 2022 we will be 2 full years into the post-pandemic market recovery. Volatility has already been declining. The VIX today is only 20, for example, even with the selloff and January’s choppy action.

2: There are times when fundamentals (i.e., corporate earnings) matter and then there are times when changes in macro conditions matter more.

  • At the bottom in March 2020, macro mattered; fiscal and monetary policy supported the US economy during the Pandemic Crisis.
  • From Q2 2020 to Q4 2021, US corporate earnings took over the market narrative. The S&P 500 earned 23 percent more in 2021 than it had pre-pandemic. Wall Street analysts were slow to acknowledge that fact, which allowed for a long series of earnings beats.
  • We are now entering a period where the Federal Reserve will engage in a never-before-seen experiment: raising interest rates off zero and reducing the size of its balance sheet in the same year.

All this sets up 2022 as a tug of war between the relative certainty of strong corporate earnings and the absolute unknown effect of novel Fed policy. As we outlined earlier this week, the setup here reminds us a lot of 1994. Back then, the Fed embarked on a surprise series of aggressive rate hikes and investors simply had no idea what that would do to the US economy. Now, Fed communication may be better – they have telegraphed liftoff and runoff quite clearly – but the market is still left wondering what results will come from their decisions.

3: The sectors that have been working – and we still like – are not what one would call easy stories to love. Large cap Financials (+6 pct YTD) are cheap but face structural challenges from venture capital funded FinTech disruptors. Large cap Energy (+14 pct YTD) is an ESG nightmare, and you have to believe (as we do) that traditional carbon-based energy has several years of new demand highs ahead of it. Airlines (+7 pct YTD), which Jessica just highlighted earlier this week, are no one’s idea of a stable or well-structured industry.

As much as we like cyclical sectors, we know there will be sudden and violent rotations out of them through 2022. They have a tailwind but owning them in 2022 is not the same as holding Big Tech in 2020 – 2021. If nothing else, their competitive positions are not as strong. In trading parlance, you are “renting” these names rather than buying a forever home for capital.

Summing up: 2022 is set to bring us lower average US equity volatility, a see-saw dynamic between fundamentals and Fed policy, and rotation into cyclical (and often volatile) sectors with little to offer besides earnings leverage. It will be a year for patience and, just importantly, discipline. Sit tight, be right.

Tyler Durden
Sat, 01/15/2022 – 17:30





Author: Tyler Durden

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