Hello traders,
Hope you all had a great long weekend and some time off screens.
Last week we had a bumper jobs report to which the President had some words to say:
Oh wait, not that, but this banger did needed to be shared as well. No notes.
Employers added 162,000 jobs in August, and the unemployment rate held steady at 4.1 percent. But wage growth is not keeping up with rising inflation.
This has made everyone look towards the Fed if they will or will not increase rates, current projections are saying 60/40 towards a 25bps rate hike.
The biggest risk in this financial system is the 10Y treasury yield.
US Treasury will do everything it takes to lower the yields below the “Peace Deal Sounds Amazing Actually” line through buybacks and other related measures.
Thesis for bears here would be Iran escalation causing Crude oil spike which pushes inflation higher and then it causes 10Y to spike and puts downward pressure on equities.
Key takeaway if you have ADHD or cannot read due to learning disability caused by excessive social media and phone use.
”We are bullish risk at the moment; but eventually the long term yields problem will spill onto equities with crude oil being the wildcard which can ignite the fire(ha! got both oil spill and fire in the line)
Slightly longer term outlook below
Our outlook towards technology ex-semis is not as bullish as we would want to be. However the Shovel and on-device-inference basket
is something I would be inclined to be doubling and tripling down on as and when the market affords us a discount on the intrinsic value and would like to layer in tranches in the primary on device inference companies. As Warren Buffett once said “Real G’s move in silence like lasagna” or maybe it was Lil Wayne it was one of those two.
Gold
Gold at 4400-4300 is an extremely attractive asymmetrical bet targeting new all time highs. Personally would want to wait until FOMC presser to initiate a position.
A slightly more convex bet on Gold would be being long Barrick Mining Corp, world’s largest Gold mining company. Entry near 50-52 CDN would be ideal targeting 80-90 CDN.
Crypto
Our Zcash trade idea from last year has paid off massively for those who held onto the position ($166—>$1200). I would love to reenter Monero at 410-440 area and Zcash at 750-800 area. These are super volatile cryptocurrencies so anything above 100-200bps is not something anyone who is optimizing their resting heart rate should go for.
