ndx

We are long the equity market... I like equities... orient it a bit more towards the equity market where the earnings growth is explosive. Cites powerful tech earnings (e.g., semis up 97%), extraordinary technicals (buybacks > IPOs), and a productivity revolution favoring big caps.

yields

My sense is that 10-year note will drift lower over the, you know, through this year. Expects Fed cuts, sees initiatives (Fed balance sheet, fiscal) to contain long-end rates and stimulate housing.

yields

it does probably mean that we have steeper yield curve for the foreseeable future. The reasoning is based on persistently high deficits (6-7% of GDP), increased spending (defense, potential stimulus), and large refunds (~$160B), with no political will to fix the problem. This points to higher long-term yields.

yields

We just don't see a big directional interest rate trade. The focus is on harvesting income from high nominal yields, not betting on rate direction.

wti

The price of crude oil goes up $3 a day, not every day $3, but averages rising about $3 a day until we get some kind of a movement of opening the ships If Iran deal fails and stalemate continues, oil shipments remain blocked, creating supply constraint that drives prices higher daily until resolution.

yields

I would still argue that in that type of world that interest rates are probably going to go higher just to hit their fair value, maybe closer to 5% Persistent 3%+ inflation environment with elevated risk premiums requires higher interest rates to reach fair value. Fed may need to hike rather than cut given nominal GDP growth outlook.

wti

It's kind of inevitable that's where we're going to end up... it's reasonable when you look at those long dated futures going out to December of this year to see lower prices. Believes a deal will be struck to reopen the Strait of Hormuz, returning oil flows to a post-war equilibrium, which futures markets are already pricing.

wti

If there is one more month of closure in Hormuz, oil price will go back to $100 per barrel. And effectively every extra month of closure is an extra $15-$20.

wti

So the price is going to have to go up and it's going to have to stay up... I think we're probably gonna have to see much higher prices Arithmetic of global oil shortage (~13M bpd) necessitates a sharp price increase to ration demand. $100+ may not be enough if the supply disruption is protracted.

yields

I do think you're going to see inflation expectations kick in in interest rates and they're going to move higher. Based on thesis that a protracted Middle East risk premium will be inflationary, increasing nominal GDP. Current yield rise is from real yields; inflation expectations will follow if situation persists.

wti

Base case for oil prices in the fourth quarter is about $20 higher than before the war Analyst provides specific price forecast with Q4 WTI in mid-70s vs pre-war below $60, citing inventory hits and security premium needs.

metals

nudged our base case outlook down from north of 6,000 to the high 5,000s, that's still 20% upside from here Gold as diversifier for structural risks; factors accelerating; maintains bullish target despite recent pullback.

wti

move to a higher average of call it $80 a barrel over the next three to six months Assumes de-escalation, sees $80 as higher average but still benign—implies rangebound around that level, not a sharp move.

metals

Gold... will prove to be a good asset to hold in a world where we see geopolistics is not going away... We still think there's a structural story to mean the gold will appreciate over the next 12 months. Gold seen as hedge against persistent geopolitics and deficit spending; currently down 10% from peaks.

wti

if you see oil at around $8,000, $800,000, level... we think that the global economy will still grow... The risks scenario to us... is that you see oil move more than $140 per bowel Base case assumes oil in $80-$100 range supporting growth; risk scenario >$140 leads to recession.

yields

Curve steepening more likely to play out... longer-term curve steepening is a potential consequence when it comes back to repricing, not just inflation. Deficit concerns may re-emerge; prefers 3-6 year maturities due to front-end opportunity and longer-term steepening risks.

ndx

directional equity convictions are neutral now for U.S. equities Neutral stance on directional US equities while focusing on thematic opportunities.

wti

Even ourselves with a hundred dollar oil... you're going to write to a hundred and hang you out there. The analysis is conducted with $100 oil as the baseline, indicating it is the current/persistent price. The discussion of demand destruction at $120-$150 suggests the current move up has already occurred and is sustained, not necessarily forecasting a further sharp near-term rise from current levels.

ndx

Bullish on AI as most exciting technology in decades, prefers equity financing to participate in upside. Notes significant sidelined cash in equity markets causing rallies despite bad news, and his firm has built cash to deploy later. Overall positioning is temporarily defensive but looking to buy on the other side of current stress.

yields

"I don't think the Fed's gonna hike... I think they're gonna cut rates." "I think the Fed needs to cut interest rates now." "I think the equilibrium funds rate is closer to 3%. I think you need to get there..." "that premium should come out and we should lower that rate." Argues high rates are ineffective against supply-shock inflation and disproportionately harm vulnerable groups and government debt burden, while big tech capex is less sensitive. Advocates for Fed to use balance sheet to stabilize long end of curve.

dxy

We are still leaning more towards fading the dollar strength eventually... I'm not sure that [the dollar as a stagflation hedge] will be the case this time around. Argues that unlike 2022, all central banks are fighting inflation now, reducing the Fed's unique credibility advantage. While the dollar has benefited from energy independence, the view is to eventually fade its strength.

metals

Gold has sold off a lot as well... some of that investor positioning is unwinding. Attributes recent gold weakness to a strong dollar and investor positioning unwinding to raise liquidity. Sees it as a tactical move, potentially an opportunity for longer-term investors, but the near-term direction discussed is down.

wti

Our team is now expecting something in the low 80s on Brent. He cites a supply shock from the conflict causing disruption, leading to 'lasting damage' and a higher settled price. He explicitly upgrades the team's forecast.

wti

We now expect a somewhat higher oil price of Brent $80 by year end. Due to damage from Hormuz supply shock and structural factors (faster SPR builds, security premium).

metals

We looked at trimming back that gold hedge. Anytime your hedge rallies about 100% you've got to think about defining that hedge a little bit more.

ndx

Overweight US equities recommendation, positive view on AI-driven productivity boom (1990s parallel), and structural advantages of the US economy all imply a positive outlook for US growth stocks represented by NDX.

wti

Acknowledges near-term spike ('first month contracts almost doubled') but argues the market sees it as temporary ('12 month is only up 10 to 15 dollars'). This implies a short-term rise but not a sustained bull market.

yields

Our belief for now is that you'll probably going to get another two cuts this year... We expect him to at least try and deliver one rate cut before the midterm elections. The call for rate cuts is based on addressing a slow-growth job market and the view that AI will be disinflationary (1990s parallel). The Fed has room to cut as the economy does fine at 3% inflation.

wti

the price of oil might go to $130 or $150 in that very adverse scenario Scenarios based on length of Strait of Hormuz disruption: 21 days -> $110, 30 days -> $130, 60 days -> $150.

wti

The oil market is bifurcated... The middle east crude oil that goes to Asia is now trading at $16070... oil that goes to the United States is still trading around $95... it's never been $80 like we've seen now. Describes a structurally fractured market with extreme regional price disparities ($95-$170), indicating severe supply disruption and upward price pressure. Argues a 10-million-barrel deficit must be resolved by prices rising until demand is destroyed.

yields

we're going to get more inflation than we're going to get a reduction in growth... nominal GDP's going to go up. And that means that the appropriate response for interest rates to go higher... central banks might be to hike rates. Thesis is that oil-driven inflation will outpace growth slowdown, raising nominal GDP, which mechanically requires higher interest rates. Explicitly rules out cuts as a mistake.

ndx

Equities still look rich relative to where they could go in a genuine shock where the Fed is not able to cut interest rates. Valuations are too high for an environment of persistent inflation and constrained central bank response.

wti

We could get $125, $130 a barrel oil very easily if this continues to unfold in a scale that is measured in months, not weeks as it was originally intended. The market mispriced the conflict as short-term; the nature is a persistent supply shock.

metals

wti

Longer disruption will cause financial prices to embed more risk and go higher. The paper market is under-pricing the duration risk from infrastructure damage. Escalation increases the probability of a prolonged event.

dxy

You're seeing it in the rally in the dollar Flight to safety/quality is driving dollar strength

ndx

You're also seeing it in the recent out performance of tech Investors returning to tech due to long-term structural fundamentals, earnings growth, and upgrades

wti

expectations for energy prices are to recover and be back around $80 in the not-too-distant future

wti

if we are still in the same place in May, looking into a third quarter, I've already mentioned we could see spikes 160 or as a barrel, if things keep going we can see Brent breaking 200 gs of barrel The Strait of Hormuz closure lacks viable rerouting alternatives, creating immediate supply disruption risks. Without resolution in weeks, the situation becomes 'very, very complicated for oil prices,' with potential for dramatic spikes as recession risks escalate.

yields

The moves have been probably the most dramatic in the rates market... US rates have risen a lot... there is this inflation fear... a geopolitical driven oil price spike. Attributed recent rise to inflation fears from oil and deleveraging flows. Did not specify 'sharp up' or a 'medium' term direction. View is about recent price action and near-term Fed hold.

wti

Market has already been assuming we're going to get like the kind of 90s plus number until into June, right? So then declining to December. That's already a couple of months. The shock is driving prices higher temporarily, with market curve pricing $90+ until June before declining. This represents an upward move from current 70s-80s levels to 90s, but the interviewee emphasizes it's temporary (weeks/couple of months) rather than sustained.

yields

The rates market is viewing this simply as an inflation shock globally... global rates have risen. Describes current market pricing driven by oil price shock. Her own view is that this rise is a short-term shock and that Fed cuts will eventually cap yields.

wti

Retail gasoline prices are already up 20% versus when the episode in Ukraine started. Energy price shock is already impacting prices, suggesting upward pressure on oil prices in the near term.

wti

price of oil doesn't go much higher Gasoline prices already up 20 cents in 2 days, potential for more oil infrastructure damage from geopolitical events

yields

bonds could sell off some more Inflationary pressure from energy prices, Fed concerned about rising PCE, potential for further oil price increases