June 2024 Market Strategy
The latest CPI print has eased some inflation fears, but investors remain confused. As we're waiting for a new consensus to form, risk-on is still the best bet. There is optimism, but no exuberance.
Disclaimer: The information contained in this article is not and should not be construed as investment advice. This is my investing journey and I simply share what I do and why I do that for educational and entertainment purposes.
Before we dive in: One thing you may not know about me is that I love to run. I cover about 100km/week, 60km of which is commuting with my kids to their daycare/school. For me, running is freedom and the best way to embrace the environment I live in. It directs my thoughts to good places. Sometimes I draft entire articles in my head while I run. Other times I phone family or friends to catch up. If you’d like to connect with me and discuss my work or markets in general, let me know, for example by simply responding to this email. I would love to give you a call when I run. A question you may have can become a new article. Has happened before. ;)
As a recap, in my May 2024 Market Strategy article, I wrote that horrendous recent inflation prints have made investors abandon the long duration landing trade. It has triggered a larger asset rotation that is still ongoing with uncertain outcome. As a result, sentiment and positioning data are fuzzy. Inflation and fiscal spending data will determine the formation of a new consensus.
How as this picture evolved since then? Let’s look at investor sentiment and positioning, CPI data, monetary policy and fiscal flows as of May 2024.