Good Wednesday evening MacroEdge Readers & Community,
This evening Six will provide an update to our Portfolio Strategy book, while adding commentary, and I will be publishing our Oil and Gas Research Strategy Note in about an hour over on MacroEdgeEnergy.substack.com/subscribe. It’s been a mostly uneventful Wednesday to this point, and tomorrow I will be out for much of the first half of the day as I head to the airport and get ready for a very packed second half of September and beyond. Stay tuned for some major updates over the next few weeks (many exciting things) & I look forward to seeing you all back tomorrow evening for the Midweek Macro Note. As to the remainder of the week - the Friday nonfarm report will determine the September hike, which is currently priced at about 60/40. As mentioned in the Weekly Macro Note, I really don’t think it will matter all that much either way what Warsh does - and bond vigilantes have a unique opportunity to spike the 10Y higher and take markets lower in what could shape up like a 1987-style event should it happen. The window for this is limited, however, because of the ever present fiscal hand in markets today, and left tails simply have to materialize out of black swan events…
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9/2 Portfolio Strategy Update & Commentary - @SixFinance
Another week in paradise, eh? Following Jackson Hole we have indeed seen the market reprice a hike into the market which has been closely followed by more US strikes on Iran. We are nearing a threshold where a growth scare could materialize, considering that housing and private construction remain depressed and interest rate increases being priced into the forward curve continues to accelerate. The Flagship model has mostly closed its tech exposure today (see positioning at end), and substantially increased exposure to the most asymmetric opportunity I am seeing in the market today.