Welcome to the last Friday Musings for 2020. I have done multiple 2021 Outlook presentations over the past two weeks (attached) - here is what speaks to me.

Speed, Covid’s signature, is breaking out beyond health. The speed of the Covid response - global money, human ingenuity and technology coming together to create a vaccine in 1/10th of the normal timeframe - is going to be replicated in regards to climate and other big issues.

I am a big believer in post Covid life looking a lot like pre Covid…. Death of the Office is Dead Wrong for ex. Asia, 1st in, 1st out, suggests this is likely to be the case especially when one looks at China.

One thing that is NOT going back to pre Covid conditions: speed of change. It's like driving in a 55 mph zone and then a 65 mph one - we have shifted to a faster pace of innovation & disruption. Speed of market reaction (public & private) has also changed. Think TSLA instead of FAANGS or ICLN instead of ESGU.

Regime shifts are occurring across societies and markets. Health policy leads, followed by a melding of fiscal with monetary policy (Fed no rate hikes till 2023 provides runway). Across the Tri Polar World, climate has joined the policy top table: net zero commits by China and Japan in Asia, Europe’s Next Gen linkage of JFR & Green Deal and the incoming Biden Admin placing climate at the center of its economic policy.

Policy driven markets provide scope for thematic led investment decisions executed via ETFs - the perfect vehicle for asset allocation.

My 3 phrases for 2021: A “Global Economic BOOM” will set off a “Great Rotation” across assets, regions, countries, thematics, sectors, styles & factors that inspires a “Golden Age for Asset Allocation”.

Besides the normal stock - bond - commodity - alternative portfolio allocations, I suggest one needs to think about how one is allocated thematically, to wit: clean energy, EV, gaming, cyber, fintech, genomics, ecommerce, crypto… to name a few. Do you have exposure to these themes - do you have ENOUGH exposure?

Use pullbacks to ensure one is positioned properly.

What do you think? Does this resonate? Peering into the near future is always a challenge. Reach out if you are interested - I am looking at some model portfolios to help think through these issues.

It's been a wild year - lots to contemplate over the holidays - enjoy the downtime bc change is coming…FAST. Change is coming here at TPWIM as well - will update in the new year.

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Yesterday was a pretty interesting day on two levels: one, commodity related equities (ILF, GSG, XLE, AMLP, PICK) rose sharply while Bonds rallied (AGG, TLT); two, the IPO frenzy continued with Airbnb following Doordash into the stratosphere while Blackrock announced it was recommending a tactical equity overweight.

In the first instance someone will clearly be proven wrong (my bet is the bond market) while in the second both can be right over time but when everyone seems to be on the same (bullish) page a player as big as Blackrock just going OW now suggests there is a lot more where that came from. JPM agrees & forsees $1T in equity inflow/demand in 2021.

So much big picture stuff to cover - we are in policy driven markets: health policy rules, fiscal policy follows and monetary policy comes in third as we were reminded with yesterday’s ECB decision which elicited a few yawns in Europe and not even that here.

Policy driven markets means politicians are players and so here’s a political process primer: endless bickering on the same topics until someone screams Uncle and the deal is done, to wit: Brexit and fisheries… really? Or business liability protection in return for state and local aid in US stimulus talks - this has been the clog in the drain for months… it's amazing really. I discuss this and more on Bloomberg Radio .

Well as one learns in the high mountains, the strategy is to keep putting one foot in front of the other - in other words to keep going. Europe has done just that in agreeing to a huge $2.2T budget/JRF package while strengthening its Green Deal. It took all night but it got done. It's a HUGE deal that sets Europe up policy wise for the coming 3-5-7 years & emboldens us to repeat our view that Europe has (an ever better) chance to win the 2020s.

Oh and just in case anyone was wondering which is more important - it only left 10 minutes for EU leaders to discuss Brexit. For all but the UK, Brexit is a side issue - if there is no deal this weekend and a sell off results - I have two words for you: buy it.

Europe is the epitome of the Tri Polar World’s (TPW) one foot forward region as it seeks to become the world’s normative power (rule setter for those who don't have a poli sci degree). Asia is TPW’s consumption region: China’s DCS, the RCEP deal, a strong RMB serving as the lodestar of a regional currency bloc - as in Europe, it's all starting to take shape as China TSF expands 13% y/y while X soar 21% y/y & S Korea’s early Dec X rise 12% Y/Y on an adjusted basis. Asia leads the global economy - 1st in, 1st out.

Here in “post truth” America one wonders what the TPW case is for the Americas? In an America First age that was an easy question to answer even if you didn't like the answer. Now it's up to Joe Biden - in a way it's nothing but upside though 4 years of partisan gridlock would really set the US and Americas back relative to Asia and Europe.

Here’s a crazy idea - how about the US helping its neighbors in Latin America with the vaccine rollout? Build goodwill, let folks know the US “is back”, turn the page on the socialist rant and start to think strategically.

On the plus side the Fed did report that US household net worth (HNW) hit another record in Q3 helped by surging house and stock prices, good news for those who own one or both. It took only two quarters to recover from the Covid collapse while it took nearly 5 years for HNW to recover post GFC. We are climbing a different mountain.

Two other things that struck me this week: the lack of market reaction to the UK’s start of the global vaccination process & the brushoff markets gave to the news that the US was suing Facebook on antitrust grounds. Maybe it's fatigue, maybe it's the rush into YE, even in Covid Age, maybe it's those rocking IPOs but I gotta think the market is missing the big picture in both.

Successful vaccination processes will literally change the world - no way it's priced in. Second, there are two bipartisan issues in Washington DC today: anti China and anti tech. Tech, FANG tech anyway, is already facing the “kryptonite” of vaccines and rising rates ( someday soon); our tech focus is on Innovation & Disruption not Domination.

Hey, if you missed yesterday's 2021 Outlook webinar don't worry - it's all here , including how the Global Economic BOOM sets off the Great Rotation & unlocks a “Golden Age” for asset allocation. I come on around min 25 but the EMQQ part is also worth a listen - especially the valuation comparison between EM tech & FANG tech.

Here’s to hoping I can go to the gym on Monday and then to my Italian place for lunch indoors!

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G20 meets this weekend - remember the G20? No, well don't worry - you don't have to because it's irrelevant in the Tri Polar World unfolding before our eyes. Asia forms the world’s largest FTA, Europe integrates through its Green Deal & Joint Recovery Fund while the Americas sit back and sink into dysfunction.

It's a simple question; Is Mr. Market right to look through US political dysfunction and failure to pass stimulus or is it not? It clearly has been right to date, with the SPY up 4% over the past one month though the big action has been offshore with ACWX up almost 8% led by Europe and Japan. One should use these coming weeks to come up with one’s answer & get right sized for 2021.

BofA reports US credit card spending through Nov 14th up 6% y/y, suggesting Mr. Market is right on the stimulus Q. A strong stock market does tend to limit political spending appetites, no matter the need. A spending bill required by Dec 11th to avert a Govt shutdown is likely to create some movement though the White House actions of late suggests there is no bottom to the dysfunction level.

US political dysfunction is epic in the true sense of the word, as in never seen before as the President displays the full depth of his narcissism; the failure to initiate the transition, during the worst pandemic in 100 years, is deeply worrying & depressing.

How 77% of Republicans can say that Biden won by fraud - in an election certified as the most secure in modern history and one in which further microscopic review has turned up no evidence of fraud whatsoever- suggests America has a very deep problem with facts and truth.

The average state vote recount over the last 20 years averaged just over 400 votes changed; the largest # of changed votes was 2300… as was just verified in Georgia, recounts will not change the outcome of the election, suggesting Mr. Market is right here as well.

Perhaps most importantly, the vaccine news keeps getting better - back to back vaccine Mondays - 1st US in-home rapid Covid test approval, while Pfizer’s EUA application suggests folks could start being vaccinated before YE.

The Rotation Trade is well underway but the tug a war between back to back vaccine Mondays and the daily case count surge helps modulate the move and in doing so protects against a blow off top & supports a risk on move that can extend far longer than many think.

Yes sentiment is extended and yes some areas of the global equity market are overbought in the near term but that's ok. Flows into risk assets have been robust but keep in mind the old MMM, Money Market Mountain, now stands at well over $4T with a T.

Similarly, Tech’s slow relative turn lower reflects its LT dominance, betting against US equity/tech has been a decade long widow maker trade. This too is very supportive of a longer and healthier sectoral & geographic rotation that leads to a broader and more sustainable risk asset advance.

Speaking of tech, one interesting question is how ESG handles the Rotation? Early days of course but a quick look shows ESGU (main US ESG ETF) peaking vs IUSV (US Value) back at the beginning of Sept, at the same time XLK (Tech) peaked vs IUSV. Something to keep an eye on. There are lots of clean energy opportunities - ask anyone who owns NIO, BLNK, ICLN etc.

Good news in Europe - case counts have peaked and are slowly rolling over as lockdowns have the desired impact. JPM notes that the recent up move in EU Small/Mid Cap stocks has plenty of room to go - highlighting a 300+ stock screen with the average stock down over 40% from 52 week high even after a 20% gain the past few weeks.

That's a good reminder that the Growth/Value, Tech - FIn, Cyclical/Defensive spreads have gotten so extended that there is lots of room for further relative outperformance through YE and 2021. Do not get off the good ship Rotation too early!

As we consider 2021 some surveys have drawn interest; an MSCI poll reports strong majorities expect US equity and Tech to sharply outperform in the year ahead - I’ll take the other side of that. BofA’s well regarded FMS reports the #1 2021 trade is long EM equity, followed by long US equity - no mention of EAFE in the top 5 favorite trades - opportunity knocks!

Let's finish with a couple of cross asset points: a Brexit deal could come next week - watch the USD; DXY has bounced off the 92 level repeatedly over the past few months while hedge funds net long gold position is at a 17 month low. On the Fixed Income side the steady rise in China’s 10 yr Govt bond, now yielding 3.3%, could be the lead dog for the UST market - we have highlighted since the Spring the 1st in, 1st out, follow the leader nature of Covid… does it work for rates too? Time will tell, as it does all things.

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Happy Friday the 13th! Spooky, spooky, like the quant quake on Monday’s Pfizer vaccine news that catalyzed a Growth /Value factor reversal so extreme it should virtually never happen. But it did - like I said, spooky.

And now, just days later, the surging US Covid 19 case count coupled with an immobilized Trump Admin (immobilized other than chasing victory ghosts through the courts) have folks questioning the sustainability of the Rotation Trade kicked off by the vaccine news.

Keep calm and carry on. After several months of sideways action, equity markets have made up their minds and are going higher, appreciably higher in the months and quarters ahead. We are in a new bull market as we suggested in May.

The Rotation Trade: sector, factor, asset and geographic wise is not a 2-3 day flash in the pan. No, it is most likely the beginning of a multi year move that will cement a Value resurgence, non US equity leadership and a bear market in long duration DM Govt debt.

As we have pointed out since the Spring, the US is 3rd in the Covid line; we can see what Asia does and Europe too. Asia of course has conquered the virus and is reaping the benefit via global equity mkt leadership & a return to pretty full normalization (take a look if you are wondering what Q3 2021 will look like in the US and EU).

Europe is back in lockdown but real time mobility data suggests the lockdown is nowhere near as negative for the economy as it was last Spring. Data suggests the EU supply chain is running at 94% of capacity as borders stay open, factories and building sites too. German truck mileage (good fit with IP) is running at February levels. Finally cases are rolling over in a number of countries (Belgium, Holland, Ireland etc).

What this juxtaposition between an ever closer vaccination process and rising cases does provide is another bite at the Rotation apple. After all, do you really want to buy an instrument up 10, 15, 20% in a week with an RSI over 80? No, you do not and neither do I. So when things sell off a bit and oversold conditions get worked off then one wants to be building positions as we discussed here (TV) and here (Radio) on Bloomberg Monday night.

BofA has called “the secular low in UST bond yields” and we agree. Breaking through the .95% technical level on the 10 year and pushing 1.75% on the 30 year heralds a significant change in asset allocation in the years ahead.

Did someone say inflation? No, no one did but folks will in the coming quarters - data points of the day: single family house rents rose an average of 3.8% across 60+ US markets in Sept while the biggest single family home rental company raised its October asking rents 7.5%, the 5th increase in a row and most since 2014.

As one starts to think about 2021 one of the key Qs is how high will rates go? Bloomberg 10 yr UST YE 21 consensus is roughly 1.3%. I think it will be between 1.5-1.75% and don't expect the Fed to play YCC until it threatens 2% given the Fed’s desire for inflation.

Rising rates are important not only in terms of % allocation to bonds, hedging vehicle choice etc but also for what rising rates means for the mega cap growth stocks that have led US equities higher and now make up anywhere from 30-40%+ of the S&P.

Duration risk has risen considerably as rates have fallen; rising rates are “kryptonite” for big tech which is also firmly in the cross hairs of regulators across the Tri Polar World (TPW), from DC to Brussels and on to Shanghai.

Speaking of the TPW, one must note this weekend’s signing of Asia’s RCEP, which will be the world’s largest FTA, encompassing roughly 30% of both global GDP and population. Big W for China which will increasingly set Asian trading norms and expand Asian regional integration, linking Chinese production & SE Asian consumption. Where is the US in this epic effort one might ask? No where must be the sad reply.

Another key 2021 Question: will Growth crash or will Value rise to meet Growth? I think Value will rise to meet Growth which will be a relative underperformer in the coming quarters and years. Thus one wants to think about equal weighted rather than cap weighted index exposure ( SPY most top heavy in 45 yrs) & one wants to be overweight the non US markets rather than the US, which has been the only game in town for a decade.

One new area to consider, Latin America… long out of favor, but with a cyclical bias and perhaps most interestingly very undervalued FX. An old MS buddy, a real FX expert, did the #s recently and reported for example that Brazil’s Real is close to 50% undervalued on his work. 50% undervalued - now that covers a multitude of sins.

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Clarity cometh but it comes slow. The Blue Wave I expected failed to materialize but it didn't matter as investors were happy to trade diminished stimulus sizing for less risk of higher taxes. Expect a Biden Presidency with the Senate up in the air until January & the runoffs for the two Georgia Senate seats.The amount of pre election litigation was substantial and cleared away the likelihood of difference making post election litigation.

I covered this ground and more with Real Vision’s Ed Harrison yesterday: growing clarity across the Big 3: elections, stimulus and vaccines, the Rotation Trade, both sectoral and geographic, the onset of a bear market in long duration Sov debt and the growing appeal of deep cyclicals/oil as we approach 2021 and a global economic boom.

We also went in depth on two new thoughts regarding the Tri Polar World (TPW) thesis: the growing outlines of regional FX blocs across Asia (RMB) Europe ( Euro) and Americas (USD) as well as the role each region will play in the coming decade - hint the America's role is least clear.

What a week - from Peak Uncertainty to the most oversold US equity market on Election day since 1904 to the best voter turnout in over 100 years to the best 4 day advance for US equity since 1982.

The ROW participated too: Europe’s banks rocked while China’s RMB rose to a 2.5 yr high vs the USD & Japan’s NIkkei index closed at its highest level since 1991. Japan’s equity market is the quietest global leader in a while - up 9% in USD over the past 3 months - better than S&P, better than EM and yet no one talks about it.

Global equity leadership is quietly shifting to Asia whose success reflects its 1st in, 1st out of Covid appeal. We noted this with our Covid investing formula months ago: control virus > reopen widely > broad stock market advance > outperform. We continue to overweight Asian equity including Japan and East Asia/China.

Post election the focus shifts to US fiscal stimulus which remains a when not if question - sooner is better and there is a chance for stimulus to be tied to a new Govt spending bill that must be agreed upon by Dec 11th.

Speaking of stimulus, did anyone notice there was a Fed meeting this week? Lack of Fed focus speaks volumes about the new policy dog in town - fiscal has the lead and the leash.

NOTE: the timeline to stimulus clarity may be superseded by vaccine clarity. As every day passes we come closer to the conclusion of phase 3 trials and learning about the efficacy of vaccines. We expect such by year end if not by month end and expect financial assets to react strongly to positive or negative news.

We are about to shift from Covid speed of science to speed of delivery; we remain constructive on the potential for rapid and successful vaccine distribution, given that the most well oiled part of the global economy is the logistics and transportation segment.

Speaking of oil we have been struck by two opportunities in recent weeks: the stabilization of deep cyclicals like the airlines (even with surging case #s) versus the broad equity market and the mispricing of the oil markets should a vaccine or stimulus become apparent in coming weeks/months. Risk reward in airlines and oil seems quite compelling with SPY only points away from a new ATH.

As such that is where we have been adding to our exposure: across both equity and fixed income oil-related investments. Energy now represents only 2% of the S&P while XLE just had its lowest monthly close in 16 years. If we are correct in our view of a global economic boom in 2021 then there is no way oil trades under $40pb.

On the boom watch two data points caught the eye this week: US and Chinese service PMIs. The global production rebound is well known, though underpriced by risk assets; the service side is where one needs to focus. Best US Service PMI# in over 5 years, 2nd best Chinese Services PMI in a decade! Europe lags but expect 2nd lockdowns to have much less of a negative effect on the EU economy than the 1st round.

Add in record liquidity, continued stimulus, vaccines and we are setting up for strong 2021 global growth and the Rotation Trade both sectoral and geographic.

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On BTV yesterday morning (at 16min mark), I suggested Wednesday’s no place to hide market action might have represented peak uncertainty across the Big 3 issues of US elections, fiscal stimulus, and vaccine outlook. In addition, while positioning is light & hedging heavy, Big Tech is for sale and the rotation trade requires clarity. It could have been worse and fun fact, 91 years ago Wednesday, it was worse, far worse … for that was the original OG 1929 Black Monday which ushered in the Great Depression… don't you feel better already?

There is a reasonable possibility that we get a Wednesday type move but to the upside next week as we get clarity around the election outcome and, through that prism, on the size & timing of US fiscal stimulus. Clarity on the vaccine front should materialize in the coming weeks as well; I remain optimistic on the speed of science and the capacity of global logistics to get doses to where they need to go in the coming months & quarters.

Here are my expectations: I continue to expect a Biden Blue Wave with results by Nov 4th if not the night of the 3rd (MS sees 35% odds of the 3rd). A steady polling lead that has expanded in the past few weeks, no 3rd party to split the vote as in 2016, very few undecideds (5% vs 15% at this point 4 yrs ago), and a Covid surge that should dampen Republican turnout on Election Day support this POV as do the polls, betting markets and stock baskets.

A Blue Wave would lead to stimulus akin to the already approved House bill for roughly $2.2T and would represent the start of what I expect could be a surprisingly active and progressive Biden admin. Don’t expect Biden to be a caretaker (check out Norm Ornstein’s piece on the 1st 100 days of a possible Biden Admin). A Trump win & Republican Senate would suggest a smaller stimulus sized around the WH $1.5T proposal. A Biden win and a Republican Senate would result in gridlock, be extremely problematic for the US place in the world and near term lead to a small stimulus - think Senate leader McConnell's $500B program.

Expect to hear about Phase 3 vaccine trial results by both Pfizer and Moderna in the coming weeks; China has several Phase 3 trials underway which should report at roughly the same time. All are already producing their vaccine candidates so the ability to get 40-100 M doses distributed in the coming months and billions of doses in the coming year is V feasible (Pfizer itself expects roughly 40 M by YE and over 1B doses in 2021).

The ex Asia inability to control Covid could lead one to think rollout and vaccine distribution will be sub par - that might be too negative as the private sector is much more involved, there has been time to plan and the global logistics business is one of the most forward thinking and aggressive segments of the global economy. We have long highlighted Covid speed and now focus on the shift from speed of science to speed of delivery.

Clarity on the Big 3, coupled with record global liquidity, continued fiscal and monetary policy support & China & US consumption growth underpin our view that 2021 will be an economic growth boom year that will catalyze the global Rotation Trade (both sectoral and geographical) and capsize the great Bond Bull market. Rising rates & vaccine = Tech “kryptonite”.

Our first in Covid, first out focus and our Covid investing formula ( control virus > reopen economy > broader stock market > outperformance) continue to work V well. Asia has far outperformed on its Covid response, its economic recovery and its financial asset performance & is breaking out vs the S&P. Ant FInancial’s Shanghai/HK based, record IPO, suggests a new boss in town.

Europe has been the portfolio problem child of late - we think current levels represent a great entry point; stocks O/S, banks are back to levels of a month ago ( European Banks a “Screaming Buy") even though Q3 results were better than expected and there is a growing sense of some dividend relief this year. Partial lockdowns of limited duration to save Christmas are not the same as full lockdowns of the Spring but EU stocks are back to late Spring levels. Deaths, hospitalizations, mobility indicators are all much better than Spring levels as well.

Levels are important in such markets: ACWI, ACWX, SPY all above 200d supports, if we are wrong 3150 is an important support for S&P. We remain positioned for the Rotation Trade: OW equity, focus on Cyclical/Value, SC in US, OW non US DM for cyclical exposure in Japan and Europe. OW East Asia and China in EM. Very UW long duration Sov debt, OW Credit incl US HY, EM $ debt, Pref, adding to RE. OW Commodities across metals both precious and base, miners, clean energy and building a position in oil. If 2021 is a boom year Brent will most definitely not be trading at $36 pb.

Enjoy this Youtube interview hosted Thursday by Roberto Attuch of Omninvest, an independent research platform in Brazil - a country near and dear to my heart. It's full length (hour) & I expand on all of the above plus more.

A cold NYC rain is falling & winter is coming, but so is clarity - I’ll take that trade.

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Rotation Trade Investors might not need Claritin but could sure use clarity… on the Big 3 of fiscal stimulus, US electoral outcomes, and Covid vaccines. Absence of such = wishy-washy trading. We expect such clarity in the coming 3-6 weeks & note only 12 trading days until the US elections...use weakness to add to risk assets.

Austerity - it's so 1990s… even the IMF now says Govts should spend more money; the problem is fiscal policy requires political compromise and that is lacking (on both sides of the Atlantic).

DC fiscal follies continue; the key point is that fiscal stimulus is a when not if question. Blue Wave = big fiscal, Biden Presidency with Republican Senate = much less fiscal (note Senate Republicans already in obstruction mode with their own President), Trump re-election & Democratic House = medium stimulus given Senate Rep.

There will be stimulus; there will also be US elections and an outcome, soon. Early voting is up 500% vs 2016 & favors Democrats. Expect an Election Night outcome (latest next day) as a Biden landslide remains the most likely outcome (Predictit 58% Blue Wave). Florida remains key as does Senate control. The authoritative Cook Political Report this week declared Democrats to be “the clear favorite to flip control of the Senate”.

Speed bumps pocketed the vaccine highway as several trials announced voluntary and completely normal pauses, resulting in some risk asset indigestion. Regardless, both Pfizer & Moderna’s Phase 3 trial results are expected in the next month or so. That’s Covid speed of science.

Rising case counts, especially in Europe, remain a worry, with European equity selling off as Covid control measures dampen the re-opening trade. Note however that EU hospitalizations and death rates are down sharply from Spring levels (WHO reports death rates 5x lower) and real-time mobility data is nowhere near as negative as the headlines.

Yet it's clear that Europe, with its cyclical equity bias, needs clarity on the vaccine & perhaps US stimulus, to move appreciably higher. Could European equity turn out to be the biggest beneficiary of a US Blue Wave? Keep in mind that vaccine/rising rates = Tech “kryptonite”.

Tech btw, is also struggling to get above its early Sept highs (QQQs), and with regulators on both sides of the Atlantic looking to slow the tech train down, it's one more wrinkle in the Tech forever story. US Regulatory pressure is likely regardless of who wins in November.

Technical action remains important in range trading markets. This week’s lack of equity follow thru on the back of the best week for stocks in three months (breadth thrusts, 15% of SPY hit new 52 week highs Friday) clarifies that a vaccine or stimulus will be needed to further jumpstart what has been a stealth Rotation Trade.

Said Rotation Trade pressed up against some limits recently and was rejected. Rates remain the fulcrum of the Rotation Trade and the Financials/Tech split. The breakdown in long-dated UST (TLT) was arrested at 200d support while the breakout of US Financials (XLF) was halted, though not reversed after good results were poorly received. Liked yesterday’s action though.

In Europe, BUND yields have gone further negative while broad stocks broke below support. 2 points: US banks have ROE of 15-17% and sell at barely 1xBV, EU bank equity trades much worse than bank debt.

Bottom Line: we remain of the view that 2021 will be a global economic BOOM year (10/2 Musings) supported by robust fiscal stimulus, record global liquidity, and underpinned by a global health outlook bolstered by therapeutics and vaccine(s). Both US (housing boom) and China (DCS strategy) should drive an inflation scare as consumption demand outpaces supply.

As such risk asset weakness should be bought. Risk reward is attractive given the degree of hedging in place which limits the downside coupled with forthcoming clarity on the big 3 issues.

Areas of equity focus remain: US Cyclicals/Value, SC, non-US DM equity, EU banks, East Asian Tech stack, China. In FI, we continue to favor: US HY (IG exposed to rising rates given duration drift & skinny coupon), US Preferreds, EM USD debt. Fun fact: $31T in DM Sov debt offers negative real yields, incl 95% of UST bonds vs 17% of EM Sov. Commodities remain attractive including both precious and base metals/miners, clean energy & oil on weakness.

PS. Several folks have asked about last weekend’s trip to the Mtns...well, we survived the climb but almost got flooded out by a nighttime T storm - the vagaries of the markets have nothing on that of the mountains! TGIF indeed.

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