Crossbridge Capital

Independent, tailored, cross-asset investment solutions for entrepreneurs and families. Global Macro and economics comments.

[Citywealth @Citywealth]

Top 10 wealth management trends with Manish Singh, CIO, @CrossbridgeView .

Read more: https://t.co/4qHTVajPyo

#Citywealth #privatewealth #privateclient #PrivateWealth #wealthmanagement #Finance

[Crossbridge Capital @CrossbridgeView]

#ETF roundtable: Managing strategic change and tactical concerns with ETFs
https://t.co/0iZQAl86X7

[Crossbridge Capital @CrossbridgeView]

US yield curve keeps bear-steepening
2s/10y spread now at -16bps

That’s 100bps better than the lows,
as Powell has given 'green light' to "higher for longer"…
10y UST now near +5%

just under 2y ago Powell said "we are not even thinking about thinking about raising rates"

[Crossbridge Capital @CrossbridgeView]

$TLT is still drawing in $$ despite the draw down

However, the new money coming into TLT could be ones that get the bond math/convexity

from here on, if rates

fall by 50bps, the 20y+ UST could rally over +12%,

rise by 50bps, the loss would be ~2%
[not an investment advice]

[Crossbridge Capital @CrossbridgeView]

+35% p.a. return over 1977-80

[Crossbridge Capital @CrossbridgeView]

Headline inflation rose marginally.

Will we see a second wave of inflation as was the case in 1970s ?

Highly unlikely
However, if "inflation is re-accelerates", should one sell equities ?

Let's look at the evidence from 1970s
Equities rose as inflation rose (chart below)

[Crossbridge Capital @CrossbridgeView]

Some in the media are suggesting that we are witnessing the “The Great fall of China"… Crossbridge Capital CIO Manish Singh, CFA disagrees…read more in this month’s Market Viewpoints
https://t.co/rMRkJicV5W

[Crossbridge Capital @CrossbridgeView]

Buffett vs Ackman

*BUFFETT: WE BOUGHT $10B IN TREASURIES THIS MONDAY, LAST MONDAY
*ACKMAN: WE ARE SHORT IN SIZE THE 30-YEAR TREASURYS

Who’s right ?

Both could be right. Trade is about time frame

Ackman could be right in the short term, Buffett in the long term

[Crossbridge Capital @CrossbridgeView]

TLT US (iShares 20+ Year Treasury Bond ETF) is still down -45%
Again technically a double bottom and a good signal to go long if you have a medium to long term holding period.
#USTreasury

[Crossbridge Capital @CrossbridgeView]

US 10Y yields have risen once again and getting close to cycle high of 4.33%

technically the UST 10Y is a buy given the elevated level and cycle highs it's at.
However, don't expect quick gains.
US economy is still strong and impact of high rates is yet to be felt measurably.

[Crossbridge Capital @CrossbridgeView]

96% probability of a 0.25% rate hike by the #FOMC at its meeting this week

Is it justified ? No
Can the FOMC still hike ? yes (as they have even as inflation continues to fall)

*GERMANY JULY MANUFACTURING PMI 38.8; F'CAST 41
*EURO-AREA JULY MANUFACTURING PMI 42.7; F'CAST 43.5

[Crossbridge Capital @CrossbridgeView]

with China CPI added

[Crossbridge Capital @CrossbridgeView]

Most important chart to focus on
#CHINA PPI and #US CPI

China PPI is at -5.4% YoY, negative for nine consecutive month and lowest in 7 years.

Inflation was covid-19 supply issues driven. It's behind us.
Disinflation ahead for the US (and others)
#Disinflation

[Crossbridge Capital @CrossbridgeView]

#ADP #PrivatePayrolls
June private payrolls jumped to 497k vs. 225K est. and 267k the prior month.
Biggest gain since Feb. 2022; leisure and hospitality added most jobs
BUT
Is it a "June thing" ? We saw it last summer too.

[Crossbridge Capital @CrossbridgeView]

Japan core inflation ( CPI ex CPI ex Fresh Food and energy) +4.3% yoy, a 42-year high.

JPY weakness, upside for NKY to continue
#Japan #inflation #NKY

[Crossbridge Capital @CrossbridgeView]

Since the Fed’s rate hiking cycle began back in March 2022

- the S&P is now up +3.4% on a total return basis,
- QQQ is up +9%, and the Tech sector is up +16.4%

Over 5% rates hike at historically fastest rate and still this ?
We're at peak rate.

#FOMC #Fed #ratehike

[Crossbridge Capital @CrossbridgeView]

ISM Manufacturing in contraction ( at 46.9),and
ISM Services on the verge of contraction (at 50.3)

The US Federal Reserve has lost any flimsy excuse it may have had to keep raising rates.
Pause now and pivot soon.
#FOMC #FederalReserve

[Crossbridge Capital @CrossbridgeView]

S&P 500 Index in a “Bull Market”; US Federal Reserve set to pause

Read the June newsletter
https://t.co/JGEVMOZEeH

[Crossbridge Capital @CrossbridgeView]

#Gold
with inflation expectations falling, gold seems to have run its race this cycle.
Gold however is the best "insurance". It has stood the test of time and will stand the test of time if things really get rocky.

[Crossbridge Capital @CrossbridgeView]

US #nonfarm payroll is clearly decelerating

However, it's not a bad number for the overall health of the economy

Non-Farm Payrolls: +253K (Est. 180K)
Unemployment rate: 3.4% (Est. 3.6%)
Average hourly earnings month-on-month: +0.5% (Est. +0.3%)