2021_11_29 — THEME: Politics — Countries, Currencies, Inflation, and Games
November 29, 2021
Michael’s CIO (Check It Out) Report on the week just past — events, sarcasm, and global macro reflections
THEME: Politics — countries, currencies, inflation, and games
- Oh My Time: B.1.1.529, the Omicron variant, a new COVID virus strain first detected in South Africa was announced! It has a spike protein dramatically different to the original variant on which vaccines are based. Stock prices declined on fears of vaccine ineffectiveness, new restrictions, shutdowns, and political reactions that may slow or reverse societal growth, further complicate supply chains, and keep people guessing on commodity demand as well as a return to some sort of normal. Japan, Morocco, and Israel have closed borders and other countries have restricted travelers from southern Africa. Early reports hint that Omicron may be a contagious but mild strain — possibly the large number of mutations (30 changes, 3 deletions, and 1 insertion) make it less powerful, but it will take weeks to determine this
- Turkey weak: A weak and declining Turkish lira experienced a -15% one day drop last week as President Erdoğan pressures Turkish interest rates lower. The lira has lost half its value over the last 12 months. Opposition leaders say Turkey faces economic catastrophe — Note that Turkey has 83.4MM people, the world’s 20th-largest economy nominally and 11th-largest based on purchasing power parity — or at least it did at the beginning of the year😳
- Barbados will end its imperial ties to Britain nearly four centuries after the first English ship arrived at the Caribbean island and break with Queen Elizabeth as titular head of state, but will remain within the 54 countries of the Commonwealth — independence celebrations will include a visit by Prince Charles
- AfterHours: Social Democrat party leader Magdalena Andersson resigned hours after becoming Sweden’s first female prime minister following the defeat of her new budget. A deal with Nooshi Dadogostar, leader of the Left Party, to back her in a parliamentary confirmation vote did not sit well with the Center Party nor the Green Party
- Olaf Scholz forged a three-party (traffic light) coalition deal to succeed Angela Merkel as the next German chancellor — we’ll see if the alignment holds
- House of Gucci: Italian Prime Minister Mario Draghi and French President Emmanuel Macron signed the Quirinale Treaty to strengthen bilateral economic ties and military coordination — coincidental that this happens just as Germany changes its roster?🤔
- Drop in the Bucket: U.S., China, India, U.K., Japan, and South Korea announced a coordinated oil reserve release — 🃏this desperate show-your-hand poker move seemed to raise oil prices
- A Quarter for Your Thoughts: You know inflation is real when Dollar Tree announces that it will raise item prices from $1.00 to $1.25 — the stock was up on the “break the buck” news because the move will allow DLTR to expand product assortment and reintroduce items that had been priced out of the $1 limit
- High$: The U.S. Dollar reached one-year high against general international currencies, a one-year high versus the Euro and Swedish krona, at one-year and 4-year highs versus the Japanese Yen, and close to one-year highs versus the Swiss franc — but near two year lows versus the Chinese Renminbi which incidentally has contributed to higher U.S. inflation because a more expensive Renminbi means that imported Chinese goods are also more expensive!😤 — This seems to be an under-reported contributor to inflation🤐
- D-List: China “asked” Chinese ride hailing company Didi to delist from the New York Stock Exchange over data security concerns; it just listed this June! — 📚Maybe Michael Lewis will eventually write an expose about what really happened behind the scenes there and at Alibaba?
- Extra: Russia continues its military buildup along Ukrainian border; Chile’s leftist presidential candidate leads the conservative candidate in polls ahead of second round elections; Italy’s Draghi vetoed the third Chinese takeover of an Italian business this year; Hondurans have elected their first female president
- DARTs: The 1979 video game Asteroids made a surprising comeback as NASA launched🚀a spacecraft to deflect an asteroid — a separate satellite released from the craft will act as a selfie stick to film the “double asteroid redirection test”😉
- Game of Homes 2🛡🗡Following up from three weeks ago on my 9 reasons for home prices to be supported, Starwood agreed to pay +$1B for 2,300 single family suburban homes to rent — 🏡Overall, more than $30B of capital (not including debt) has been invested in institutionally owned rental homes since 2020
- Cube Queen: Fortnite Chapter 2 (the online video game) will have its “The End” event on December 4 and Chapter 3 will begin a couple days later — this will be huge🎮
- Blinded by the Lights: After 90 weeks on its Hot 100 chart, The Weeknd’s “Blinding Lights” single dethroned Chubby Checkers 1960s hit “The Twist” as the all-time number 1 song on the Billboard single charts — Manfred Mann’s Earth Band and Springsteen, you were so close!
Best wishes for the week ahead😃,
Michael
~~~
Michael Ashley Schulman, CFA
Partner / Chief Investment Officer
“We deliver bespoke investment solutions, innovations, and unique perspectives to you and your family.”
#stockmarket #assetmanagement #assetallocation #investing #investmentmanagement #capitalmarkets #investments #investment #wealthmanagement #riskmanagement #portfoliomanagement #economy #finance #money #economics #familyoffices #macroeconomics #hedgefunds #privateequity #business #trading #management #interestrates #venturecapital #analytics #research #consultants #technology #business #sustainability #volatility #fixedincome #bonds #interestrates #privateequity #venturecapital #PE #VC #RE #AI #illiquid #commodities #crypto #cryptocurrency #bitcoin #blockchain #defi #ethereum #covid19 #financialplanning #globaltrade #supplychain #china #investment #familyoffice #UHNWI #wealthmanagment #weekinreview #globalmacro #economy #news #business #investing #yourfamilyofficehere #humor #privateequity #inflation #stocks #markets #equities #stockmarket #assetmanagement #assetallocation #investing #investmentmanagement #capitalmarkets #investments #riskmanagement #macroeconomics #privatecredit #privatedebt #munis #municipals #munibonds #municipalbonds #globaltrade #supplychain #china #investment #familyoffice #UHNWI #wealthmanagment #weekinreview #globalmacro #economy #news #business #investing #markets #yourfamilyofficehere #humor #privateequity #inflation #stocks #markets #equities #stockmarket #assetmanagement #assetallocation #investing #investmentmanagement #capitalmarkets #investments #riskmanagement #macroeconomics #privatecredit #privatedebt #tesla #EV #barbados #honduras #germany #sweden #turkey
Disclosure: The opinions expressed are those of Running Point Capital Advisors, LLC (Running Point) and are subject to change without notice. The opinions referenced are as of the date of publication, may be modified due to changes in the market or economic conditions, and may not necessarily come to pass. Forward-looking statements cannot be guaranteed. Running Point is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Running Point’s investment advisory services and fees can be found in its Form ADV Part 2, which is available upon request. RP-21–47
Originally published at https://www.linkedin.com.
