Macro markets

This note is best read in conjunction with our thoughts on the Fed, from earlier this morning.

Our funds are moderately defensively positioned, predicted on the slightly lower than average equity risk premium on offer across equities, the “hawkish pivot”, unduly low real interest rates, the irrational exuberance of certain growth stocks, and so far things are working out well.

Equities are lower, but mostly within high valuation tech stocks / secular growth stocks, as exemplified by the drawdown in the Nasdaq or better yet in the Cathy Wood ARKK innovation fund, credit spreads are modestly higher (we view credit as unattractive) and real rates (TIPS) have repriced higher.


Copper is fractionally weaker, and oil is outperforming (the energy bet has been a key source of alpha to our diversified funds this past month, a span of time almost churlish to crow about, but still, it has moved in the right direction, and as of November 2020 was a profoundly non-consensus call).

Aussie 10 year bonds have moved back above 2%. We are happy to start nibbling away at our fixed income underweights above 2% (noting that we have quite a bit more Australian government bond medium dated exposure than we have international sovereigns in our fixed income allocations).

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This document is based on information available at the time of publishing, information which we believe is correct and any opinions, conclusions or forecasts are reasonably held or made as at the time of its compilation, but no warranty is made as to its accuracy, reliability or completeness. To the extent permitted by law, neither Aequitas nor any of its affiliates accept liability to any person for loss or damage arising from the use of the information herein.

Please note that past performance is not a reliable indicator of future performance.

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