Tag Archives: oil prices

global macro stock conflagration

Global Macro Guru: Simmering Stock Conflagration?

MarketsMuse Global Macro curators, like many across the hedge fund complex, have attempted to decipher an investment thesis that can prove itself without being hijacked by short-term volatility. Deflation, Inflation, Oil, the Dollar and bets being made in advance of the Fed’s widely-expected interest rate adjustment are talking point ingredients that are potentially leading to a stock conflagration–according to global macro guru Rareview Macro LLC.

In the firm’s a.m edition of “Sight Beyond Sight”-the top bullet point “Top 10 SPX stocks on Alert” evokes a view that may not be rare, but the underlying premise is certainly worth contemplating….Thanks to Rareview’s top gun, Neil Azous, below is the opening extract..

Deflationary Impulse Spreading Beyond Inflation Levered Plays…Top 10 SPX Stocks on Alert

  • Getting from A to B
  • Canada and Crude Oil
  • South Africa and Metals & Mining
  • The Top 10 Stocks in the S&P 500
neil azous
Neil Azous, Rareview Macro

To get on the front foot today, we hope that you have an appreciation for how acute the pain is around the world on account of the latest downward price adjustment in crude oil.

There is no question that the latest 10% move lower (and counting) in the barrel has led to an “acceleration point” in various asset prices, corporate decision making, and countries.

The trade-weighted US dollar is making new highs (JPMQUSD) and the CRB Commodity Index (CRY) is making new lows today. Asset prices across Asia are once again feeling the reverberations rippling out from the latest weakness in the Chinese yuan (CNY) as fear builds of another devaluation. This is once again shining the spotlight on emerging market currencies, especially the Mexican peso (MXN) where the weakness today is a result of it being the main source for liquidity for emerging market proxies.

In equities, the alarm on the carbon monoxide detector for the Top 10 stocks in the S&P 500 is now at risk of going off more than at any other point since the October recovery. Some are noticing the two main symptoms of that – a headache and stomach nausea – but can’t seem to smell anything because they live in a world of isolation and only care about something else when they are forced to. And some of the longs we speak to who are more mindful of the top-down backdrop are almost as nervous as a long-tailed cat in a room full of rocking chairs.

Given the degree of concentration or narrow breadth, does crude oil weakness ultimately matter to these stocks? We may be close to finding out the answer to that.

Rareview Macro updates its views, along with trade ideas in real time via Twitter. To read the entire edition of the Dec 8 edition of Rareview Macro’s “Sight Beyond Sight, please click here

Global Macro Trading: The Trend is Your Friend, Until It’s Not

MarketsMuse.com global macro trading snapshot is courtesy of excerpt from 7 April edition of macro strategy commentary from “Sight Beyond Sight”, a publication of Rareview Macro LLC and authored by 20-year industry expert, Neil Azous.

Neil Azous, Rareview Macro
Neil Azous, Rareview Macro

Over the past two trading days, three major trends that have been the backbone of asset markets over the past 9 to 15 months have come under attack. As highlighted in yesterday’s edition of Sight Beyond Sight, and despite our call for an immediate reaction lower in risk assets turning out to be wrong, we are now working under the assumption that a larger corrective event in key investment themes is underway.

To be clear, just because we are working under this assumption does not make us feel comfortable about going against the grain as trend-following pays better and is more scalable than counter-trend trading

The first, and most prominent, trend shock is the shift in the US dollar. The uptrend that has been in place for the last nine months is in jeopardy.

The second is the US Treasury curve.

The third is the downtrend in crude oil. Whether it is the trades of commodity exporters against importers, problems surrounding capital account deficit countries with large levels of commodity-dependent debt, or the shale oil-based capital expenditures decline in the United States, there are quite a few negative narratives linked to the decline in crude oil prices.

What we are now considering is this: If crude oil is able to sustain a rally or has finally “found a bottom” then what the consequences are of all of these release valves being opened at once?

To read the finer points of this morning’s edition of Rareview Macro LLC’s “Sight Beyond Sight” inclusive of a detailed distillation of the above talking points and a view of Rareview’s model portfolio, please visit this global macro strategy think tank’s website via this link