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# Thesis
# 2025 outlook
Goal might be to inflate away the sovereign debt issue with slightly higher inflation
Real GDP will get revised lower in coming months, as labor market deterioration accelerate, earnings decelerate and margin inflect lower (even deflation & recession)
# Alex notes
- Retail Investor net purchase of Equities - Retail all in
- GDP headed down & past quarter GDP should follow employeent adjustement with sharp revisions
- Quit Rates should continue deteriorating - JOLTS quit rate vs Rehire rate (proxy)
- Wages should continue decelerating - Atlanta FED median wage growth vs Indeed wage tracker (proxy)
- Chapter 11 insolvencies crossed key treshold
- Earnings are starting to get revised lower post Q2 but 2025 eps still as way to go
- Margin are peaking at lower levels than 2022 - disinflation gathering pace, should bottom in one yr (sept25)
- Non-farm employement diffusion index at the cusp of <50
- Full-time permanant employee index - Deterioration
# trade to work on
- BMBL Short
- MSOS Long
- GEO Long
- TRAK Long
- XLE Long
- CVE & VET Long: if 25 XLE year get rdy to scale in in size
- RKT Long
- BYND short
- XBI Long
- QFIN Short
# Macro & Themes
- Will fed pivot trigger another run up in inflation a la 1974-1982 - compare 74-76 to 22-24...
- Citi group economic surprise index in negative territory since may, will lead to 10y t-note trend down
- As corporate revenues get under pressure, volume & unit sales protection will superseede any other consideration (at top line) & margin protection will super seede at bottom line. Will lead to short period of defalation in goods and services. If labor weakness added to the mix people will pile into rates quickly.
- Energy for all data center they are building , who? where?
- EMification of usa markets - Japanification of the past is very different than today, today it is real negative rate & QE and covert debasement of currency like bresil market - stairs down, elevator up ... slow bleed , get inestor fustrated and out of nowhere it Rip up
- Commodities & platinum deficit
- China crushed, waiting after fed for stimulus - need to deal with its youth & unemployement
OCT 23 Rally started after Yellen QRA* issued 50B less bonds than the market expected topped at the start of april 24 with spy @ 525
5% correction in april with low @ 493, triggered by hot CPI and now 15 of may new ATH
' U.S. Treasury's decision to fund the U.S. deficit with shorter-duration bills rather than bonds.
Oct'22-now is a big bear market rally ?
16th July market topped after retail sales
Strength of Labor Market most important variable for 2024
former "safe heaven"
- dividend stock
- Utilities
- Staple
- Mag7 # want mag7 revenue to stop growing before shorting
Why ? because bond will take that place Why? ... ? equity risk premium ?
Is crypto the equivalent of the german stock market during weimar ? probably yes
4xQQQ but also kinda of a hedge against currency debasement
# GDP
Real private investment increased only 2.7 % over last 2 years which is below the GDP # meaning recent rate of GDP increases is unsubstainables - + laggin its pre covid trend
For last 7 Quarters Real governement purshases is growing at a faster rate than private consumption
the private economy—which is all that matters since it’s the only part that’s productive—is stalling out - more evident when looks at real fixed private investements
The federal debt increased almost $600 billion in Q1, in exchange for GDP increasing about $300 billion.
In other words, the federal government is “buying” only 53 cents of “growth” for every dollar it goes into debt
# PMI
Service PMI employement came in at 46.1 confirming a 5 month contraction that is intensifying & confirming Jan print was dead cat bounce
new one
#
Trump will be a deflationary president that will cause headwin to the us equity market need be in dividend stock bcs only thing will do well ?
Only thing on top of mind in terms of reason to sell, if the unemployement situation continues to deteriorate despite the FED easing of policy that would be pretty concerning - Citrini
Short companies with high margin, long companies with low margin -Citrini
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