Well the Trump bond slaughter has not been good to the portfolio. However, the strong dollar and the rapidly falling oil price are both powerful deflationary forces. Dr. Copper spiked, but was rapidly crushed today. Foreclosure filings increased 27% MoM in October, the largest increase since the run-up to the last property crisis. All of this bodes well that, once the powers that be feel that they have achieved their goal of getting the unwashed out of bonds and into equities in time for the real slaughter, happy days will be here again. In which light, it is amazing to see that the Russell 2000, an index with an undefined PE – due to aggregate lack of positive E – is the stellar performer. This smacks of a massive degree of (emotional?) retail participation in the Trump stock rally.
So I’m sitting tight.
BTW, my target for oil is $15-20, EUR is $0.80-0.85 and CAD $0.60-0.65.