Housekeeping: Good morning. Hartnett’s Weekly report is presented 3 ways: 1) Video walk-through with light comments 2) Hartnett’s main points broken out below, 3) and original format at bottom. Enjoy. 1
Main Flow Show Points:
Powell cut was to rescue small biz and prevent them from too many layoffs; no other reason makes sense to him. Hence the title.
Wall Street loves panic cuts when there’s no panic
Good chance inflation will mutate from Wall street to main street
Buy Bonds (for recession risk) and Bullion (for later stage inflation risk) on dips now
Topics covered: Fed Cuts and what to do, 50bps cuts in different situations. He likes risk-on commodities and EM stocks now.
Some Takeaways:
Tbe bond/bullion barbell trade to hedge recession/inflation is interesting.
We (FWIW) are not confident in Bonds on this one unless full blown recession and/or no more cuts.
kind of hate bonds now since they did not rally on the rate cut, and see them as getting ready to discount bigger inflation down the road given the capitulation to inflation this week. But admittedly that remains to be seen.
Dips in bullion ; what?
Hartnett’s companion GFMS report mentioned is here
Michael did also say “Sell the first rate cut” multiple times before…
Hartnett Flow Show: 50 for the Little Guy
Wall St loves “panic cuts” when [there’s] no panic
—Michael Hartnett
Scores on the Doors: gold 25.0%, crypto 17.3%, stocks 17.3%, HY bonds 8.3%, IG bonds 5.4%, cash 3.9%, commodities 2.6%, govt bonds 2.1%, oil 0.5%, US$ -0.7% YTD.
