Weekly Update: Continued steady returns into Trump week!
Dear all,
It has been an incredibly choppy week, which we have thankfully navigated well. We have squared the delta in our Nasdaq shorts ahead of a week that is likely to see a relatively large move in either direction, positioning us to capitalize on the outcome, both up- and down.
The current backdrop appears positive, as Trump has chosen a path of extreme risk-taking by launching his own cryptocurrency. However, we are not here to take reckless risks in such an environment and will continue to pursue a steady return profile as we gain more clarity on the macro trajectory.
I believe it is worthwhile to cut through the noise from the Trump administration and focus on the fact that the business cycle is showing signs of rapid acceleration, as evidenced by both surveys and our real-time observations of the economy. This is why I anticipate the current environment will resemble 2021 more than 2017, meaning inflation, growth, and liquidity will rise simultaneously.
Our nowcasting models confirm this outlook, indicating an increasing probability that growth, liquidity, and inflation will rise in tandem. This makes inflation-sensitive assets attractive positions for the immediate period ahead, particularly in the Commodity and Equity spaces.
We are on track to deliver a very strong performance this month and will remain vigilant to any changes in our models and Trump’s policies to maximize returns in the coming weeks.
Regards from,
Andreas Steno
Chief Investment Officer, Asgard-Steno Global Macro