Welcome to the Upside Down

Growth, Inflation, Fed Cuts Are Not What We Think, Positioning & Sentiment, + the Best Thing I Have Read This Month

I wanted to start by thanking everyone for the kind comments and feedback on Wednesday’s IPO note. It’s gratifying to bring relevant experience to bear on a market technical that many may be missing, particularly given the current juncture we find ourselves.

Beyond my typical skepticism, this weekend I find myself intensely, acutely concerned for equities in the coming weeks. My focus remains on the risk of assets repricing toward stagflation rather than the current run-it-hot cyclical debasement consensus. My long-held view is that economic growth would begin to see weakness late summer (now becoming evident in the data) while inflation would inflect higher (and no tariffs are not a transitory problem driving this view but one of several factors coming together to unhinge expectations). An update on both is in order, and I will bring things together with a series of charts that have grabbed my attention over the past two weeks.

I also strongly recommend you read the note at the end which I found to be the best thing I have come across in terms of thoughtful, well-researched commentary on AI/tech equities and the current bubble (yes, a bubble) — it was a simply must read.

• Growth to Weaken From Here

• Inflation is Coming

• Fed Cuts Are Not What We Think — read this.

• Positioning & Sentiment

• Read of the Month — definitely read this!

Here we go…