Bad Sentiment, Good Opportunity [VIDEO]

Jordi Visser

down arrow

In the latest installment of Real-Time with Jordi Visser, Jordi highlights the major impact that gas prices have had on the broader market dynamics. Rising gas prices have helped drive higher CPI, faster Fed rate hikes, lower consumer and investor sentiment, and lower equity and credit markets. Now that gas is falling, will that change that feedback loop?

Key Takeaways:

  • Jordi shows that as of June 13th, we have seen gas prices declining, which could drive the year-over-year inflation down from its peak. Given the inverse relationship between gas prices and equities, a reversal could signal an equity turning point.
  • Through the measure of M2, Jordi distinguishes between the current period and the 1970s inflation regime. He also highlights demographics, exponential innovation, and the debt bubble are all different in the current period.
  • Jordi believes that small-cap equities will outperform large-cap equities during the second half of the year.
  • Finally, Jordi points to nominal GDP, which has stayed high despite slowing growth. With inflation coming down and top-line sales constant, earnings may hold in better than investors have feared into the end of the year.

About These Videos: Our market videos seek to provide a data-focused interpretation of the market's most critical developments. Real-Time with Jordi Visser is a recurring series produced by our President and CIO based on his macro views. The purpose of his series is to isolate macroeconomic indicators (“green marbles”) that are telling the true story of the market, rather than relying on the narratives or stories often portrayed as news. Jordi is a unique thinker and tends to publish these videos during market dislocations/regime shifts when he sees areas where his views differ from consensus sentiment.

Disclosures: This content is provided to you by Weiss Multi-Strategy Advisers LLC (“Weiss”). The foregoing information contains forward-looking statements, which present the Chief Investment Officer’s expectations and beliefs regarding future financial performance, and assumptions or judgments concerning such performance. Any such statements involve estimates, assumptions, judgments, and uncertainties, and you should not rely on such statements to reach conclusions or make any investment decisions. You will not necessarily be informed if the Chief Investment Officer’s expectations or beliefs change after the date hereof. Weiss has no control over information at any unaffiliated site hyperlinked to in this communication. Weiss makes no representation concerning and is not responsible for the quality, content, nature, or reliability of any unaffiliated hyperlinked site. The inclusion of an unaffiliated third-party hyperlink does not imply any endorsement, investigation, verification or monitoring by Weiss of any information in an unaffiliated hyperlinked site. In no event shall Weiss be responsible for your use of an unaffiliated hyperlinked site. This is not intended to be an offer or solicitation of any security. Any such offer or solicitation may only be made by means of a prospectus or confidential private offering memorandum.

Important disclosures: Disclosures: This content (the "Insights Page") is provided by Weiss Multi-Strategy Advisers LLC ("Weiss"). The views expressed on the Insights Page are for informational purposes only and are subject to change without notice. Information on the Insights Page has been developed internally and is based on market conditions as of the date of the original post on the Insights Page from sources believed to be reliable. Nothing on the Insights Page should be construed as investment, legal, tax, or other advice and should not be viewed as a recommendation to buy or sell any security or adopt any investment strategy. Past performance is no guarantee of future results. Please consult your own advisers regarding business, legal, tax, or other matters concerning investments. Weiss has no control over information at any external site hyperlinked on the Insights Page. Weiss makes no representation concerning and is not responsible for the quality, content, nature, or reliability of any hyperlinked site and has included hyperlinks only as a convenience. The inclusion of any external hyperlink does not imply any endorsement or ongoing monitoring by Weiss of any hyperlinked site. Investing in securities is speculative and involves substantial risk of loss.