What I am watching, and why it matters.
Global macro commentary from Jim Perry. Liquidity first, then rates, then everything else. Each note is the written version of a video, so you can read it or watch it.
How a trip to the Gulf turned me from a trader into a strategist
The most important move of my career was one I argued against, from making markets in London to explaining them.
If you have a market opinion, own it
I publish my own portfolio and asset allocation to clients every week, because an opinion you will not own is not worth much.
The news is not built to inform you
Media outlets are paid for attention, so treat any single source as an argument rather than as the truth.
The jobs AI takes and the jobs it creates
Entry-level work that rearranges numbers is going away, and the work of explaining technology to a business is growing.
The bond market says no recession, and oil says be careful
Credit spreads and the dollar are calm, but oil is up 25 percent off its July low and stocks are tracking it lower.
SpaceX will carry twice the index weight of Nvidia and Apple combined
A 15% weighting in the Nasdaq 100 makes one unproven earnings stream the biggest single driver of the index.
The SpaceX IPO is a referendum on the AI trade
A $75 billion raise at $134 a share values SpaceX at $1.7 trillion, and the market has no earnings history to price it against.
The credit selling is a retail problem, not a credit problem
Institutional demand for leveraged loans is firm across the board, and the retail investors bailing out were sold a risk they never understood.
Breakevens say inflation expectations are collapsing
One-year breakeven rates have fallen from 5.3% to below 3% in a couple of months, and the bond market is not arguing.
The AI build-out is a real industrial revolution, and it is early
The economy is being driven by technology, financed through Wall Street, paid for by income investors, and backed by the government on national security grounds.
Three reasons the S&P is 17% off its low
Six straight up weeks came from falling oil, 27% earnings growth, and a bond market pointing to lower rates.
Why the rally is tracking the oil price
With Iranian exports restricted, oil has fallen from 120 to almost 80, and risk assets are leading again.
The all-time high is built on earnings, not sentiment
Both indexes hit records with oil down 30% from its high, the VIX at 17, and technology earnings up 45%.
What the forward oil curve says about the crisis
Oil 15 months out trades at $55, below pre-crisis levels, but our base case still runs through more escalation.
Three conditions before the oil price falls
Oil stays high until nuclear verification, safe passage through the straits, and control of Iranian exports are all in place.
Oil above $100 is the ceiling on every other market
The S&P 500 will not rally meaningfully until crude falls meaningfully, and three conditions have to be met before crude falls.
How markets price a de-escalation before it arrives
Risk assets tend to turn before a conflict formally ends, which makes timing, not direction, the hard part of this call.
The oil market is pricing an end to this conflict by autumn
Crude is priced back near $70 a barrel by September or October, which is the market forecasting that supply risk clears this year.
The market is telling you to watch oil, not the narrative
Crude at $95 with stocks and bonds higher on day 18 of hostilities: the inverse correlation is still doing its job.
Crude up 35% in a week is a supply story, not a sentiment story
The largest weekly increase on record is about damaged Gulf production, and the market is still pricing this ending in roughly a month.
Talk it through with Jim
The research drives the asset management. If you want this thinking applied to your own portfolio, start with a conversation.