Real rates are rising rapidly.. What to do about it from a trading perspective?
A thread 1/n
A thread 1/n
Rising real rates is a natural consequence of disinflaiton as nominal bond yields rise, while priced inflation drops. This is exactly what central banks want right now..
The GBP example right here
2/n
The GBP example right here
2/n
When real rates rise, multiples tend to become compressed .. This has been an extra strong pattern since 2013 in US equities..
Real rates now point to Forward PEs of around 11-12 on the SPX, implying levels around 2700 with unchanged earnings..
3/n
Real rates now point to Forward PEs of around 11-12 on the SPX, implying levels around 2700 with unchanged earnings..
3/n
What to do in an equity portfolio, if multiples are to compress further?
I am trying to say short things in the top of Maslow’s hierarchy of needs and long things in the bottom of it.
Long stuff you need, short stuff you don't need.
4/n
I am trying to say short things in the top of Maslow’s hierarchy of needs and long things in the bottom of it.
Long stuff you need, short stuff you don't need.
4/n
I have updated my FREE newsletter with how I position myself for this tricky environment right here..
It is called 1.... 2..... 3.... Central bank panic
5/n
andreassteno.substack.com/p/steno-signal…
It is called 1.... 2..... 3.... Central bank panic
5/n
andreassteno.substack.com/p/steno-signal…
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