Macro Mondays: November 25, 2024

The podcast discusses current macroeconomic conditions, including a potential shift towards easing monetary policy and the implications for various asset classes. The discussion focuses on the US economy's growth deceleration, the impact of geopolitical events, and the potential for stimulus in Europe, while also assessing the outlook for the US dollar and the crypto market.

Crypto Market

• 00:05:34 The crypto market is experiencing a bull run, with meme coins and Bitcoin gaining traction. However, experts are not necessarily profiting from this surge, and there are concerns regarding excessive risk-taking. The Federal Reserve's potential balance sheet adjustments are being interpreted as a catalyst for this crypto market rally, with the expectation of future easing measures.

US Growth

• 00:12:41 The US economy is experiencing a growth deceleration, with signs of softening in employment and PMIs. This mirrors a similar pattern observed earlier in the year, prompting analysts to consider re-allocating to bonds. Concerns over re-inflation and the strength of the US dollar are mitigated by more dovish signals from the Trump administration.

Geopolitical Risks

• 00:15:03 Geopolitical risks are perceived as fading, particularly with a ceasefire in Lebanon and a potential peace agreement between Israel and Hezbollah. This suggests a de-escalation in the region and a less volatile environment for global markets. The Trump administration's policies and appointments also indicate a shift towards a more benign environment.

Bond Market

• 00:17:25 The bond market is showing signs of strength, with hedge funds increasingly betting on lower interest rates in the Eurozone. However, they are expecting higher dollar interest rates. The possibility of a softer dollar and lower bond yields is seen as positive for risk assets and may facilitate the continuation of the market rally.

European Economy

• 00:28:25 The European economy, particularly Germany, faces challenges related to slow growth and high energy costs. There's anticipation for a stimulus package from the next German administration, potentially involving hundreds of billions of euros to revive the industrial sector. This could potentially involve reviving nuclear energy and reshaping energy infrastructure, but the election outcome and stimulus specifics remain uncertain.