A New Approach to Sector Investing

Many advisors that we speak to believe that it is possible to improve client outcomes through tactical management of sector exposure, but developing the right strategy for doing so can be extremely difficult. Please see attached link to a 15-minute webinar where Craig Cmiel, Managing Director of C8 Technologies US, and Chris McHeffey, Head of US product at C8, will introduce a powerful new tool that can potentially enable advisors to deliver better returns, lower risk, or both through tactical management of sector exposures. This scientific approach might be a great addition to your toolkit.
BY SCOTT DOUGLASS

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NDR Fixed Income Allocation Strategy May 2024 Update

BY BRIAN SANBORN
The NDR Fixed Income Allocation Strategy, Positioning Update Read more →

USDJPY and Gamma Trading (29th July 2024)

BY JON WEBB
In our piece in February (Turning Japanese, Feb 2024) we discussed how carry trades in currencies have a predisposition to trade an “escalator / liftshaft” pattern. The Japanese Yen, as the principal funding currency, is particularly vulnerable to violent reversals to what has been a remarkably steady and successful carry trade. In the last couple of weeks, as analysts started to consider the possibility of a BoJ rate hike at their meeting on 31st July, JPY crosses exhibited a bout of significant strength. USDJPY fell around 10 big figures from ~162 to 152. Is that enough to have cleared the decks? Simply put, it is not possible to clear out two years of accumulated positions in a couple of weeks. The fact that CFTC commitment of trader positioning was showing JPY shorts at their most extended since 2007 (pre GFC) before last week’s sharpish position reduction, suggests this is merely a shot across the bows, so far. Japanese retail traders (Mrs Watanabe) have slowed accumulation to a stand still but wholesale flight is far from evident. Read more →

MI2 Partners Thoughts From The Divide: Never Rains But It Pours

BY JON WEBB
t’s been a challenging week for President Trump. The problems started when the Justice Department released a memo as part of their “commitment to transparency” that explained there was no evidence of an “Epstein client list” or that his death was suspicious. Trump offered a spirited defence of AG Pam Bondi, but this did little to placate the MAGA base, who appeared understandably sceptical. Reports that China believes it has the whip hand in trade negotiations because of its rare earth leverage can’t have improved the President’s mood. Worse still, there does seem to be substance to those reports. One poker tell was the recently announced deal between MP Materials and Apple, which will invest $500mn in rare earth magnets and a recycling facility (of course). That news followed last week’s announcement of a $400mn investment in MP by the Pentagon, no less! Trump then managed to go 0 for 3 when he ostensibly floated a trial balloon on firing Powell. The market reaction prompted a swift walk-back. Read more →
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