Michael’s CIO (Check-It-Out) Report on the week just past — events, sarcasm, and global macro reflections
October 17, 2022
THEME: Between a ROCKet and boring company
Between SpaceX and Boring Company is Tesla and now maybe Twitter as Elon Musk says again that he is willing to purchase the company. Many other geopolitical situations seem to similarly be somewhere between missiles, rock hard resistance, and boring holes.
GL🌍BAL
MUSKet fire: Between SpaceX and Boring Company is Tesla and now maybe Twitter as Elon Musk says again that he is willing to purchase the company at $54.20 per share. Twitter could continue to be a major distraction from Musk’s 3 other companies and may lose value post sale—If the sale goes through, Running Point could consider assembling a consortium to take Twitter off his hands for $4.20 a share
SHIELD: 14 members of NATO — plus Finland, which is soon to join — want to build the European Sky Shield Initiative, an interlinked missile defense system spread across the continent🚀
Rocket Man: Kim Jong-un, Supreme Leader of North Korea, keeps firing missiles for attention and talks up the threat of nuclear war (which would be a credit negative). Two weeks ago North Korea fired a missile over Japan for the first time in 5 years and last week saw North Korea’s 26th missile test this year
RockXing: Xi Jinping will be reappointed China’s top leader for an unprecedented 3rd term at the Communist Party’s plenum: people’s leader for life! Xi seems to have rock solid backing politically, but is exposed internationally as domestic growth “bores” because of zero-covid policies, widespread real estate fiascos, aging demographics, climate change, high youth unemployment, and vulnerabilities on the world stage—We care about whether there will be enough Chinese economic growth to reignite global growth,…but I’m not holding my breath😏
WLF: “Woman, Life, Freedom” protests spread and continue in Iran following the tragic death of Mahsa Amini—Hopefully this leads to regime change👭, but that remains to be seen; the government survived previous mass protests in 2009, 2017, and 2019
Stayflation: US inflation hit a 40-year high. Thus the Federal Reserve will likely keep its brisk pace of raising interest rates until it tips the U.S. into recession—as mentioned previously, Powell is using the Volker playbook (even though its pragmatism is questionable)💸
A thousand cuts: The International Monetary Fund (IMF) cut its global growth forecast yet again—we saw this coming months ago during one of their earlier forecast cuts🔪
Subvariants: COVID cases rising again—thank you omicron subvariants🦠—COVID has lead to huge progress in MRNA research, but continues to restrain global socioeconomic growth
PERSONAL
Job Boom: Running Point and I were quoted by Forbes last month in an article titled, “Not Even Inflation Can Kill The Job Boom,” regarding whether unemployment will rise during the remainder of 2022—Our take is that higher unemployment may actually be an economic positive because it could provide the Federal Reserve Bank a better chance of saving the economy by curtailing wage inflation.
Make it a great week😊
Michael
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Michael Ashley Schulman, CFA
Partner & Chief Investment Officer
Running Point Capital Advisors, your family office
“We deliver custom investment solutions, innovations, and unique perspectives to you and your family.”
Disclosure: The opinions expressed are those of Running Point Capital Advisors, LLC (Running Point) and are subject to change without notice. The opinions referenced are as of the date of publication, may be modified due to changes in the market or economic conditions, and may not necessarily come to pass. Forward-looking statements cannot be guaranteed. Running Point is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Running Point’s investment advisory services and fees can be found in its Form ADV Part 2, which is available upon request. RP-22-57
