Michael’s CIO (Check-It-Out) Report on the week just past — events, sarcasm, and global macro reflections

October 24, 2022

THEME: Drone On

China, Russia, Iran, and the Fed, all in their own way, seem to drone on with their same policies, even in the face of sage opposition. Maybe not the best policy for long-term continuity?🤨

GL🌍BAL

Throne On: Xi Jinping has been elected to an unprecedented 3rd-term as head of the Communist Party in China—From a global perspective, expect current policies to drone on🚜

Drones on: Russia has been attacking Ukraine with Iranian suicide drones; the small, low and slow-flying weapons are difficult to detect on radar. Civilian facilities and electric power plants have taken serious blows—An end to the 8-month long war would be a positive for global financial assets, but no end appears in site⚠

Stuck: Iran’s government led by Ali Khamenei continues to drone on and attack and arrest its own people at continued “women, life, freedom” protests following the arrest and death of Mahsa Amini for improperly wearing a hijab. Large international protests in solidarity with the movement occurred in Europe, the U.S., and Tokyo—A regime change could significantly rewrite security, economics, and relationships across the Middle East as well as reduce oil prices🛢

FedUp: Expect the U.S. Fed Reserve to continue raising rates at its next scheduled meeting in November as it also continues to shrink its balance sheet by $95B per month—At a minimum, expect this to mean low growth for the U.S. economy; at worst, I still envision Chairman Powell pushing us in to a Volker (1980’s) style recession😟 

Vote on: Midterm elections are usually a referendum on the current administration, but as anticipated in our January “Terrible Twos” report, this midterm election will be highly influenced by state and local political reactions to recent Supreme Court pronouncements—nonetheless, inflation, high gas prices, and socio-economic uncertainty will also be on voters’ minds💸—Ironically, gridlock between Congress and Administration has historically been positive for stocks, but I’m not holding my breath

New PM same ProbleMs: The U.K.’s new prime minister, Rishi Sunak, inherits the same economic problems Boris Johnson and Liz Truss faced—Truss tried to spark economic growth, but lacked consensus on how to finance it—🚪Although some are laughing at the British turmoil, I consider it a litmus test for what other European governments will face as Europe slides into recession and energy constraints heighten

CONTENT

Happy Diwali: May it bring warmth and peace into your life and a sweet year for those around you

PERSONAL

Female led VC: Find me this week at Bridge Funding Global, Los Angeles Women GP/LP Matching Dinner—the Bridge “bridges the gender gap” by connecting curated female led venture capital firms with investors🌉

Money Animals: Find me mid-November at Money Animals’ Financial Health Day in Santa Monica—”live by design and not default”

Super Market: Running Point and I were quoted by CPG Specialist regarding how consumer product good (CPG) companies could be affected by the $24.6B Kroger-Albertsons merger🛒(if the U.S. Federal Trade Commission allows it to occur)

Make it a great week😊
Michael
~~~

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-22-59