Michael’s CIO (Check-It-Out) Report on the week just past — events, sarcasm, and global macro reflections
December 19, 2022
THEME: Investar, The Way of WallStreet (not Water)
Spoiler alert: If you don’t want to know what happens in 2023, read no further📚
GL🌍BAL BIZNOMIC$
Variety: Expect oodles of mixed messages for the economies and markets next year—Investments will trade up and down on various indicators and as investors try to find trends and patterns in the data ➜ It will be a rough road ahead⚠
300: A solid war movie and the horrific number of days Russia has attacked Ukraine. Missiles, drones, and winter cold are wrecking people’s homes and lives—💀The war is an innumerable strain on all economies involved and incalculably inflationary ➜ The country that authored “War and Peace” seems to lean more toward one than the other—Peace, should it come, would be a huge positive for people and markets🕊
Pandora: Wealthy countries expect to triple their annual biodiversity conservation aid from $10B to $30B by 2030 according to the 15th Conference of the Parties (COP15) to the United Nations Convention on Biological Diversity (CBD)🌿—The aspiration is to stop wildlife extinction and halt ecosystem destruction ➜ The agreement signals changes to farming, supply chains, and conservation—Let’s hope it holds up🐘
Un-Zero COVID: China abandoned its zero-COVID policy and Omicron cases are on the rise. Schools halt in person classes, staffing shortages increase, transportation falters, deaths and hospitalizations are up🦠 ➜ Factories and supply chains will be thrown back into chaos, especially with Lunar New Year only five weeks away ➜ China’s reopening will have a greater impact on Europe than the U.S.
PacificFist: Pacifist Japan reveals 5-year $320B plan for largest military buildup since WWII to secure sea-lanes and supply chains and defend against possible regional aggression from China, North Korea, or Russia⚓🛳
SeaConspiracy: N. Korea fires more missiles into the sea, but ostensibly threatening Japan🚀
Babylon: Political turmoil in Peru (Pedro Castillo, its 5th president in 6 years, was impeached), Tunisia (transition to democracy under stress; may return to autocracy under President Kais Saied), Iran (more “women, life, freedom” protestors jailed and killed), and South Africa (President Cyril Ramaphosa just won another term) will likely continue into 2023⚒
Commodities: Expect some commodity demand to pick up and some supply lines to become more erratic [see above]⛏
Higher for longer: Expect Christine Lagarde of the European Central Bank (ECB) and her counterpart Jerome Powell at the Federal Reserve to keep raising interest rates in 2023 ➜ Regardless of whether or not recession comes, recession and stagnation fears will persist💸
StayFlation: Inflation may moderate, but it is not disappearing and it is not returning to 2% anytime soon—Prices for services remain stickier than prices for goods ➜ What the Fed wants and what it gets will differ and markets will deal with the consequences📉📈
Consumer consumption will continue as savings and spending power remain elevated compared to times of crisis—This is a huge positive! Consumerism remains robust💰
SeaLectricity: Azerbaijan, Georgia, Hungary, and Romania agree to underwater Black Sea project to bring wind farm “electricity” to Europe—This is credit-positive for Europe
CONTENT
Messi vs Mbappé🥅 Argentina wins World Cup against France, 3(4) to 3(2 )—World Cup 2026 will be co-hosted by the U.S., Mexico, and Canada⚽️
PERSONAL
DSCVR: We were quoted twice by Blockleaders.io regarding crypto slang and jargon✍🏽
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-22-75
