Halfway There

Being the halfway point of year, this title was easy, but it made me think of the Soundgarden song, of the same name, here and miss Chris Cornell. One of my favorite singers, who ended his time on this planet way too early. The band's 'Superunknown' album, which was released in 1994, was one of my favorites from high school.

This week, instead of focusing solely on last week, I thought I'd share some charts on the Q2 and the first half of the year. This isn't the most idea set of charts, but I'm working off my laptop in a basement with a DSL connection, so it is what it is.

Last week saw ags do a quick and hard check back on recent performance, while most equities, as well as energy and metals were higher.

This next chart shows price indexes. You can see equities mostly continued their run higher, with Hang Seng striking some hurdles. Most commodities were lower, but Nat Gas was up huge. Bitcoin's continuing volatility and the Yen's strength were the major stories in currencies. Asian High Yield was off big compared to other regional high yield and US Aggregate was off quite a bit too in bonds. The EM Government index was strong performer though.

Equity performance was mostly positive across the globe. I've highlighted a few. The top performer was the NASDAQ 100, which was up nearly 39%. The top non-U.S. tech index was the Nikkei at +27%. The FTSE All World is that thick dashed lined in the middle. It closed H1 up 12.5%. Just like in bonds, the worst performer was out of Asia with the Hang Seng down 4.4%. I'm interested to see how this plays out in H2. Tech has strong momentum and China is in the middle of a sufferfest. Nearly everyone else is somewhere in the low single digits, which is a solid first six months.

A couple more charts below. They are seasonality charts. This first one is the Russell 1000. You can see the blue line tracking this year's performance. Up more than 15% is a much better than its average start. It's even pretty close to that upper band. U.S. Large Cap equities are looking like they could have an excellent year. In the last 30 years, there are only a few individual years that a strong start like that didn't end well.

I also wanted to see how this chart might compare with the VIX. It appears this index is moving along below average. If you look at the average line, you can see a bit of a belly in July, then rising slightly into October and November. I'm interested to see if that continues this year.

Markets seem to be moving along in a general state of normality with a few exceptions, so it will be fun to follow along and find out if any events shake the tree.

It's a holiday weekend in the States, so you will not get the same level of detail on the posts this week. I will cheat a little and steal descriptions directly from the podcasts. Remember, it's going to be a lighter week with a half day on Monday and off Tuesday in the U.S.

Best of the Week

Any time James Clear is available, he's likely to be a 'Best of' for me, but when you combine that with Adam Grant being the interviewer that puts this one over the top for me. The work Adam and James do have helped me tremendously. I wish I had access to their teaching while in college. In this episode, James speaks with Adam about changing our systems for achieving goals, building habits around identities as well as actions, and accumulating small wins that add up to big change.?Listening time: 38 minutes

Best of the Rest

Ted runs these sponsored episodes where the sponsor comes on is the highlight of the session. This?conversation covers Don’s history on Wall Street, identification of the opportunity in single family rentals, and path to founding of Pretium to capitalize. He and Ted discuss the single-family rental market, sourcing and servicing properties, scaling through technology, critiques of single-family rental investments, growing into adjacencies, and aspirations for Pretium in the decade to come. Just because it's sponsored content doesn't mean it can't be a good learning experience and worth your time. Listening time: 69 minutes

Staying on the real estate theme here. If you're not following Nick on Twitter I highly recommend it. I found him this week and there's ton of excellent content around real estate. Some of the charts in this thread are crazy. I can't say there's just one that stands out, but they will give you a picture of the AirBnB impact on Real Estate in the US.

Blackrock highlights AI's impact on the global economy and industries. As the title shows, they aren't doing the whole googly eyes and drooling over it though. So far this year, AI stocks are driving the S&P 500 performance. I stole this chart from Soc Gen's Cross Asset Research team, which shows the returns with and without those stocks.

Scott Patterson is joining Michael in this episode. Scott has just released he latest book, Chaos Kings. This book in on my 'To Read' list, which is growing rather quickly as I read books a little less. Any how, Michael and Scott discuss some of the topics in his book; unforeseeable outcomes, the risk of Covid, Mark Spitznagel's systematic strategy, Nassim Taleb, extreme volatility and market chaos, and Bill Ackman's discretionary trading. Listening time: 48 minutes

Cem Karsan joins Niels for a tour of the current volatility and macro environment, where they take a deep dive into where markets and economy are heading. They discuss the potential of the economy going into stagflation and why many investors might not be prepared for what is to come, the unpredictable volatility environment and how technology like AI is affecting markets. The guys also discuss the potential dangers of zero day options and how to position yourself appropriately for the markets, how to prepare for the upcoming summer holidays and much more. Listening time: 60 minutes

One for the Road

This is yet another crazy outcome from supply issues.

Thank you for reading. Have a revolutionary week. I regret that I have one blog to write for my country.*

Michael