wknd notes: The Mountain Never Ends

Did a recent podcast on Capital Allocators with Ted Seides covering macro paradigm shifts, investment philosophy, and what I’m up to at both One River and Coinbase [click here to listen]. Dusted off a climbing anecdote that I reflect on as each new year approaches (see below). Back in a couple weeks with full wknd notes. All the very best, E

Week-in-Review: Mon: US launches probe into China’s semiconductor industry. Fed looks to make stress tests to banking sector more transparent. France appoints new Finance Minister. El Salvador overturns blanket ban on mining. Panama rejects Trump call for US to take back canal. Luigi Mangione pleads not guilty to New York murder charges. UK GDP 0.9% (1.0%e), Canada GDP 1.9% (1.6%e), US durable goods orders -1.1% (-0.3%e), US new home sales 664k (669k e), US cons conf 104.7 (113.2e), S&P +1.8%. Tue: Reformist Iranian government lifts ban on WhatsApp and Google Play. US banking lobby sues Fed over stress test framework. Syria unites rebel factions under defense minister as al-Sharaa consolidates power. Richmond Fed Survey Mfg Index 10 as exp, S&P 1.1%. Wed: Russia launches attack on Ukraine’s energy infrastructure. Azerbaijan Airlines plane crashes in Kazakhstan. S&P closed. Thur: Finland seizes Russian shadow fleet oil tanker after cable-cutting incident. Syrian police killed in violent clashes with Assad loyalists. Israel pushes deeper into southern Lebanon despite ceasefire deal. Slowing consumption prompts Turkey to cut rates by 2.5% to 47.5% for first time in almost 2 years. US Jobless claims 219k (223k e) / Cont claims 1910k (1881k e), Tokyo Core CPI 2.4% (2.5%e), S&P flat. Fri: US says Russian air defense systems struck Azerbaijani plane. Israeli warplanes hit Houthi targets in Yemen. Ukraine receives first US gas shipments via Greece. Italian journalist arrested in Iran after two Iranians were detained in Italy and Switzerland for allegedly passing on drone technology. Israel’s attorney-general orders probe into PM Netanyahu’s wife. S&P -1.1%. Sat: Putin apologizes to Azerbaijan for downing airliner.

Weekly Close: S&P 500 +0.7% and VIX -2.41 at +15.95. Nikkei +4.1%, Shanghai +1.0%, Euro Stoxx +1.0%, Bovespa -1.5%, MSCI World +0.9%, and MSCI Emerging +1.0%. USD rose +2.2% vs Bitcoin, +2.2% vs South Africa, +1.8% vs Brazil, +1.4% vs Ethereum, +1.3% vs Mexico, +1.2% vs Russia, +1.0% vs Yen, +0.6% vs India, +0.5% vs Australia, +0.4% vs Canada, +0.4% vs Chile, +0.2% vs Indonesia, flat vs Euro, and flat vs China. USD fell -0.3% vs Turkey, -0.2% vs Sweden, and -0.1% vs Sterling. Gold -0.5%, Silver +0.0%, Oil +1.6%, Copper +0.5%, Iron Ore -1.0%, Corn +1.7%. 10yr Breakevens (EU +2bps at 1.78%, US +5bps at 2.35%, JP -4bps at 1.47%, and UK +2bps at 3.52%). 2yr Notes +2bps at 4.33% and 10yr Notes +10bps at 4.63%.

Moves Since Nov 4th (pre-election): S&P 500 +4.5% and VIX -6.03 at +15.95. Nikkei +5.9%, Shanghai +2.7%, Euro Stoxx -0.4%, Bovespa -7.9%, MSCI World +2.7%, and MSCI Emerging -4.2%. USD rose +7.1% vs Brazil, +6.7% vs South Africa, +5.9% vs Australia, +5.4% vs Russia, +4.3% vs Euro, +4.1% vs Chile, +3.8% vs Yen, +3.7% vs Canada, +3.1% vs Indonesia, +3.0% vs Sterling, +2.7% vs China, +2.6% vs Sweden, +2.1% vs Turkey, +1.7% vs India, and +1.1% vs Mexico. USD fell -27.7% vs Bitcoin, and -26.5% vs Ethereum. Gold -5.0%, Silver -9.3%, Oil -0.1%, Copper -7.9%, Iron Ore +0.7%, Corn +5.6%. 10yr Inflation Breakevens (EU -7bps at 1.78%, US +8bps at 2.35%, JP +21bps at 1.47%, and UK -6bps at 3.52%). 2yr Notes +17bps at 4.33% and 10yr Notes +34bps at 4.63%.

2024 Year-to-Date Equity Index Close (high to low): Argentina +117.9% priced in US dollars (+177.2% priced in pesos), NASDAQ +31.4%, Israel +25.4% priced in US dollars (+27.5% in shekels), S&P 500 +25.2%, Taiwan +21% in US dollars (+29.8% in Taiwan dollars), HK +18.6% in US dollars (+17.9% in HK dollars), MSCI World +18.5% in US dollars, Malaysia +15% in US dollars (+11.9% in ringgit), Czech Republic +14.9% (+24.5%), Hungary +14.3% (+31.1%), Singapore +13% (+16.4%), Turkey +12.6% (+34.2%), Germany +12.4% (+19.3%), China +11.2% (+14.3%), Russell +10.7%, Belgium +8.3% (+15%), Canada +8.2% (+18.3%), Spain +7.5% (+14.2%), Japan +7.4% (+20.4%), India +6.8% (+9.6%), Greece +6.2% (+12.7%), Italy +6% (+12.6%), South Africa +5.8% (+8.1%), Netherlands +5.3% (+11.8%), Ireland +4.3% (+10.7%), UK +3.7% (+5.4%), Euro Stoxx 50 +2.1% (+8.3%), Colombia +1% (+15.6%), Austria -0.5% (+5.7%), New Zealand -0.5% (+12.2%), Thailand -0.8% (-1%), Norway -0.8% (+11.5%), Saudi Arabia -1.1% (-0.9%), Australia -1.2% (+8.8%), Poland -2.5% (+1.8%), UAE -2.6% (-2.6%), Philippines -3.2% (+1.2%), Switzerland -3.3% (+4.1%), Chile -4.1% (+8.2%), Sweden -5.3% (+3.9%), Indonesia -8% (-3.2%), France -8.2% (-2.5%), Finland -11.6% (-6.1%), Denmark -12% (-6.5%), Portugal -17.4% (-12.3%), Korea -20.7% (-9.4%), Mexico -28.2% (-14.1%), Brazil -29.8% (-10.4%),

Anecdote (Jan 2011): Pretty much everything I learned about climbing mountains, I learned from Vincent Ravanel. He’s 7th generation high altitude mountain guide from Argentiere, France. And from father to son, the Ravanel’s passed a simple mantra: “The Mountain never ends.” Like most things profound, it touches on something universal and fundamental. Because climbing mountains, physical and metaphorical, is what Man does, and has always done, and will always do. Vincent would calmly whisper that mantra high on the rock and ice when we faced a challenge, a fork, a decision. It served to humble us both, remind us to pace ourselves, and to only press for the summit if conditions and timing were optimal. It also served to inspire, to capture in a sentence our ambition to tackle something so large and enduring. You see, to bag a tough peak and return intact, of course you need skill/strength/tenacity, but you also need the right temperature/weather/visibility and a measure of good luck. Combine all those well, find the opening, push like hell, and bang – success. But fight the elements, force it, press your luck, and, well, you know the result. So, I take a deep breath, and look up, a new quarter looms and above that, a new year, a new decade, a new century, even a new millennium. And on these first steps of this ambitious climb, I remind myself of the importance of patience and humility, optimal conditions and timing, and a little good luck. But mostly, I tell myself to listen carefully, at those tough and lonely points that surely lay ahead, for the Ravanel whisper, “The Mountain never ends.”

Good luck out there, ?

Eric Peters

Chief Investment Officer

One River Asset Management

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Disclaimer: All characters and events contained herein are entirely fictional. Even those things that appear based on real people and actual events are products of the author’s imagination. Any similarity is merely coincidental. The numbers are unreliable. The statistics too. Consequently, this message does not contain any investment recommendation, advice, or solicitation of any sort for any product, fund or service. The views expressed are strictly those of the author, even if often times they are not actually views held by the author, or directly contradict those views genuinely held by the author. And the views may certainly differ from those of any firm or person that the author may advise, converse with, or otherwise be associated with. Lastly, any inappropriate language, innuendo or dark humor contained herein is not specifically intended to offend the reader. And besides, nothing could possibly be more offensive than the real-life actions of the inept policy makers, corrupt elected leaders and short, paranoid dictators who infest our little planet. Yet we suffer their indignities every day. Oh yeah, past performance is not indicative of future returns.

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