Unwinding the Hype

This week we have seen the first part of the great unwind of three years of hype and P/E Multiples. What the market seems to ignore is that it needs to primarily deal with the dislocations associated with the move from a speculative economy to a growth infrastructure/community based economy after January 17th.

Here is a little snapshot of some of the inputs we use in our Macro Algo and the change in those inputs since August 7^th. What is interesting here and lead us to the conclusion that the economy is bucking up against headwinds, is the fact that we see money having to move around rather than see fresh money moving sectors. To illustrate look at the number one sector down, gold, while the number one upside area is discretionary spending (XLY ETF). So the pandemic response is funding excesses rather than protection, interesting, and maybe validates some of our recent comments, that the certainty that there is not a COVID problem is deep seated.