Wall Street's Number 1 ranked strategist is Bearish on Equities and Bullish on US Treasuries
Francois Trahan is Wall Street's number 1 ranked strategist. He is bearish on equities and bullish on US treasuries now.
Summary of his rationale from his latest video:
- Global PMI (Purchasing Managers' Index) has the biggest 2 months increase in 4 years. That is one of the reason that contributed to strong rally in US equity market.
- Best data in 4 years is like looking at economy from a rear mirror. Francois thinks incremental gains in global PMI is not sustainable as we digest a tightening monetary condition.
- Economy is going to slow and that means lower earnings estimates and spells lower market multiples (lower PEs).
- Currently there are countries outside US that are facing structural issues, like demographic issues in Japan & overcapacity issue in China.
- US Treasury is driven by economy. When you plot US Treasury 10 year bond yield with global PMI index, you cant tell the difference. Lower global PMI index will push US bond yield down, hence benefiting US treasuries and US bonds in general.
- Francois is telling his clients to sell cyclical stocks at profits and buy into US treasuries.
- There are US Treasury proxies in stock market like telecom, REITs and utilities stocks. These are companies with huge debts. When interest rate goes down, it makes their earnings look a lot better.
In 2015, François was voted to Institutional Investor magazine’s All-American Research Team as the #1 Portfolio Strategist, and has been selected as #1 for nine of the past ten years. Since 2010, he has also been ranked among the top analysts for Quantitative Analysis as well.
Source: cornerstonemacro.com/team-bio/
Below are his past 4 videos in forecasting at different periods:
His views in December 2016:
https://youtu.be/3BK_VBWeEWk
His views in June 2016:
https://youtu.be/9LR3AN6BS4U
His views in October 2014:
https://youtu.be/orucbl8rfjA
His views in February 2011:
https://youtu.be/Shu2B3nK4Xw
Amazingly all past 3 videos from February 2011 to June 2016 were spot on. This has certainly increase his credibility on his views in the video posted on December 2016.
Summary of his rationale from his latest video:
- Global PMI (Purchasing Managers' Index) has the biggest 2 months increase in 4 years. That is one of the reason that contributed to strong rally in US equity market.
- Best data in 4 years is like looking at economy from a rear mirror. Francois thinks incremental gains in global PMI is not sustainable as we digest a tightening monetary condition.
- Economy is going to slow and that means lower earnings estimates and spells lower market multiples (lower PEs).
- Currently there are countries outside US that are facing structural issues, like demographic issues in Japan & overcapacity issue in China.
- US Treasury is driven by economy. When you plot US Treasury 10 year bond yield with global PMI index, you cant tell the difference. Lower global PMI index will push US bond yield down, hence benefiting US treasuries and US bonds in general.
- Francois is telling his clients to sell cyclical stocks at profits and buy into US treasuries.
- There are US Treasury proxies in stock market like telecom, REITs and utilities stocks. These are companies with huge debts. When interest rate goes down, it makes their earnings look a lot better.
In 2015, François was voted to Institutional Investor magazine’s All-American Research Team as the #1 Portfolio Strategist, and has been selected as #1 for nine of the past ten years. Since 2010, he has also been ranked among the top analysts for Quantitative Analysis as well.
Source: cornerstonemacro.com/team-bio/
Below are his past 4 videos in forecasting at different periods:
His views in December 2016:
https://youtu.be/3BK_VBWeEWk
His views in June 2016:
https://youtu.be/9LR3AN6BS4U
His views in October 2014:
https://youtu.be/orucbl8rfjA
His views in February 2011:
https://youtu.be/Shu2B3nK4Xw
Amazingly all past 3 videos from February 2011 to June 2016 were spot on. This has certainly increase his credibility on his views in the video posted on December 2016.
Comments
Post a Comment