Happy Friday! 

Every week, we dive deep into macro trends, analyze asset movements, and uncover the best value plays in the world of macro. These insights are shared with hedge funds and institutional clients, and each Friday, we bring them directly to you.

While the macro landscape can be complex, we believe it doesn’t have to be intimidating. In this recurring series, we break down the key takeaways from the week, explain what we’ve told hedge funds, and outline how we’re trading these ideas — all in a straightforward and actionable way.

As always, let’s have a look at the current portfolio setup before we jump into the macro stories

As anticipated, we got a weak NFP report—almost across the board—with the only positive signs appearing in manufacturing and goods-producing payrolls. Despite the overall weakness, this is a decent sign that the US economy is not rolling over to the extent that would imply an outright crash in US equities. If that happens, it will most likely be Trump’s doing.

Private payrolls came in lower, and revisions turned negative, meaning this weakness is not just DOGE-imposed. The policy uncertainty under the Trump administration has likely changed hiring behavior over the past few months, with the effects now becoming visible.

Unemployment ticked up by 0.1 percentage points, youth unemployment increased by 0.5 percentage points, and we saw a large increase in the number of people outside the workforce who want a job but can’t find one. Additionally, part-time employment due to economic reasons increased.

On a net basis, it was a very weak report, and we are seeing the response in both bond yields and equities.

The portfolio has been positioned for this move in US macro surprises, with a tilt toward Fixed Income and non-US risk assets. So far, this has been the right call to avoid the recent downturn in US equities.

Our main struggle remains our BTC position, but we are reaching prime levels for accumulation.

Chart of the week: Employment trends are weakening