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Here is what we told Hedge Funds this week – and how we’re trading it!

Each week, we summarize the key insights we’ve shared with hedge funds, highlight what to watch for, and explain how we’re navigating the macro landscape - all in a simple, concise format. If you want to thrive in markets, this is a must-read!
2025-01-24

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.

I (Andreas) have been travelling in the Middle East for the past 2 days meeting investors and clients, and they are all pretty upbeat on both risk assets and especially gold, and I’m left with 4 key take-aways from the trip now that I’m back home: 

  1. Sentiment in gold and silver is super bullish on both in the Middle East, mainly due to the vibes around Trump not seriously trying to alter the direction on the deficit. This is the markets way of expressing a potentially weaker USD as well, as it provides a better hedge against tariffs. 
  2. Vibe is that Trump will do deals – also with China, and potentially one involving the medium-term handover of Taiwan as well. China looks cheap given this. 
  3. Oil sentiment is semi-bearish and that was a surprise to me. Several of our counterparts expected an OPEC production increase ahead of schedule 
  4. Massive crypto optimism as well but that is not a surprise

Given this, let’s have a look at the current portfolio setup in light of this.

The portfolio has made its way safely through inauguration week, and Trump has not really surprised markets on the tariffs front, which was the clear base case going into the week. The current policy mix admittedly looks like something you would only implement if you wanted to allow risk assets to rally further. Trump has shifted from global tariffs and a shrinking fiscal deficit to now stating that he doesn’t want to impose tariffs on China if he can avoid it (but he will still exchange some trade terms regarding TikTok to allow it in the US). Additionally, fiscal spending has increased, targeting industrials, nuclear, and tech through the Stargate project.

We like our current portfolio setup from a macro perspective, and there is, in our opinion, no need to scale down significantly on risk. Trump has proven to be much more accommodative to risk assets (even from the outset) than we were expecting going into inauguration week.

The big theme in macro at the moment is that the whole world is rebounding (with the US leading the show), and 2025 will likely be the year where you can actually gain by diversifying your equity risk geographically. So far, European equities have outperformed US indices, and South Korea (which we very much like given the potential deal between the US and China on semiconductors) is off to a great start!

Chart 1: Europe is off to a flying start in 2025!

Each week, we summarize the key insights we’ve shared with hedge funds, highlight what to watch for, and explain how we’re navigating the macro landscape – all in a simple, concise format. If you want to thrive in markets, this is a must-read!

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