Matein Khalid

Dethronement Of King Dollar Result Of A Sequence Of Events

Post-Ukraine NATO Threat To Russia Is Far Greater Than Before

A New Global Energy Order Emerging With US Supplies As Pivot

Parallels Seen With Stagnation After Invasion Of Czechoslovakia

Rally skewed towards growth megacaps

Matein Khalid I thought the US stock market was overextended last week after the FOMC statement endorsed Wall Street’s “three rate cuts in 2H 2024 consensus”. My problem was this could be derailed by one bad inflation number and that Goldilocks economy might find that its growth porridge was a tad too hot. This is exactly what happened with this week’s data and thus equities were slammed last night […]

Sector rotation in markets widens

Matein Khalid Bliss it was that dawn to be alive but to be long Nvidia was pure heaven. The ghost of William Wordsworth will forgive me for butchering his verse but he could have written an immortal homage to the AI annus mirabilis of 2023 had he lived in our era. After all, the S&P 500 was up 24% in 2023 and is up 10.2% in the […]

Rates may not move, but markets will

Matein Khalid As we go into Fed watch purdah for the FOMC announcement tomorrow, one thing is certain. King Jay and his merry knights of the roundtable in DC will not move on interest rates but what they say about inflation and growth could move the financial markets with a seismic shock. The consensus prices-in at least three rate cuts in 2024 but the macro data, with […]

Bidenomics is all about fiscal largesse

Matein Khalid The spectacular bull market that resumed in mid-October has continued into the first 9-weeks of 2024. True, Nvidia at 919, Meta at 500 and Microsoft at 415 have all been catapulted from Wall Street to Valhalla (the abode of the Nordic Gods!) but Apple is down 14% in 2024 at 172 and Tesla at 177 are not exactly looking all that hot as they did […]

With Nvidia, we live in the best of all worlds

Matein Khalid Voltaire’s Dr. Pangloss’s observation that we live in the best of all possible worlds definitely is true for those who held Nvidia (NVDA) into what prove to be another earnings blockbuster and now see the shares rise from 660 the night before D-Day to almost 823 at the Friday close. The problem with NVDA is that it is no longer on Wall Street but has […]

Nvidia’s epic rise is overdone

Matein Khalid Nvidia’s epic rise from 150 in Jan-2023 to 726 now is historic in Silicon Valley. Yet it is no exaggeration to state that the entire fate of the Mag-7, the chip sector or even Nas-100 now depends on what Jensen Huang reports and guides on Wednesday. Nvidia (NVDA) shares are just not positioned for any hint of a disappointment in revenue or EPS growth. While revenues are […]

Saudis are well aware oil market is oversupplied

Matein Khalid Saudi Arabia’s unique role in the oil market as Opec’s swing producer, the de facto central bank of oil, owes as much to its spare capacity as it does to its colossal reserves, the world’s lowest drilling cost and the sheer scale of its oil exports. However, the kingdom has also historically not hesitated to cut planned increases in spare capacity, when the Saudi government […]

Mother of all risk rallies

Matein Khalid “Be careful what you wish for. You may just get it”. This is an apt metaphor for the SEC’s approval of ETF launches by Wall Street’s best and brightest (biggest/meanest) fund houses from BlackRock to Fidelity, Invesco to WisdomTree. It does not surprise me that Bitcoin fell from $47,000 to $42,600 now because buy on the rumour, sell on the news is a recurrent theme […]

World’s boldest macroeconomic experiment

Matein Khalid In the emerging markets financial jungle, fairytales are impossible without the right jungle guide. So when Alejandro A (gringo name Alex), one of my closest friends in life since we first met in New York in J.P. Morgan Chase’s capital markets training program decades ago and now the chairman of his own I-bank in Buenos Aires dissected President Milei’s blueprint for revolutionary energy reform, I […]

India remains darling of Emerging Markets in 2023

Matein Khalid If ever there was a year to make money in Big Tech, 2023 was it. My three big strategic calls all outperformed my expectations. Google rose from 85 to 142, Nvidia rose from 150 to 492 and Microsoft rose from 295 to 374. 2024 could well see several emerging markets beat the S&P 500’s stellar 26% rise this year, though the real fairytale has been […]

Why fund managers overweight Indian in any EM

Matein Khalid I agree with The Economist that India and Indonesia are the two shining stars of Asia and both are due for historic elections where the outcome is preordained, as capital markets metrics and fund flows I track discount in real time now. Prime Minister Modi will win the Indian general election with a decisive majority in the Lok Sabha. This is not just a prediction but […]

Internal fissures add to OPEC woes

Matein Khalid Brent crude has fallen to $78 in Asia while WTI is $74 even though the Israel/Hamas war has resumed in Gaza. The bear market in oil has seen 6-weeks of relentless selling in the futures markets and even the latest OPEC+ ministerial meeting failed to convince traders that an additional 900,000 barrel of promised output cuts will offset the tsunami of supply and weak diesel, gasoline and […]

A bearish conviction on black gold

Matein Khalid It is no coincidence that the yield on the 10 year US Treasury note plunged 60 basis points to its current 4.34% and the US Dollar index slumped to 103.40 as successive benign October inflation data and dovish central banker comments has led to a pivot in Wall Street interest rate expectations, with the consensus now projecting two rate cuts at the March and May 2024 FOMC […]

No pacifier or electric shock for the Street

Matein Khalid The smoke signals from the FOMC conclave suggests that Jay Powell will not gift the Street a pacifier nor deliver an electric shock, so expect a hawkish pause with no rate hike. The trillion-dollar shrinkage in the Fed’s balance sheet (QT) amplifies the liquidity squeeze since the ECB, BOE, RBA, BOC and yes, even Ueda-san’s BOJ are also slimming down their bloated balance sheets. Is […]

What Middle East desperately needs

Matein Khalid As the gods of war exact their grotesque ransom of human blood sacrifices in the Middle East, my mind resurrects the lyrics of a Vietnam era anti war John Lennon song from my boyhood. “All we are saying is, give peace a chance”. Something has gone very badly wrong in the Arab world since the death rattle of the Ottoman Empire a hundred years ago. […]

Doomed to relive 1970 stagflation nightmare

Matein Khalid The Treasury bond bloodbath is no longer about Fed policy, inflation mojo or the business cycle. It is impossible for the Powell Fed to meet its dual mandate 2% inflation target with even a 6.5% Fed funds rate as 3Q GDP was a shocking 4.9%. We are doomed to relive the stagflation nightmare of the 1970’s when the Fed consistently mismanaged its inflation fight while […]

China property stocks horror story

Matein Khalid The horror story unfolding in China’s property developer stocks and shadow banking system is pure Lehman 100X whose contagion is now guaranteed to spread from the Dragon Empire on an intercontinental scale at the speed of light. Mr. Hui, once the richest Chinese alive after Li Ka-shing, is now in jail as Evergrande becomes the most spectacular property developer to fail in world history. Evergrande […]

Three dimensional FX chess game

Matein Khalid The greenback was a one way bet since June when I had strongly recommended selling the Euro at 1.12 and the British pound at 1.31 since relative interest rate spreads/economic data momentum and central bank monetary policy all screamed another “buy me” spasm for King Dollar. The macro tea leaves got murky last week even as the war in Gaza escalates to IDF bombing raids […]

What Uncle Sam’s embrace of Venezuela means

Matein Khalid The discovery of an elephantine oil gusher in a Damam salt dome in 1937 by Chevron (once Standard Oil of California) geologists is the greatest black swan event in modern Arabian history. This oil gusher heralded the birth of Saudi Arabia as the new geopolitical fulcrum and financial superpower of the Middle East and Washington’s closest ally in the region other than Israel and the […]

Hamas brings shame to Palestine cause

Matein Khalid The cruel killers who constitute the high command of Hamas should now be renamed Dumbass. Did these deranged fools really think that sending death squads into Israeli towns and villages to slaughter house wives, babies, 260 teenagers/Gen-Z kids at a music festival, burn entire families in their homes would do anything but trigger the moral revulsion and disgust of the world and bring global shame […]

A bullish macro ballast on Dalal Street

Matein Khalid While hardly news to the cognoscenti of Dalal Street and Planet Desiwalla, India’s stock market has been on a roll and it seems as if everyone of the 330 million gods in the Hindu pantheon were cheerleaders for its bullish macro ballast. If James Bond has a license to kill, India is a license to make money since the end of the near biblical macro […]

At Goldman Sachs, chickens have come home to roost

Matein Khalid The chickens have finally come home to roost at Goldman Sachs after CEO David Solomon’s succession of strategic blunders triggered a 33% slump in Q3 earnings. This is the 8th successive quarter of profit decline at the fabled Wall Street investment bank that was once known as the planet’s most profitable hedge fund that just happened to have an NYSE listing. In essence, Goldman took […]

A country whose time has finally arrived

Matein Khalid Anguished at the atrocities in Israel/Gaza, I turn to a happier and happening EM, my obsession du jour in deal heat. Mel Gibson, Sigourney Weaver and Billy Kwan’s tale of love and betrayal in the twilight of Sukarno’s Jakarta, the year of living dangerously. My interest is now beyond hanging out in the beach clubs of Uluwatu and Kota amid the mysticism and Aussie sheilas […]

The gun has won against olive branch

Matein Khalid Once again, the gun has vanquished the olive branch in the Middle East. The dawn assault by masked Hamas gunmen who infiltrated Israeli towns, villages and kibbutzim across the Gaza border and went on a rampage of indiscriminate killing against civilians asleep in their homes and farms. Any act of calculated violence against an unarmed civilian population is an act of terror, whether it was […]

Gasoline demand plunges to 25-year low

By Matein Khalid Something is dangerously wrong in a world where the price of crude oil can drop 5.6% in a single session, as it did last night in New York. My short idea on crude oil three days ago and the dissection of the Dubai property cycle was savaged by critics who assured me that I did not understand that Saudi Arabia’s command is Biden’s demand […]

US political circus over by no means

By Matein Khalid Congress has averted a government shutdown in October but the political circus will resume in mid November. The risk of a US and thus global recession has never been higher, this time the wolf is here. Why? One, every major US recession since 1974 has been preceded by a sharp rise in oil prices. Brent crude was $70 in early June and is near […]