By Matein Khalid The global EV market has entered a cutthroat, even Darwinian competitive dimension now that Tesla (TSLA) has initiated a price war to capture market share, though a plunge in gross margins is the blood sacrifice for market dominance. So TSLA’s Q1 earnings were a predictable horror, with a fall in operating income/margins after successive price cuts. Tesla can succeed in this strategy in the […]
Matein Khalid I must thank Saudi Arabia’s prince Abdulaziz for the very welcome 7% (pre-market) rise in APA Corp (APA), Marathon Oil (MRO) and Schlumberger (SLB). My three large cap stooges in the universe of black gold. The Saudi Oil Minister had sent numerous smoke signals that speculators were shorting paper oil, whose volumes are often 15 to 20 times the 100 million barrels a day consumed […]
Matein Khalid Get set for a spectacular rally in bank shares that has already begun in the pre-market. First Citizens will acquire the loans/deposits of SVB from the FDIC injects badly needed confidence into the US banking system. Deutsche Bank is also a false alarm as the 40% spike in its credit default swaps on Friday was due to panic selling in European banks rather than any […]
Matein Khalid There was no way Uncle Sam was going to allow a mass extinction event to destroy thousands of VC funded tech and life science startup to be wiped out due to the collapse of Silicon Valley Bank (SVB). The “flight to quality” trade, illustrated by a steep plunge in the yield of the 2 year US Treasury note from 5.07% last Wednesday to 4.35% is […]
Matein Khalid If banks were people, Standard Chartered Bank (SCB) would be a plain Jane spinster, always a bridesmaid but never a bride, jilted at the altar by her suitors and now at the nikah by First Abu Dhabi Bank. I had a near heart attack when I saw the shares rise 20% in London as the grapevine said a major Abu Dhabi bank was going to bid for […]
Matein Khalid Three millennia of Chinese history and the neonlit grandeur of Macau are a testament to the fact that passion for speculative assets is a recurrent theme across untold generations in the Middle Kingdom. Yet even I was stunned by the swiftness and intensity of the bull market in China/Hong Kong that began in late October after a sell off triggered by foreign selling after President […]
Matein Khalid Was King Dollar dethroned in November? The trade weighted US Dollar Index rose 20% from June 2021 to November 2022, its biggest bullish run since the year before the Plaza Accord in 1985. The macro ballast behind the King Dollar trend gained huge momentum after the Powell Fed abandoned its “inflation is transitory” mantra and began to raise interest rates in early 2022. The US […]
Matein Khalid Don’t fight the Fed is a Wall Street cliché that makes total strategic and tactical sense as America heads for Turkey/cranberry sauce this Thanksgiving. While the S&P index is up 12% since its October low on euphoria over a CPI dip, hopes (misplaced) of a Fed pivot, a fall in the 10 year US note yield to 3.77% and a 4% drop in King Dollar. […]
Matein Khalid Tesla (TSLA) was a fairytale in 2020 when it soared 740% and then 50% in 2021. The fairytale has morphed into a nightmare in 2022, with the shares down 52% from their January highs of 402 to 168 as I write. What went wrong? One, 2022 has been an annus horribilis for NASDAQ, which is down 32% YTD. Since Tesla has a stock market beta […]
Matein Khalid An asteroid collision with earth 65 million years ago created a mass extermination event that wiped out the dinosaurs. This is an apt metaphor for the monetary tightening of the Powell Fed in 2022 that wiped out so many emerging growth segments in Nasdaq, including several notable electric vehicle (EV) startups now on critical life support. Most wannabe Teslas all over the world are going […]
Matein Khalid My digital purdah came to an end with a bang and not a whimper as Powell made it clear that it is “very premature to think about a pausing”. This was a cold shower to the bulls and the DJIA went from +350 to -500. What an ouch! The Treasury bond market resumed its bloodbath. Chairman Powell’s message to the Street was precisely what I […]
Matein Khalid I was invited by Geneva’s Bank Syz for a fascinating discussion with its CIO Charles Monchau and some of my close friends who are family office CIOs at Zuma, a wonderful venue that I had never visited in the afternoon until now. It is always nice to see a familiar place from a totally different perspective in sunlight fortified by Evian! Danke schön/merci beaucoup/molto grazie […]
Matein Khalid Investor | Family Office CIO | Portfolio Strategist | Board Advisor | VC | Finance Professor Brazil will elect its next president on Sunday. This election will send shock waves across Latin America and the global markets because if President Bolsonaro wins, all bets are off for the Amazon rainforest and any credible hope to win the battle against climate change. Bolsonaro has accused his […]
Matein Khalid Investor | Family Office CIO | Portfolio Strategist | Board Advisor | VC | Finance Professor There will be a bloodbath in Nasdaq’s Big Tech Godzillas and size definitely matters in the tsunami of panic selling yet to come. Alphabet proved that digital advertising is not immune to global economic storm clouds as both Google Search and YouTube revenue dips were a shocker. Microsoft’s Azure […]
Matein Khalid Microsoft is down 7.8% as I write as the thesis I outlined yesterday for the 330 short is sadly playing out and now even the Azure growth franchise exhibits decelerating growth. PC shipments, IT spending, operating margins and EPS are all going to be downgraded in the next six months. I am really convinced that MSFT will trade well below 200 by early 2023. My […]
Matein Khalid Investor | Family Office CIO | Portfolio Strategist | Board Advisor | VC | Finance Professor Russia’s terror bombing of Kiev, Lviv and Odessa significantly escalates the geopolitical stakes in the Ukraine war. This tragic slaughter in the killing fields of Europe must stop if the human race has a shred of civilized DNA left in it. The bomb explosion on the Kerch bridge in […]
Matein Khalid Investor | Family Office CIO | Portfolio Strategist | Board Advisor | VC | Finance Professor Liz Truss will go down in history as the worst Tory PM in a past century that includes Chamberlain (Munich), Eden (Suez), Macmillan (Profumo sex scandal), John Major (Black Wednesday) and Bo Jo (Brexit). She has gutted the UK’s credibility in global finance, degenerated its macroeconomics into moronomics, and […]
Matein Khalid Investor | Family Office CIO | Portfolio Strategist | Board Advisor | VC | Finance Professor I have always fantasized about buying into a midtown Manhattan office building portfolio since New York City is the nerve center of global finance, banking, digital media, fashion, art and the coolest, most creative yuppies, the best and brightest of mother earth. Now my fantasy has come true. I […]
Matein Khalid Investor | Family Office CIO | Portfolio Strategist | Board Advisor | VC | Finance Professor September CPI was a disaster and now makes it impossible for the Federal Reserve to pause, let alone ease monetary policy until the Fed Funds rate reaches at least 5%, which it will by early 2023. This is not a mere opinion as opinions are like a certain body […]
Matein Khalid Investor | Family Office CIO | Portfolio Strategist | Board Advisor | VC | Finance Professor The Microsoft 320 short idea is a beauty now that MSFT has fallen to 225. This is just a valuation compression due to interest rates. Once the overleveraged consumer rolls over, I believe MSFT will fall to 150. The modern era of floating exchange rates began when President Nixon […]
Matein Khalid King Dollar, aggressive Federal Reserve monetary tightening, an oil shock, recession in Europe/China and pandemic related hits to world trade have converged to make 2022 a classic annus horribilis for emerging markets. Yet my late Dad used to say – “when the going gets tough, the tough get going”. This is why I am now hunting for potential triple baggers in the Saigon stock exchange, […]
Matein Khalid The 20 year highs in King Dollar and 18% rise in its trade weighted index in the past year has rewritten the rules of investing in the international financial markets. King Dollar has wrecked havoc with emerging market currencies and Third World sovereign bonds as any poor unlucky investor in Pakistan, Turkey, Lebanon, Sri Lanka and Egypt government bonds will attest. The World Bank estimates […]
Matein Khalid Brent crude was grossly overvalued at 124 in June and black gold has come down as supply angst is replaced by the very tangible reality of a China where 7% GDP growth is not going to come back for the rest of the decade. Thus demand destruction in the petroleum products market is inevitable. At $85, Brent is now below its level when the Russian […]
Matein Khalid A country should never be dependent on the kindness of strangers – hot money inflows from global bond markets to fund a bloated, irrational fiscal and current account deficit. This is a lesson Britain learnt the hard way in 1976 when HM Treasury was forced to go cap in hand to Washington for an IMF bailout and again on Black Wednesday, September 1992 when billionaire […]
Matein Khalid “Our currency, your problem”. John Connally, Treasury Secretary in the Nixon White House uttered these words to the world’s elite when he torpedoed the Bretton Woods regime’s gold link to the US dollar in 1971. Fifty one years later, the world is still paying a terrible price for the US dollar’s role as the dominant reserve currency. The US Dollar Index (DXY) is up 20% […]
Matein Khalid Mortgage rates in the UAE have now doubled from 2% to 4%. My view on a protracted inflation cycle and a sharp rise in credit risk during the next year as the global/UAE economy slips into recession means that mortgage rates could rise to 7 to 8%, making a mockery of the argument that this is a cash only market with juicy rental yields. When […]
Matein Khalid The year 2022 has been an annus horribilis for Pakistan’s sovereign debt, even by the dismal standards of the emerging markets. Political stability has been illusive as the populist, incompetent PTI government of Imran Khan lost a no confidence vote in parliament and the fragile PDM coalition has not been able to restore credibility on macro policy as the free fall in the rupee to […]
Matein Khalid Brent’s rise to $103 is entirely rational on short covering, the Friday rally in risk assets and the absence of any firm commitment by Saudi Arabia, Kuwait and UAE, to boost output during President Biden’s state visit to the kingdom. Apparently, the Jerusalem Declaration and fist pump diplomacy have not been sufficient to reset relations between the Biden White House and MBS. This rally is […]
Matein Khalid My strategy recommendation to my friends was to short Brent crude at or above $120 for the $65 target I got from the world’s pre-eminent oil economist/OPEC watcher Ed Morse. The short Brent idea has been a money gusher now that Brent has plunged 7% in today’s session to 99 as I write. The fall in oil prices was inevitable. King Dollar is at 20 […]
Matein Khalid This is definitely not the best of all possible Panglossian macro worlds as the S&P 500 is 20% below its January peak, growth stocks continue to get crushed on Nasdaq while credit spreads have almost doubled and Brent crude is at $114. The Powell Fed waited too long to tighten with its myopic mantra of “inflation is transitory” and has pivoted to monetary tightening at […]
