Priced for Perfection: Has the Reflation Trade Gone Too Far?

Real Vision: Finance & Investing

Real Vision

Investing, Business News, News, Business

4.1 • 1.1K Ratings

🗓️ 26 March 2021

⏱️ 34 minutes

🔗️ Recording | iTunes | RSS

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Summary

DB-Mar25,2020. Real Vision managing editor Ed Harrison welcomes to the Daily Briefing Amanda Agati, chief investment strategist of PNC Financial Services Group, and Marc Chandler, chief market strategist at Bannockburn Global Forex. Agati shares her view on U.S. equity valuations, noting that stocks might have run too far, too fast amid reflation optimism, and Chandler argues that market performance will ultimately hinge on liquidity conditions, making the long-term case for why the dollar could be approaching the end of its bull cycle as twin deficits weigh it down. Agati also highlights that there is much opportunity in both the debt and equity of emerging markets, noting serious composition changes with the various indices. Lastly, Agati and Chandler share their views on bonds and credit. For our Listeners : Checkout skillshare.com and learn a new skill. You can use a unique promo link skillshare.com/realvision Protect your portfolio and join 130,000 members by signing up at masterworks.io with promo code REAL VISION today to skip the waitlist. See important information at masterworks.io/disclaimer Checkout Jordan Harbinger Show @ https://www.jordanharbinger.com/ Learn more about your ad choices. Visit podcastchoices.com/adchoices

Transcript

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0:00.0	C'modity is down. Also bonds up, but stocks also down. That's the tone of the market today.
0:20.0	We're taping relatively early for the real vision daily briefing. I've got Mark Chen,
0:24.6	their chief strategist at Bannockburn, global with me, and also Amanda Agati,
0:29.6	who's a chief investment strategist at P&C Financial Services Group. Welcome to real vision,
0:35.1	or welcome back, I should say. Thank you. It's great to be here. Thanks, Ed. It's always good to see you.
0:42.3	Yeah, it's great to see you guys. Even though of course, Mark, I see that you're wearing a tie.
0:46.5	Neither Amanda nor I are wearing a tie, so I'll give you a pass on the old school tire.
0:56.9	Thank you, Jack. Look at the formalities. If it means anything, I've got sweatpants on too.
1:03.6	Excellent. Well, you heard my introduction there, Mark and Amanda. Let me tell you how I'm
1:09.9	thinking about this is that in January, timeframe, I was looking at the markets, and when I looked
1:17.6	across different asset classes, generally speaking what I would call the tone was a reflection trade.
1:25.1	But the tone that you see today in today's market with WTI and Brent off 3%, 4% actually now
1:31.9	that I'm looking for WTI. You have commodities down, you have equities down, but you have bonds
1:39.0	rallying. It almost seems like it's the opposite of the reflection trade. As if the reflection
1:44.6	trade is taking a pause. Let me ask you first, Amanda. What are you seeing? What are you thinking about
1:51.7	that mix? Well, we really think that this market has moved too far and too fast. If you think
2:00.1	about when this reflection trade really kicked off, it was right after or in the midst of the Pfizer
2:06.0	vaccine, efficacy news back in November. The market has just absolutely been on a tear since then.
2:12.8	The real disconnect for us is this distinction between a sentiment shift, which is really what we've
2:18.6	seen, and a lack of fundamental follow-through or fundamental improvement. The market, of course,
2:24.9	a discounting mechanism rallying on the hopes and the assumption that we're going to get right back
2:30.9	to pre-COVID, pre-pandemic norms. Of course, we all know that it's a long-strange trip yet to get
	...

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