Ok, so there’s no baseball cap or red tie. Not even a Trump wig. But hold your heckles, because this is the first attempt we’ve seen at capturing, graphically, the progress being made towards Making America Great Again.
Also, more importantly, it’s from Michael Hartnett — he of Thundering Word fame and chief investment strategist at BoA Merrill Lynch…
You’ll need Merrill to explain that grey stain a bit further:
MAGA 10yr range = 25th & 75th percentiles of average changes in US small business confidence, average hourly earnings, housing starts, and commercial & industrial loans. Post US-election level = average of data since Nov’16 scaled to 100.
So America is off to a good start, on this measure at least.
This is one of 12 charts accompanying three investment calls from Harnett on Thursday.
On asset allocation…we say long stocks, real estate, commodities & USD, short bonds on higher 2017 growth, inflation & interest rates.
On the rally…we say stay long the “Icarus trade” until hubristic Positioning, complacent Profit expectations, hawkish Policy signal big top in risk assets; Icarus targets are SPX 2500, oil $70/b, GT30 3.5%, DXY 110, all before Memorial Day.
On inflation…we say further rotation from Davos Man portfolio to Joe Six-Pack portfolio likely as deflation, monetary stimulus, globalization ends and inflation, fiscal stimulus, economic nationalism begins.
More in the usual place.