Navigator.
Investment Conclusion.
This is the year capital will leave the US. The US will be increasingly isolated. The US$ will have a serious leg down as a reserve and trade currency. The cost of this will be borne by the US economy and financial markets.
- The anecdotal evidence is that de-dollarisation of the global economy is accelerating – particularly driven by China.
- China will emerge the winner and its fortunes will lift nearly all Asian boats.
- Russia will attack Europe kinetically as the US scraps NATO. President Trump will continue to align with Putin. The markets do not reflect what this means for risk. So beware!
- Japan: Takaishi’s election gamble in Japan will not work. JGBs may like that but equities will fall.
No asset allocation change in Wealth Preservation Portfolio (see below). •
- Long gold and copper. •
- Short oil (Brent). •
- Stay short US & Japanese equities and long EM Asian equities. Neutral European equities. •
- Short US$. Long SGD & AUD•. Neutral EUR..
- Short 10yr Treasuries; EU sovereign debt (France 10 yr OATS) and 10 yr JGBs. •
- Long defence and shipbuilding globally. But a short Container Liner positon has been added in anticipation of a collpse in container rates as suez reopens (see Shipping section). QS cannot advise on individual stocks.
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