Julian, your forward indicators are showing a continued slow down in the United States which I agree with. My question is in regards to flows and earnings moving forward. Wallstreet seems to think this is a shallow slow down in earnings and I think what isn't being priced in is the legitimate possibility of an earnings recession in 2019. If earnings go from being more than a slow down and a profit recession develops, what do you think that means for buybacks the remainder of the year? Looking over your flow info it seems like buybacks are responsible for a big chunk of this move since Dec. is it realistic to assume a profit recession will take the fire power out of buybacks the rest of the year and we are left with a more clear picture of what kind of demand there really is for stocks?

Hi Julian would you mind commenting in future how you see the different scenarios impacting real estate? And I don't just mean Connecticut villas but also standard 2-3 bed flats in good city locations that I think the millennial population of MI will be interested in. I've been very positive on real estate where I live (tier 2 UK city) and been right for now but am particularly scared about the impact of potential higher rates (politics headwinds to me are an absolute given but also somewhat discounted). Many thanks for your insights

Simply brilliant! But I don't see any noticeable movement in USD and yields. To make a reflation trade, maybe it would be better to short USD, EUR, JPY, CNH (and gold) against any reflation instrument one prefer after research.

The equity rally from the Dec lows have been incredible. In your opinion and after listening to the fed min from April’s tone, do you believe the feds lack of dovish tilt in April’s minutes has Powell a little nervous as to a speculative bubble the fed is helping induce? Is it possible Powell is getting nervous about the excess he is perpetuating since the Dec fed putt and maybe he wants to attempt to cool it down?

Great summary ...agree with everything here.... the path of least resistance seems to be most likely reflation running to major inflation... Could also make for a hell of a stock market run over the next few years..

Nice 1 Sherlock

Fantastic Julian!

Just doesn’t seem like things are set to break in either direction yet. US financial conditions have continued to ease, and not really because of equities. Mortgage rates are down ~80 bps from Jan levels and HY spreads are down by ~50+ bps from the start of the year. The growth outlook in the US and China looks set for relative mediocrity, and both are eating Europe’s lunch for different reasons. In other words, both are holding up half of the sky, and much of ROW is wallowing below in the mud. This can go on for a long time, much as I would like a big dislocation to force a major repricing. Powell will not be in charge of this. The institutions behind the extra USD ~4 trillion in mobile capital hanging out in the US with nothing better to do, for now, will collectively determine the outcome IMO.

Super thumbs up!

I think you guys need to get more political. All this is all very well, but what about the Eurodollar? And can you talk more about what's going on with Deutsche Bank? These policy manouevres are being increasingly directed by political prerogatives and I think Raoul has indirectly referred to this in the past but the issue with the USD is far broader than you've implied or explained thus far.

Here's an example: when is anybody going to confront the reality of a second Trump term after Mueller, and what they means for the China relationship and thus the USD? Nobody, also, is talking about what Mueller means for mainstream media. You guys are constantly shit talking about disrupting financial media. Hullo??

Have you actually seen what's going on in Paris right now? And mainstream media ignores it in favour of reporting Macron's arrogant verbal diarrhea? This is full-on police thuggery and insurrection. I think Deutsche Bank is absolutely critical and nobody's saying a word. It's like none of this is actually happening. instead we get this nonsense about the Fed. This is the type of situation that goes along for a while, and then suddenly the entire world shifts on its axis. Something happens. I think something is about to happen.

Farage has tapped into a deep and longstanding vein of public anger that is shared right across the West. I think there are a lot of people looking for a fight these days. The police get it. The politicians don't.

We just had a reporter assassinated in Derry by teenagers. That was a targetted killing, looks like, although the police won't say so. And it occurred while Pelosi was in Dublin, poncing about next to the grinning idiot Varadkar. Remember the little green men of Ukraine? There are things going on in Europe now that I think are extremely concerning. Pity the police, and don't blame them when they start distributing skull fractures.

Financial conditions are getting eased as real rates have fallen since last winter. Market implied real rates are where they were in 2017 when Dudley kept telling “Financial conditions eased”. This risky asset rally have showed real rates are below natural(or neutral) interest rate. As long as market rates keep suppressed by recession fears without any meaningful commodity price retracement, risk asset rally will be going on, I believe. Dovish pivot from the Fed will support low interest rates of the short end of the curve while inflationary pressure keep pushing up long end of the curve with still expansionary fiscal support. But I am concerned that coming inflationary pressure will end this risk rally badly.