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“Protectionist trade policies as the US does, I think this is a downside risk to growth and upside risk to inflation.” – 03:03

Remy Blaire welcomes Elias Haddad, the Global Head of Market Strategy at Brown Brothers Harriman, to discuss the current volatility in the financial markets as the week comes to a close. The segment opens with Remy highlighting the fluctuating equity averages, which have been swinging between red and green due to trade tensions and concerns about bad loans from regional banks. Despite the release of earnings from major banks, some bank stocks have experienced significant sell-offs, prompting investors to reassess their positions.

Elias shares his perspective on the recent credit worries, suggesting that they appear to be more of a due diligence issue rather than indicative of a systemic problem. He cautions against complacency, noting that the market is currently frothy, with both stock and corporate bond prices being expensive. Elias anticipates a potential correction but believes that this situation could lead the Federal Reserve to adopt a more dovish stance, especially given the fragile labor market and concerns about corporate profitability due to higher tariffs. He posits that such a pivot by the Fed could trigger a rally in equity markets, despite the current concerns in the credit market.

The conversation shifts to the upcoming Federal Reserve rate decision and the significance of the Consumer Price Index (CPI) figure set to be released next Friday. Remy and Elias discuss the implications of ongoing trade tensions, with Elias explaining that protectionist trade policies pose downside risks to growth and upside risks to inflation, which are detrimental to the U.S. dollar.

As the discussion progresses, the focus turns to gold, which has recently seen a remarkable surge, breaking above significant price levels. Elias expresses his enthusiasm for gold, referring to it as “God’s currency.” He attributes its rise to declining real interest rates, fiscal concerns, and central banks diversifying their reserves into gold, particularly in light of geopolitical uncertainties.

“I think in the long run, it’ll go higher because I don’t think anybody trusts the U.S. anymore.” – 04:02

Ted Oakley, Managing Partner and Founder of Oxbow Advisors, joins Remy Blaire to discuss the current state of the U.S. equity markets and broader economic trends. The conversation begins with an overview of the recent performance of major U.S. stock averages, which have reached new records this year. Remy notes that a small group of mega-cap companies, particularly the MAG 7, has significantly driven these gains, while strong deal-making has bolstered major banks like JPMorgan Chase and Goldman Sachs.

Ted highlights the concentration of wealth within the top companies, explaining that the top 10 firms account for approximately 42-43% of the S&P 500. He cautions that this lack of diversification poses risks for investors, especially during market pullbacks. As the discussion progresses, Ted expresses his concerns about the market being overpriced and emphasizes the importance of safety in investment strategies. He reveals that Oxbow Advisors is currently holding a substantial amount of U.S. Treasury bills rather than bonds, as they aim to mitigate duration risk amid rising inflation expectations.

The conversation shifts to the performance of gold and silver, which have seen significant increases year-to-date. Ted shares his long-standing commitment to gold and mining stocks, suggesting that gold is likely to continue its upward trend over the next three to five years. He attributes this potential growth to a general lack of trust in the U.S. dollar and the use of gold as a currency hedge.

Ted also discusses the mining sector, explaining his preference for investing in larger mining companies over junior miners, which require extensive research. He mentions that Oxbow Advisors has invested in royalty companies, allowing them to benefit from mining operations without the associated risks of managing mines.

“What that should show us is that the impact of tariffs is starting to show its weight on people’s ability to pay their bills.” – 01:09

Peter Tuchman, Senior Floor Trader at TradeMas, joins Remy Blaire to discuss the tumultuous week on Wall Street. The episode opens with Remy highlighting the rollercoaster nature of the markets, driven by a mix of earnings reports, trade tensions, and emerging fears surrounding credit fraud, particularly affecting regional banks.

As they delve into the current market conditions, Peter outlines three critical factors influencing the trading landscape: ongoing trade talks, the state of regional banks, and the latest earnings reports. He emphasizes the contentious narrative between the U.S. and China, particularly regarding tariffs on commodities such as soybeans and rare earth minerals, which has created a charged atmosphere impacting investor sentiment.

Peter expresses concerns about the fragility of regional banks, drawing parallels to the recent Silicon Valley Bank crisis. He notes that the impact of tariffs is beginning to affect consumers’ ability to meet their financial obligations, leading to increased delinquencies. This situation contributes to a growing sense of unease among investors regarding the stability of regional banks.

The conversation shifts to the VIX index, which, despite a recent decline, remains elevated, indicating ongoing volatility and fear in the market. Peter explains that while larger banks may appear stable, regional banks provide a more accurate gauge of economic health in middle America. He underscores the significance of bank earnings and the guidance provided by these institutions, which can offer valuable insights into the overall economic climate.

“Bitcoin’s correlation to equities is higher than normal and its correlation to gold is lower than normal.” – 03:03

Andy Baehr, Head of Product at Coindesk Indices, joins Remy Blaire at the New York Stock Exchange to discuss the recent upheaval in the cryptocurrency market, triggered by rising U.S.-China trade tensions. The discussion begins with a significant sell-off in Bitcoin and altcoins that occurred last Friday, resulting in over $19 billion in leveraged crypto bets being liquidated within a 24-hour period. This event affects approximately 1.6 million traders, although the actual number may be even higher. Remy highlights the unique operational challenges of the crypto market, such as limited liquidity and a rush of traders attempting to exit, which intensified the selling pressure and led to rapid declines in coin prices across various trading platforms.

Andy shares his recent experiences from a trip across six cities in four countries in Europe, where he engaged with a diverse array of investors, including long-term investors, family offices, and asset managers. He notes that the investment case for Bitcoin is becoming increasingly solidified, with many investors already allocating a portion of Bitcoin into their portfolios. The conversation also touches on the growing interest in stablecoins and tokenization, as investors seek to understand how Layer 1 blockchains like Ethereum and Solana can enhance their investment strategies.

Remy and Andy discuss the differences in the crypto landscape between Western Europe and the UK. While most of Europe has had exchange-traded products (ETPs) for years, UK retail investors have only recently gained the opportunity to invest in Bitcoin and Ether ETPs following the lifting of a ban. This timing, coinciding with the recent market sell-off, could present a unique entry point for UK investors looking to add these assets to their portfolios.

As they analyze the market action from last Friday, they note that Bitcoin’s correlation to equities has increased, while its correlation to gold has decreased. This shift raises concerns for Bitcoin, as it has been following equities down as a risk asset. The unexpected decline in the equity market contributes to the fragility of the crypto market, leading to the significant liquidation event. Despite the chaos, Andy points out that the market managed to recover somewhat, although the $20 billion in liquidations has left it feeling precarious.

Remy and Andy discuss the lessons learned from this liquidation event, emphasizing that such occurrences are not uncommon in both equities and crypto markets. After a period of positive news and adoption, the market can experience pullbacks, which may present buying opportunities for those willing to take the risk. Currently, Bitcoin is hovering around $110,000, down from its recent all-time high of $126,000, while Ether and other Layer 1s have seen a 20% decline. Andy advises listeners to prepare for potential volatility in the coming weeks and highlights the need for a new catalyst to restore positive momentum in the market.