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Mar 15, 2022

Good morning!

It’s here … “Fed Day.”

Team Powell is widely expected to begin hiking rates despite it all. The markets, meanwhile, are not put off one iota. In fact, FOMO seems to be at hand in the early going.

Here’s my take at the opening bell with the fabulous folks at Cheddar. (Watch)

Here’s my playbook.

1 – China: “I want no piece of this”

As I suspected may be the case, China threw Russia under the bus saying last night that it will steer clear of US sanctions over Russia’s invasion of Ukraine. (Read)

China, of course, made sure to state that it “always opposed the use of sanctions to solve problems, and even more opposed unilateral sanctions that have no basis in international law.”

Never mind all that pesky intellectual property theft that has no basis in international law either!

2 – Do I hear 25bp? … going once, twice …

Many people a lot smarter than me saying "no way" JPoww hikes more than 25bp. Others are emphatic about 50bp. Still more believe less.

I get where they’re coming from but I learned a long time ago that there are no absolutes when it comes to markets.

Fat tail risk, however slight, exists. Technically speaking there’s a 99.8% prob of 25-50bp hike as of this morning.

Now, let’s hope that JPow doesn’t do something stupid or say something worse. Fed officials – you know the ones always quoted anonymously – have been strangely quiet which gives me pause.

3 – Hydrogen power could end oil crisis faster than you think

The world’s attention is on oil and EVs but I think there’s a good case to be made for hydrogen power. And some surprising investments to go with it. (Read)

We’ve been well ahead of this in One Bar Ahead™ for some time now and I’ll be sharing some additional insight with subscribers in the next issue. (Don’t be late to the party if you’re interested)

4 –$400 billion reasons to take tech seriously

There are loads of people who continue to hang on to conventional investing wisdom even though it’s increasingly outmoded and downright damaging to their portfolio. Especially when it comes to tech and social fancy.

TikTok's parent company ByteDance is reportedly worth $400 billion which is on par with WMT, JPM, and XOM just to name a few.

It’s not public which means you have to buy in through private equity firms that own ByteDance stock including KKR and SoftBank among others.

Digitalization is the largest single investing trend of our lifetime and will remain so for the next decade at least.

5 - Winner takes Ukraine

I’ve seen some strange things over the past 40+ years I’ve been involved with global markets but seeing Elon Musk throw down the gauntlet to Vladimir Putin over a wrestling match takes the cake. The winner would apparently take Ukraine.

No word from Putin himself in response yet but Dmitry Rogozin who heads up Roscosmos called Musk a “little devil” and said to compete with him. Meanwhile, Ukrainian Vice Prime Minister Mykhailo Fedorov has started a fundraiser to send Putin to Jupiter. (Read)