In this Stockhead series, investment manager James Whelan from VFS Group offers his insights on the key investment themes and trends in domestic and global markets. From macro musings to the metaverse and everything in between, Whelan offers his distilled thoughts on the hot topic of the day, week, month or year, from the point of view of a professional money manager.

Good afternoon all,

And so I start the four-week wind-down of my time at VFS. It’s been an amazing time here and we’ve been able to achieve some brilliant things together. The feel of grass growing under the feet does occasionally move into the front of consciousness and so it is time to take the leap. More updates later but thanks to the team for all they’ve done.

Now back to business

We have a new RBA governor on the way and there’s no surprises there, maybe only in the name.

It does let Labor control the narrative that “their” person is going to be the one to ease the pressure while the last guy was the one that was trying to make us all broke.

Either way we are still at or near the top of the hiking cycle so things should be easier from here.

Interesting to think that an “independent RBA” board can easily be stacked by the government of the day. Not sure how independent that is…

Inflation in the US

The US has apparently turned the biggest corner possible and reined in inflation, mostly.

I couldn’t possibly put these things together any better than in the thematic webinar I hosted last week.

It has the charts you require and is visible here but the most telling one, which I posted before the US CPI dropped, was this one. It’s about shelter in the US which makes up 35-40% of US CPI numbers:

It’s clear that one of the biggest drivers of inflation is on the downwards turn.

Congratulations, folks. We did it. (They did it.)

Funny to think that with all the bearish charts and sentiment we could see some of the best days in the States and here, proving why it pays to stay invested.

China at the same time appears to have turned the corner on their policy moves, with this headline:

…which lasted a solid day in the headlines and assisted markets to carry on in an upwards direction.

US has inflation beaten back so it’s off to the races there

Aussie bullishness on similar theme, new RBA chief, China potentially stimulising

USD dropping for the above reasons in the US so commodities are rallying, Gold & silver etc.

China being China

In fact… what if… just what if…

Buy Everything Again?

Think about it… However, don’t count on China for a smooth rebound of the economy. I have a feeling this one’s going to be stimulus driven. Policy led.

Keep the faith that China will eventually get to where they need to go the only way they know how:

  • Brute government force
  • Faking the numbers

Aside from that we may be in the sweet spot for markets, so enjoy it while you can.

More updates later.

All the best and stay safe,