In this Stockhead series, investment manager James Whelan, managing director Barclay Pearce Capital Asset Management, 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 morning all and it’s my sad duty to inform you that it is, in fact, not coming home.
Which is good because no one wants to see me in my Union Jack suit and tie.
One day… but not today.
Bullet dodged.
Ed: Oops wait…
Via James Whelan
We picked…
Speaking of dodging bullets we had Trump as a lock for the presidency since late last year.
Then after the Joe Biden debate performance more people got onboard that fast-moving train.
And now…
I think it’s so over that the Dems won’t even bother switching out Biden. Anyone who runs is going to lose.
On the record…
Saying that, I cannot stand the guy, but you have to respect the flair for the dramatic.
Imagery for years
Pic via Getty Images
Tee off
There’s an anecdote doing the rounds now that he still made his 9am tee time the next day. One of the cart boys posted that they were attached to his group, he sunk a 20 footer on the 9th and said something along the lines of “that’s the difference between me and the shooter…I don’t miss”.
You’ll see a lot of those stories over the coming days.
What it means?
Don’t stop the music on bullish markets.
Two, maybe three rate cuts by the Fed into a Trump Presidency that is ready to take the reigns on Day One instead of blathering around not knowing how the printers work like in 2016.
Business friendly, anti-China to some extent again, with tariffs kicking back up a notch.
What people missed the first time is that he’s not a war-time guy.
However, I do believe he’ll push NATO to spend more on US arms and with Boeing exorcising all their demons (eventually) we think that BA could be a decent, albeit controversial, pick.
Here’s a look at a weekly BA chart via Trading View, back to pre-Covid days (below). Funnily enough, based on what Boeing has been through these last few whiles you’d think the chart would be in much worse shape. Robust.
Plenum time
I do love a good plenum and this iteration of the five-year Chinese Central Committee planning meeting is tipped to be quite bullish.
I’m happy to be long iron ore and its derivative names (where appropriate) going into the week and beyond.
I am happy to do the same with copper.
From the FT
Via FT
A 25% increase YOY on Chinese investment to power grid projects just in the first quarter this year.
Read it again
We are also seeing more signs of the M&A activity predicted in copper markets recently.
This…
Aaand this…
Are just two examples.
Finally
Own copper.
Own copper companies.
Hold on as long as you can. Global X has the WIRE ETF, which is a handy way to own copper companies.
Small caps
After the end-of-year rulers were run over the different factors, it was decided that small cap value was the worst place to put your money. Or something close to that. Smalls have done badly. And then, just like that, the squeeze was on.
IWM (the US Small Caps ETF) closed at its highest level since Jan 2022 on Friday after having two ripping days.
Under-owned assets that do well in rate cutting environments? Sounds like small caps to me.
Also whenever the smalls out perform large caps by over 3% it’s wildly bullish for markets.
Observe..
Via Carson
Speaking of small caps
Our Australian Investment Summit has been and gone in London and by all accounts was a wild success. There was a capacity crowd of fundies and investors there to see some fine Australian names with short and long term LSE listing ambitions.
My own favourite that we own in size is Wellnex Life (ASX:WNX) and they presented beautifully regarding their impending dual listing in London. Of note was this small section of the slide show that I think has been underplayed…
Pay attention to what happens on this dual listing as we should see a rush for other companies to do the same if it does work for them.
Impact Minerals update
I also sat down with Mike Jones, MD of Impact Minerals, to talk about their latest news on the High Purity Alumina asset progress.
Catch that podcast > here.
It was lots of fun, too – something about dressing gowns, small caps and plenty on plenums.
Stay safe and all the best,
James
The views, information, or opinions expressed in the interview in this article are solely those of the writer and do not represent the views of Stockhead.
Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article.
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