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An Epic Market Run..

Updated: Dec 19, 2023

BentinPartner Weekly

Last week brought another string of records as the bull stampede continued.


Prior to the Fed decision last Wednesday, risk assets were already buoyed by core PPI gains, showing a yoy decline (2% from 2.2% last month) on lower energy costs and by J. Yellen offering her “Treasury” guidance, saying it would make sense for the Fed to consider lowering rates.


On Fed day, the Dow hit its first record high since January 2022 after the Fed signalled that the FOMC “had discussed the pace of unwind of policy tightness” and referred to fresh dot plots, pencilling 3 rate cuts next year, essentially validating the already strong market consensus of an imminent Fed pivot. More gains were made during the press conference as Fed Chair Powell said the Fed “might but is not likely to hike further” and that “the Fed is very focused on not making the mistake of keeping rates too high for too long”.


The confirmation of this Fed pivot surprised the market to the extent that it contrasted with what J. Powell had said two weeks earlier, suggesting to some that this change of attitude likely followed a phone call or two from the White House with President J. Biden calling for rate cuts as he is now really struggling in the polls…


In any case, the Fed Chair words propelled markets higher for the whole week, getting more investors scrambling to add risks to their portfolios before year end to keep pace with a broadening rally that engulfed stocks, bonds, commodities and precious metals while the biggest loser of all this was the dollar, which dropped broadly for most of the week and into bearish trend.


This move was accelerated by ECB President Christine Lagarde who pushed back on market expectations of rate cuts in Europe, stating that the ECB did not discuss them “at all”, leading Euribor to sell off.  EURUSD extended its gains to 1% in this context on Thursday but lost most of these gains on Friday.



As most of us, I am looking forward to year end, the coming celebrations and festivities and the opportunity to reunite with family and friends.


The New Year also will give me the opportunity to take a step back, look at what happened over the past year, draw some lessons…and perhaps venture into some forecasts but I thought I would start today by offering some perspectives from E. Musk who was on tour in Italy over the week end offering his load of wisdom.


We may be no fan of Tesla and the man is not without reproach (judging from his political opponents… and the fear of advertisers trying to pull the plug on X).


Still, I found every second of this interview very much enlightening as he delivered a condensate of intelligence brought to the service of the identification and resolution (or at least well-intentioned efforts to resolve them) of many of the world profound problems that are civilizational and existential, by nature, in particular for western societies (because they are most exposed now) but also the world more broadly.


Besides the brain, speed and the wit, Musk beams an extraordinary level of empathy which makes his communication run so smoothly and convincingly.




On declining birth rates;


They are collapsing everywhere (in the west mostly and in China) This is Musk’s biggest concern as he reminds some staggering numbers (not only for China) arguing  that in three generations, the Western population (and that of China) should be 1/10th of where it stands now without policy change and that China now stands to lose 40% of its population at every generation…


All efforts must be made to make this a political priority, Musk claims, and there are some examples in Europe going in the very right direction.


On Immigration;


Immigration is presented as a solution which it is but it cannot be the only solution.

Immigration should be allowed even illegal immigration but not without filter. Migrants should somehow adhere to the culture of the country they wish to join and be in a position to be able to contribute, and be willing to espouse the culture and values (pehaps similar to the acculturation and re-culturation that has made the success of America)


On Climate change;


As a convinced environmentalist, contributing greatly to the cause with deeds more than words, E. Musk says it is a major long-term concern, more than the immediate concern.


Most of the so-called Global South does not adhere to the notion of urgency and all the numbers show that whatever Europe and the West decide to do (or actively not do), it will not make a material difference if the rest of the world (75% of the world population representing half of the world GDP and growing) does not care (that much). We must do our best, still preserving our own interest (industries, jobs…) because we cannot pull this kart on our own.


Also, the sense of constant urgency contributes to cultivate angst and a culture of guilt and defeatism (especially among the youth) at the time of their life when they should be hopeful, motivated, ambitious and with a fighting, not a defeated spirit.


Europe should also start thinking about saving itself first and stop believing it is in a position to lecture or project or erect itself as models of pretended virtue (the rest of the world has already stopped listening in many ways…)  that are only self- defeating and also the result, to a large extent, of a “suicidal ideology of evil” (see Musk opinion on the wokism).



On wokism;


His advice for Italy and Europe is to not import the ideology of wokism from the US.


Seemingly, he may not be aware how deep this ideology has already penetrated the European society. It is present in most centres of education (from kindergarten to universities) of economic and political (especially the unelected ones) power which is imposing indoctrination in various and subverted (but not that subtle) ways to people who for the vast majority, oppose this ideology but are not in any position to openly fight it without facing soft or hard cancelation risks.


Musk has obviously understood that the only way people can cast out wokism is with their wallet. The “Go woke go broke” antidote was best illustrated by what happened to the brand of Budweiser (destroyed) and increasingly also that of Disney which E. Musk is now confronting head on.


Only one thing is more powerful (in a still capitalistic orientated society) than ideology: money. All apostles of wokism need to be paid somehow and money cannot (or at least should not and will not always) be printed out of thin air if they are not conducive to support business.


The second way people can play a role to fight an ideology they dislike (as long as the system remains democratic) is in the secrecy of the voting booth. They can vote “against” those not seen supporting their interest or their dislike of an ideology (without running the risk to be fired or cancelled) that they consider as toxic, divisive and ultimately self-destructive. This, of course, bears some risk as well to the extent that being anti-woke is not and should not be the only political consideration but if the polarisation is strong enough, it might suffice to also …make suboptimal political choices.


The Netherlands were in Europe a first case in point of serious political alteration resulting from fatigue on the local (but broadly prevalent in Europe) extreme climate agenda. In the Dutch case, putting the blame of climate warming too narrowly squared on “cows” by forcing a closure of a countless number of farms (with the active financial support of the European Commission) was a “funny enough” decisive factor.


In this interview, Musk did not touch the very hot topic of what is happening in major US universities (which I think is a very big deal generally and obviously in particular in the fight against wokism).


History shows that what happens at universities is often seminal for major societal and political changes. We may be at one of these moments.




Over the past week, the S&P500 gained 2,0% (22,7% YTD) while the Nasdaq100 rallied 3,4% (52,2% YTD, Z-score 2,3). The US small cap index rallied 5,5% (13,0% YTD, Z-score 2,1). AAPL gained 1,0% (52,1%).

The Equally Weighed SP500 rallied 3,9% (10,7% YTD), outperforming the S&P500 by 1,9%. The median SP500 YTD return closed the week at 7,9%.

Cboe Volatility Index dropped -0,6% (-43,3% YTD) to 12,28.

The Eurostoxx50 gained 0,7% (23,9%), underperforming the S&P500 by-1,3%.

Diversified EM equities (VWO) rallied 2,1% (5,4%), outperforming the S&P500 by 0,2%.


The Dollar DXY Index (UUP) measuring the USD performance vs. other G7 currencies dropped -1,3% (4,6%) while the MSCI EM currency index (measuring the performance of EM currencies vs. the USD) gained 1,0% (4,0%).


10Y US Treasuries rallied -31bps (5bps) to 3,92%. 10Y Bunds dropped -26bps (-56bps) to 2,02%. 10Y Italian BTPs rallied -35bps (-99bps, Z-score -2,1) to 3,72%, outperforming Bunds by   -9bps.

US High Yield (HY) Average Spread over Treasuries dropped -24bps (-133bps, Z-score -2,4) to 3,36%. US Investment Grade Average OAS dropped -5bps (-38bps) to 1,05%.

In European credit markets, EUR 5Y Senior Financial Spread dropped -7bps (-31bps, Z-score -2,4) to 0,69%.


Gold gained 2,0% (10,8%) while Silver rallied 4,6% (-0,4%). Major Gold Mines (GDX) rallied 4,3% (8,0%).


Goldman Sachs Commodity Index gained 1,1% (-5,7%). WTI Crude gained 0,7% (-10,5%).



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Marc Bentin serves as Economic Advisor to Blue Lotus Management,

a specialist multi-manager investment firm, which seeks to provide investors a compelling alternative to the traditional 60/40 equity and bond portfolio by targeting higher returns without amplifying equity risks.

BentinPartner GmbH is Advisor to the Phi Funds AIF, an umbrella Alternative Investment Fund registered and regulated in Lichtenstein, specializing in the management of Funds focused on physical precious metals.


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