The Northern Highlights

Something will get worked out in Middle East, this administration can tolerate a higher 10Y (debatable too) but they can’t tolerate a pickup in bond vol as that breaks things & last week we finally saw quite the pick up. Hike expectations are way over skis, & largely baked in (We’re pricing in another 2 hikes by year end & another 2 in ‘27; this isn’t a hiking cycle and another ‘22 and this is a fade); short term investment inflation from AI will shift to disinflationary tailwinds, & the Fed will use that to have a hold / easing bias in ‘27 (although maybe midway through and think you have to front run by starting to postion now and into early ‘27; again maybe I’m wrong but just my thinking); recently have been averaging in to duration sensitive names as think many in the group are already trading at trough earnings & on a snapback in bonds, lot of alpha to be made, especially since up quite a bit on the year & haven’t drawn down in this recent mess so can afford to take the risk here, hypers & semis will go up together (this is just like March, war in forefront but a ton of AI acceleration in backdrop) but definitely think hypers are the bigger no brainer to be overweight; own some miners for when oil comes down as margins will shoot up etc…