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"max bondues" Discussed on Bloomberg Radio New York
"Stanley, CIO, Lisa shallots, warning that analysts are not reducing corporate earnings forecasts in line with economic projections. Case in point, Nike shares tumbled after the New York bell, the sportswear giant offered downbeat guidance, sales and greater in the Greater China region are down 20% missing analyst estimates. Let's bring in max bondues CEO and founder. MC capital. Max, what do you make of the Nike numbers and kind of what conclusions can you draw that might kind of set the stage for some of the other earnings announcements that are going to come in the next few days? Well, the key here is really the guidance because in terms of numbers of the passport is actually not bad. But what investors are worried about is the future is the guidance. And guidance here has been clearly bleak, which has led to the correction and post market that we are experiencing now. And the fear is that you might get quite a bit of that in the upcoming earnings season. So we are basically entering the slowdown in terms of growth and in terms of companies numbers as well. And part of it is definitely still not reflected in terms of the earnings expectation. So there needs to be a further correction in terms of that with potential negative outcome with respect to the share prices before the market can really rebound on a sustainable level. Max, good morning to you. This goes to the heart of what Michael Barry has been saying, which is this slowdown at the retail end, Walmart, target, Nike, I know Nike is about China. But he talks about a bulwark effect. In other words, when you got stuff backing up at the retail level, it causes an outside impact on the wholesale level and a deflationary impulse and that he says could cause a reversal by the fed. Do you think the fed in any way are prepared to reverse? So we under assuming the slowdown, potential slowdown in inflation. The fed currently can not be seen as changing its mind once again. It's already lost quite a bit of image over the past year. The point does not, it can not allow itself to change its mind again. So the messaging is going to continue with respect to their completely focused on bringing down inflation and consequently continue hiking rates. But the key here is with respect to additional additional hawkishness, because if what they've been saying so far, that's as far as it's going to go. So that's no additional hawkishness can be seen as a little bit of dovishness. And there are four from an inflation point of view, everything that you have just pointed out at the same time, some of the commodities declining. That's likely as in line with the base case scenario that we are going to be seeing peak inflation is not going to be as much a requirement for the fed to hike as aggressively. So all of that could potentially in a best case scenario support the market point forward. Max, let's talk about the investment strategy here. Does that mean you're holding on to a little bit more cash than usual? And might actually deploy it quite soon if there is another meaningful correction in equity valuations later in July. Correct. So we're holding on to what we define as being the core of the portfolio, because that's less trading oriented. That's more on long-term perspective in terms of secular growth of the names that we like. But definitely we are more cautious than what we've been over the past few years holding on to again, 19 and 25 to 40% in cash, depending on the profiles. And we're looking to deploy that a bit more tactically. So we've deployed that about two or three weeks ago. We're now taking out some of the investments. And upon a negative moves from some of the names that we like on earnings, which could happen, then we're going to be very happy to buy that because obviously we think we're closer to the bottom than we were a few months back. We're probably not at the bottom yet, but it's getting more interesting to start deploying liquidity. Well, it certainly feels less volatile perhaps than in 2008 when it was just a straight vintage line on the way down. This is a slow continental drift of pain. To the commodity space, you look non energy, non energy commodities, and we were looking at this yesterday, copper down 16%, 10.21% last week, the westerns in the 1980s. You think that there is more pain to come on the commodity side, yeah? Absolutely, because the move we have seen over the last few months in terms of the move up has been incredibly brutal. So it's actually been extremely positive for commodities, but that has to undo itself. So it's gone ahead of itself. And a lot of that will also do to some speculative positions and not so much as the geopolitical tensions and situations only. And we're seeing that unravel and the further unraveling is yet to happen. And again, that is going to have the consequences with respect to inflation, which could potentially bring it down. And the more important part here in addition to copper revenue and everything you've mentioned is to keep a lookout on the food commodities because that's the one that can really spell travel from a social point of view if they remain elevated. And that's the one that's likely to be more sticky. Okay, but certainly if China reopens and normalizes, again, additional pressure will come to bear across that commodity complex. Max, thank you very much for being with us this morning. Pack up your cash and be safe. Max bondues CEO and finder of SG MC capital. Plenty more ahead on today's edition of