Apr 23, 2019
Chris Stanton, partner and chief investment officer at Sunrise Capital Partners, sat down with host Nathaniel E. Baker to discuss risks facing markets and the economy.
On the surface, the investing environment looks rather benign, with solid employment and consumer data easing recession fears. But the 2019 recovery in risk assets is at an important juncture. As the market looks for a catalyst that could lead to a "melt-up", pockets of risk are accumulating.
The chances of a significant liquidity event akin to the "taper tantrum" or even the 1987 crash are rising. Stanton tells listeners what to look for. The Russell 2000 Index may hold one clue...
03:03 - What are the Fed's options yields on the 10-year go to 3%?
05:40 - The upcoming "pivot points" that could lead to big corrections.
09:10 - The sell-off in bonds and ineffectiveness of Fed policy.
11:05 - Could the market be underpricing a liquidity event? The S&P "looks an awful lot like a spread triple top."
16:05 - Liquidity events, and the corresponding spikes in volatility, are becoming more frequent.
17:30 - Stanton discusses his background and Sunrise Capital's approach to investing.
21:40 - "The physics of markets." Risk is accumulating and the increasing likelihood of a selloff akin to what happened in the fourth quarter.
35:00 - The market continues to be Fed-dependent. A problem as it appears to be losing confidence with the current Fed chairman.
37:00 - The case for active management.
This podcast was recorded on Monday, April 22, 2019.