All Weather Portfolio

Liquidity leads. Credit confirms. Positioning amplifies. The Letter tracks regime transitions through cross-asset signals. Scorecard updated twice monthly ↓ allweatherportfolio.substack.com #Macro #FinancialConditions #CreditMarkets

@MikeZaccardi @AugurInfinity Inflation is no longer a purely domestic cycle. Global bond markets are increasingly transmitting fiscal stress, energy shocks, and sovereign repricing across borders through yields and financial conditions.

US breakeven inflation rates likely being dragged higher by global yields.. imagine how the US inflation outlook would appear if UK and Japan were under control... h/t @augurinfinity

@Brad_Setser China’s capital pressure matters less in absolute size than in what it signals about domestic confidence, private wealth behavior, and the durability of the post-property growth model.

Equity outflow from China last year was $ 200b. Big but not unmanageable. Relative to GDP, nothing like the flow out of South Korea 1/

@LukeGromen Since 2014, long-duration Treasuries have struggled not only in USD terms, but even more dramatically in gold terms. That divergence increasingly reflects a structural shift in global reserve preferences and confidence transmission.

TLT in USD terms since global Central Banks stopped buying USTs on net in 3q14 (blue). TLT in gold terms since global Central Banks stopped buying USTs on net in 3q14 (red).

Liquidity transmission remains supportive. But broader macro confirmation still depends on participation across credit and cyclical assets.

Fed reverse repo balances continue declining while financial conditions stabilize. Liquidity stress transmission is easing beneath the surface, but broader confirmation across credit markets still matters for regime durability. #Macro #CreditMarkets #Liquidity

@ChrisShepherd16 @charliebilello Policy rates may be stable, but long-end yields, refinancing costs, and real rates have all moved higher. Markets can rally for a while even as transmission underneath gradually tightens.

@AllWxPort @charliebilello "tightening financial conditions"? Acc to Jim Paulsen, the current bull has existed under the most restrictive Fed policy in post-war history. The Fed is unlikely to raise rates. More likely to cut. If inflation stays hot throughout summer, I will "mea culpa"

The 16% gain in the S&P 500 over the last 6 weeks is the 11th biggest 6-week gain for the index since 1950. What's unique about this rally? It's the only example in the top 20 that did not occur either during a bear market or soon after a bear market low.

@ChrisShepherd16 @charliebilello Fair point on the latest II reading. The bigger signal is the divergence between resilient equity positioning and tightening financial conditions underneath.

@AllWxPort @charliebilello Not sure where you found this info. FYI, per Wed's (5/20) Investors Business Daily sentiment page, the latest Investors Intelligence Bulls are 48.1% and Bears are 21.1%. Given the S&P is up 8 weeks in a row, this is a low number for Bulls. I'm bullish 'til at least July 20th

Transmission into credit usually happens with a lag. That’s the regime risk markets are watching now.

WTI continues accelerating higher. HY spreads remain relatively contained. The energy shock has not fully propagated into broader financial conditions yet. #Macro #EnergyMarkets

@charliebilello The market is pricing liquidity resilience while households continue to signal economic fatigue. Divergences like this can persist longer than expected, but historically they matter most once labor markets and credit conditions begin to weaken together.

The S&P 500 is at an all-time high while Consumer Sentiment is at an all-time low. We've never seen a gap this wide between Wall Street and Main Street.

@jackprandelli @SantiagoAuFund Energy geopolitics increasingly depends less on reserve size alone and more on technology access, infrastructure depth, financing capacity, and export integration across the global system.

🛢️top 5 world’s largest shale oil reserve 🇷🇺 Russia: 74.6B barrels, technology locked out by sanctions 🇺🇸 United States: 74.4B barrels, advanced development, accelerating 🇨🇳 China: 32.2B barrels, initial production, cut off from Western services 🇦🇷 Argentina: 27.0B barrels, Vaca Muerta, commercial development 🇱🇾 Libya: 26.1B barrels, early development, political instability Russia and the US have virtually identical reserves. The difference is everything after the geology. The US built the technology, the supply chain, and the capital markets to unlock it. Sanctions have now locked Russia out of the Western oilfield services it needs to do the same. China at 32.2 billion barrels faces the same problem differently developing tight rock at scale requires exactly the Western technology Beijing is being decoupled from. Argentina's Vaca Muerta is the most interesting number on this map. 27 billion barrels in commercial development, US operators moving in, infrastructure catching up. A major oil exporter in the making. The shale revolution wasn't about finding the oil. Every major economy has the oil. It was about building the industrial system to extract it cheaply, at scale, repeatedly. Only one country has fully done that. Do not miss my latest article on the big oil bet in Argentina. Link in the comments 👇

@MikeZaccardi Persistent inflation did not stop equities. Liquidity, earnings concentration, and passive flows mattered more than the inflation narrative itself. Markets respond to transmission, not headlines alone.

The CPI rate has been above the Fed's 2% target for 62 straight months. The S&P 500 has returned 106% over that stretch.

The dollar remains one of the clearest global financial conditions signals.

EM assets are responding to easing dollar pressure. Weaker dollar conditions historically improve liquidity transmission and support EM risk appetite with a lag. The rotation signal is becoming clearer. #Macro #Liquidity #EmergingMarkets

@Rory_Johnston Headline relief rallies in oil rarely erase the underlying transmission pressure. Energy volatility is becoming the macro signal, not the noise.

Crude prices have reversed their latest headline optimism-driven selloff. As you were.

@LynAldenContact Consumer sentiment is collapsing while equities keep pricing a soft landing. That divergence usually matters more than the headline index itself.

Man, today's print in US consumer sentiment is brutal.

@ChrisShepherd16 @charliebilello AAII bears are at 30.8% this week, so the bull-bear spread is elevated more because of rising bullishness than extreme bearish capitulation.

@AllWxPort @charliebilello do you have the bears... or the bull/bear ratio? 59 is getting up there but if the bears are at 30, it's fine.

@JavierBlas Persistent negative pricing usually signals infrastructure stress, not weak demand. Waha gas below zero for 75+ days is a transmission failure between supply growth and transport capacity.

When commodities are free - American gas edition: Natural gas at the Waha hub (West Texas) has traded at negative prices for >75 consecutive business days. Has any other commodity traded in any significant pricing hub **consistently** at sub-zero levels for such a long period?

The NASDAQ 100 vs Equal Weight S&P 500 spread is widening again. Concentration leadership remains the dominant regime signal beneath headline index strength. Liquidity still prefers scale. #Macro #FinancialConditions #CreditMarkets

@ChrisShepherd16 @charliebilello II bulls at 59.1% yesterday. Positioning remains very optimistic despite rising long-end yields and tighter financial conditions underneath.

@AllWxPort @charliebilello You wouldn't have yesterday's Investors Intelligence numbers would you?