Blind Squirrel Macro’s ‘Start The Week’ note is the weekly review of the BUSHY™ beta portfolio and updates on our ‘Acorn’ trades - anything from single stock ideas and thematic baskets to FX / Credit / Commodity ideas.
This week’s edition focuses on the portfolio’s rates positioning ahead of the FOMC (and after an exhausting weekend of AI Psy-Ops!).
While you are here please ensure that you are signed up directly for Benny & The Squirrel - some exciting developments in the making!
In the weekend flagship note, we returned to the topic US power utilities, where political pressures may be creating a convex opportunity on the short side of XLU 0.00%↑ and certain single power names. Check it out via the link below 👇:
Nose Clip and Chain Mail Glove
BUSHY™, the 🐿️’s beta portfolio had a strong week - driven largely by energy-related assets (which we have now started to trim) - and we are now back ahead of the S&P for the year with only 60% of the realized volatility.
Before we get to the full portfolio reviews (in which there are some recent and upcoming changes to report) we need to consider how to respond to the AI psy-op that took hold of our social feeds over the weekend…
Bottom line: my current sense is that a ‘ceasefire’ on frontier LLM training by the model labs is ‘no bueno’ for equities. At the moment, Sunday night futures agree.
RSP/QQQ
The RSP/QQQ pair trade has pulled back meaningfully since peaking at the end of July. Any slowdown in AI capex should favor the equal-weight S&P over the Nasdaq (RSP/QQQ is +1.75% in overnight markets. This looks like a decent entry level to anyone that did not get into the trade in late June.
