MacroVoices #483 Vincent Deluard: MAGA vs. Corporate America
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This is Macro Voices, the free weekly financial podcast targeting professional finance, high net worth individuals, family offices, and other sophisticated investors. Macro Voices is all about the brightest minds in the world of finance and macroeconomics telling it like it is, bullish or bearish, no holds barred.

Now, here are your hosts, Eric Townsend and Patrick Ceresna. Macro Voices episode 483 was produced on June 5th, 2025. I'm Eric Townsend. Stonex Global Macro Director Vincent Deluard returns as this week's feature interview guest. Vincent says the MAGA movement has declared war on corporate America, which Vincent says the Trump administration will tax even as it reduces everyone else's taxes.

We'll also discuss why Vincent says recessions have been canceled by monetary policy and what Vincent sees on the horizon for asset markets. And I'm Patrick Ceresna with the Macro Scoreboard week over week as of the close of Wednesday, June 4th, 2025. The S&P 500 index up 139 basis points, trading at 59.70.

Markets continue a slow grind higher toward a retest of all-time highs. We'll take a closer look at that chart and the key technical levels to watch in the postgame segment. The U.S. dollar index down 107 basis points, trading at 98.81, trading back to April lows, but will support hold or is there a new leg down coming? The July WTI crude oil contract

up 163 basis points trading at 62.85 sentiment remains decisively bearish but quietly oil is trying to break out of a two-month trade range we'll talk about that chart in the post game

The July Arbob Gasoline down 146 basis points trading at 203. The August Gold Contract up 232 basis points trading at 3399. Still near all-time highs, but do the bulls have the gas in the tank for a breakout to all-time highs? The July Copper Contract up

up 450 basis points, trading at 488. Uranium down 98 basis points, trading at $71 even. And the U.S. 10-year treasury yield down 13 basis points, trading at 435. The key news to watch this week is Friday's jobs numbers. And next week we have the CPI and PPI inflation numbers and the University of Michigan inflation expectations.

This week's featured interview guest is Stonex Global Macro Director, Vincent Deluard. Eric and Vincent discuss Trump's impact on corporate America, foreign capital, U.S. and Europe relations, and more. Eric's interview with Vincent Deluard is coming up as Macro Voices continues right here at MacroVoices.com. Macro Voices

And now, with this week's special guest, here's your host, Eric Townsend.

Joining me now is Stonex's head of global macro strategy, Vincent Deluard. Vincent, it's great to get you back on. It's been too long. Let's start with the markets and what you see coming. I think you've had a pretty good spring. You kind of called the correction in March. What's the outlook now? I think you were looking for a deeper correction in the summertime. What's the outlook? What are you forecasting? And what do you see coming?

So we had a call for a March correction, bear market called Beware the Eyes of March. I must say I got a bit lucky with the tariffs. I got some help from Orange Man. And then when we saw the market in dislocation by...

late March, early April, it was clear that, you know, the taco trade, right? Things would bounce off. So we published a report called Spring Rebound, Summer Lull, and Fall Correction. The idea was that the market would retrace most, if not all of its losses, and then kind of

hang around the summer, which is typically a boring period. And then in the fall, we'd meet some of the unleft, unsolved issues that hadn't been addressed in the spring. I outdated that because

the rebound has exceeded my expectation. I mean, we're basically back at an all-time high. The market went up almost like 15 days in a row after the pause on tariffs. What I thought would be the trigger for the second leg, which is rising bond yields, has also happened. I mean, we are at a cycle high in the 30 year, the 10 year is not far behind. So I'm starting to wonder that this kind of second leg

maybe a retest of the law or maybe not we go fully to the law but certainly significant drawdown would happen in July instead and July would seem like an appropriate date for a correction this is when the 90 day pause on tariffs ends I doubt that we'll have big beautiful deals with 200 countries since we don't have

somewhat BS deal with one, the UK now. So we'd better get signing right now. So with this policy risk on the tariffs, this policy risk on the Fed, obviously we kind of pushed out the rate cuts, but that means that the July meeting is the one that becomes key, partly because there's a part of the market that expects cuts and certainly they expect guidance on these cuts, which may not come. July is also when we see the impact of tariffs filter through the economic data.

I think now we're enjoying this kind of almost illusionary relief where, oh, look, there's no Q1 is fine. Of course, Q1 is fine. I mean, the first tariff payments were made, if you look at a day's treasury statement on April 22. So you're not going to see that on the Q1 data and you're barely even going to see it in most of the Q2 earnings either. I think that the way you're going to see it is going to be in the guidance.

towards Q3, Q4, which will be made in July. July, of course, will be earnings season. When companies are about to report earnings, they cannot complete buybacks. So if we see some weakness in the market, there won't be that buyback bid to stop it, which I think was a factor when we had the big waterfall declines in April, there was no buyback to stop it. Though eventually the buybacks will come back as companies report, but there will be that window of weakness

And then finally, from a flow perspective, stocks have completely destroyed bonds this quarter. You know, we're up 20 plus percent on stocks while bonds are flat to down. So if you are a target date fund, which is the way most U.S. retirement savings are managed now, you are way overweight on stocks and way underweight on bonds.

So you'll probably need to sell some stocks, buy some bonds, or at a minimum, when you see the paychecks come in June for Q2, you'll allocate all that money into bonds and none of that in stocks. So you have policy risk, you have...

Trump risk, for lack of a better word. Earnings, I think is going to be okay, but let's call it guidance risk. And on top of that, you have poor liquidity due to lack of buybacks and the target date funds at a time when typically people are on vacation. So yeah, I think we had a very nice run. I'm not structurally bearish. I don't think stock's actually that expensive, but I would put some hedges ahead of the summer season.

Vincent, let's move on to your recent writing called MAGA's War on Corporate America, which we have linked in our listeners research roundup email. Folks, you'll find that in the usual place. If you don't have a research roundup email, just go to our homepage, macrovoices.com. Look for the red button that says looking for the downloads above Vincent's picture. Vincent,

Vincent, this piece basically says that the Trump movement really is going to be a frontal assault on corporations, getting them to pay most of the taxes. Explain what's on your mind. So I saw the report with an analogy with one of my favorite movies of all time, which is The Usual Suspect.

great movie, great heist movie from the 90s where you have the smart guys that think that they have a perfect heist. And at the end, it's the guy whom everybody thought the fool who was manipulating everybody. And I liken that to U.S. politics. I think that the smart guys in this case are the oligarchs, the tech barons who embrace Trumpism after fighting it tooth and nail for eight years. They realize, listen, here is this guy who

We can just give him some money, sign a check for his inauguration. We'll pretend we're cool with the whole, you know, anti-foreign stuff, even though they're not. So we can get disgruntled voters, disgruntled men in America to vote for us.

And then as soon as that guy's in power, we'll drop all the populist stuff and we'll just have him cut taxes, deregulate and break the government and we will come out filthy rich. I think that was the plan of many of the people who were in the rotunda on that inauguration ceremony of the new golden age of America.

And in that metaphor, Kaiser Soze, the bad guy in the usual suspect, would be the MAGA voter who realized that he was being played by a fool, but was playing a much longer game and actually knows that, yeah, foreigners are now going to pay for the secular increase in entitlements. That is the fundamental problem that we're having as a country, not just in the U.S., but

most of the West, uh, because we are aging, uh, because healthcare expenses rise faster than GDP and we haven't properly funded these future liabilities. We need to find the money. And there are really only two ways you can find the money. Money can either come from profits or wages. Now, Trump was elected on the promise that he would take it from foreigners. You know, tariffs will pay for it. Foreigners will just give us money. And, um,

Now we are seeing that that does not happen. Like we are not going to get trillions of dollars of tariff revenue or we are not going to get a beautiful Mar-a-Lago deal where foreigners just accept to forever postpone their interest payment on currency reserves. So it's going to be wages or profits. And if I look at the content of the big, beautiful bill, I see that wages, income are protected while profits are not.

Vincent, tell me more about what the knock-on effects and implications of that are likely to be. So I think the biggest effect is going to be on profit margins. And so it should be, by the way. If you look at this chart on the thread, corporate profits are the share of GDP, you see that it was very mean reverting all the way to the 90s. And that's the proof that capitalism works, right? Because if you make more money, then eventually more people come in and your abnormal profits disappear, right?

And then something happened in the 90s. Now we can get into what that is, whether it's the rise of China, whether it's demography, whether it's policy. I mean, it's probably a mix of these things, but the profit rate just takes off and we are at an all-time high. So if you think that we're going to have a big expense to pay off, it makes sense to take the money from the people who have it. And that would be corporate profits. So it's really on the margin rate.

doesn't necessarily mean that stock returns are going to be horrible. Part of my theory, and I'm sure we talk about it, is that we are in an era where recessions have become much scarcer and growth is much higher. So it's possible that if you look at earnings growth, it still stays stable.

Pretty good because the top line growth is good, but the margin is going to absorb the hits. So what I expect to happen is that in the new normal, growth is up, inflation is up, rates is up, profits are up too, but less so than consumption. So over time, we are rebalancing the economic pie away from corporate profits towards wages and consumption.

Vincent, tell me more about what specifically in the big, beautiful bill leads you to these conclusions and what would the implications be for markets? Well, it's really what is not in the bill that leads me to that conclusion. So what's in the bill, you know,

Everybody talks about it, right? All these tax cuts, the TCGIA, and then the no tax on overtime, no tax on tips, no tax on social security. That's a big one. Bigger exemption, state and local tax. Keep in mind that all these things

apply to personal income. And that's my point. We are helping basically wages. The idea is that Trump has realized that tariffs are going to be in a facial shock and that's going to be bad for our income. So he's telling his voters, guys, yeah, I know I'm hurting you here, but listen, your tax rate is going to come down.

What's not in the bill is anything for the corporate income tax rate. That is the only tax rate that's not coming down is the corporate income tax rate. And if you think about the reality of tariffs, not what Trump says about tariffs, tariffs are a tax on corporation. At the end of the day, when companies import goods from abroad, they have to pay the money. So it's a tax on corporate income. So

corporate income is taxed at a higher rate and there's no adjustment to the corporate tax rate. And then there's a bunch of other measures that

that are clearly going against corporate interests. You can think about the war on universities and foreign students, which are obviously a big source of qualified labor for Silicon Valley that's being shut down. You can see the shutdown in immigration, which means that, yeah, labor would be less abundant. That increases the bargaining wage of the existing workers. And then finally, you can see what I think is the most important is restriction on the free movement of capital. In that bill, you have a lot of

I think, poison pills that seem quite innocuous right now, but are the start of something much bigger. I'll stress two of them. One is the idea that the U.S. can tax dividends and interest income paid to foreigners whose tax policies we don't like. So,

You know, if you're a foreign investor and let's say your country has, like Europe, has a tax on big tech, on digital services, Trump can say, listen, your dividend, I'm going to add a 25% withholding tax on dividends from all U.S. corporations because you have this policy. So if you're a pension fund, that really means that there's a new policy risk for owning U.S. assets that did not exist. And then the second portion, P.L., is that tax on remittances.

The idea that, you know, foreign workers working in the U.S. sending money back to Mexico, to India, to Honduras will have to pay another level of tax just for moving money. And to me, that is the beginning of that movement towards national capitalism and capital controls, which, again, hits corporations, not workers. It sounds like you think the Trump policies are going to

be less encouraging of inviting foreign capital into U.S. markets. Are you concerned that the U.S. is risking the loss of a lot of foreign capital? And if so, what is that going to mean in terms of relative performance of U.S. markets versus Europe and the rest of the world?

Absolutely. The U.S. has been a whirlpool that sucked in global capital for really 30 years, but that movement really accelerated since COVID. And keep in mind, the capital account is nothing but the

mirror of the trade account. So if you have a big trade deficit, you must have a capital account surplus, right? If you consume more than you produce, you must be selling assets some way. So we have this massive capital account surplus. And I mean, I see that my job is, most of my job is really spent advising pension funds in Latin America, Canada, and Europe. And I see these guys are just up their skis with U.S. stocks, right?

the U.S. was the only game in town. China is un-adjustable. Europe never grows. Latin America keeps messing things up just by the Mach 7. And if you did that for 15 years, of course, you would have done fantastically great. So we are at a point where the allocation to U.S. stocks is enormous.

The average European pension fund is a 52% allocation to U.S. stock. Now, if you think that, that's completely crazy. I mean, we're talking about a country that really threatens to invade us Europeans. If you just look at the max seven holdings of the Norwegian pension fund, they account for 100% of Norway's GDP.

In what world does that make any sense? Like you are putting 100% of your GDP in seven stocks in a country that is threatening to annex an island, Greenland, next to you. Nothing is normal about that environment. And

And you are seeing that movement where people are freaking out. They see that the dollar is coming down. They see that U.S. has underperformed. They get all this mixed messaging from the administration. So I do believe that that process is only starting. And yeah, it means that U.S. equities will remain under pressure. They may not perform horribly. Again, I

I maintain my view that growth is going to be better than people think. So I'm not really calling for like a massive bear market. But if you look at the relative performance of U.S. versus international, I think we are in for a very long cycle of outperformance on international stocks, which would be nothing but the reversal of that even longer trend of U.S. outperformance, which we had for the past 15 years.

Vincent, if I look at the rules that are being enacted now and the rules that we already have, it seems to me that for foreign investors, the U.S. may not be as pretty of a shining star as it was before some of these policies, but it's still a better deal than just about any place else. The U.S. doesn't charge foreigners any interest.

capital gains tax on investments, whereas many other countries do charge foreigners capital gains tax if the gain was made in their country. There's a number of things about U.S. markets that have always been incredibly appealing to foreign investors. Is that really changing or is it just that a little bit of luster is coming off of that shine?

I think it's really changing. Again, when we talk about this withholding tax idea, which is in the big, beautiful bill, and it's not very clearly defined, nor in the rate, it's opening the door to an era of discretion. And, you know, if you go back to that Stephen Mirren paper that, you know, I think everybody should read, Use a Guide to Restructuring the Global Trading System, he mentions the view that foreigners realize return on U.S. assets should be a function of their closeness to

to the alignment with US policy. So instead of being, you know, a welcoming place that welcomes, is open to everybody's savings, we decide whether we like your money or not. And we decide whether you are worthy of interest on treasury securities or dividends on stocks. So it's a big change. The second idea, which I agree with, is generally correct, what you said, the rest of the world is worse. That's true.

But my idea is that the money just comes back home. So it's not like a European pension fund is going to sell US and buy Japanese stocks. It's just going to bring it back home because back home, we have a very positive yield curve slope. So that

that makes it advantageous. We have highest long-term rates in, you know, 50 years probably in Japan, 30 years in Europe. And then we have the biggest investment plan we had in a generation in Europe with Germany building an army. So we will need the savings. So it's not so much that the U.S. money is going to go somewhere else. It's just going to come back where it comes from. So the Koreans are going to bring it back.

Korea, the Japanese are going to bring you back to Japan. And I think you see that if you look at movements in exchange rate, like what's happening to Taiwanese dollar, the Korean won, the Japanese yen, that's kind of consistent with the idea of everybody goes back home. And then if I may add one last thing,

I will mention one country that's close to my heart, which is Switzerland, which really doesn't do any of that nasty stuff. And it even does the opposite. If you are a foreign investor, they'll actually refund your taxes because they don't want you to be double taxed. So the U.S. is not unique. There are other, I mean, of course, they're not as large as liquid, but I strongly recommend people look at the Swiss market.

Vincent, I want to move on to another paper that you wrote. It was in last month's Stonex Intelligent Quant Report. That one was titled The Cancellation of Recessions. I think we talked about this a little bit the last time that I had you on the show, but you hadn't formalized these ideas into a writing yet. Tell us a little bit more about how these ideas have evolved and what's on your mind.

Well, a lot of it just comes from observation. If you look at the 19th century, pretty much 40% of the time we spend in recession. And then that proportion drops a little bit with the Great Depression. In the early 20th century, as we see a development of Canadian activism and monetary policy, it drops even more after World War II.

And then, I mean, since 08, there was no recession. I mean, COVID, but it, you know, you blink and you missed it, right? I mean, and it was entirely self-inflicted. So I don't count the COVID as a real recession. So you have to go back now 17 years or 16 years to get a recession. And I suspect this is no accident.

This has to do with the structural change in the way we conduct policy, in demography and just capitalism as we move from physical capital to digital assets, tangible to intangible, atoms to bits. The economy has become a lot less cyclical, a lot less industry, a lot more services, and then also policy. I think that's the part that I think is somewhat new that I really want to stress is

Fiscal policy is never going to normalize. I mean, we had a half-ass attempt with Doge, but that lasted a month. And we are back with this, you know, 7%, 8% deficit to GDP ratios. And the way I frame it is, it's like we're fighting a high-intensity war at all time. Like if you were looking at the Russian economy right now,

You would never expect the Russian economy to fall into recession, right? Because they have to build all these tanks and planes and weapons. The same thing is happening in the U.S. or most of Europe, really, also, but because of aging. If you look at spending by HSS, which cover most of healthcare expenses in the U.S., it's growing by 10% a year since 2022. So I'm...

purposely leaving COVID aside. I know that COVID was real. Since COVID is over, we have health expenses growing by 10% a year. Now, nominal GDP is just 6% a year at best with that burst of inflation and all that. So if you have an area of your economy, I mean, healthcare is anywhere around 20% of the GDP. That's growing by 10%. That gives you a growth baseline of

of 2%. So whatever cyclical variation we get from the inventory cycle, the capex cycle, the credit cycle, it's not enough to get you in the recession. We are living like an addict who every time he starts having withdrawal symptoms, taking new and larger dollars, we are living in an age of structural stimulus at all times.

Vincent, the argument that Austrian economists and others have always made in the past is that trying to tame the business cycle is a misguided undertaking, because if you ever manage to achieve it, what you would do is basically just build up more and more pressure until eventually you get a much worse economic event than just a recession. You get a full on depression.

So the theory used to be it's better to allow these recessions to happen because we need them to essentially clean out the economy, make it better, clean things out and get ready for the next upcycle. Is there truth to that? Should we be concerned that if recessions are being canceled, that that potentially causes a structural break in the system? I think that's a very interesting theory. It certainly applies in forest management.

You know, one reason why we have such horrible fires in California is because we don't have little fires and then all the deadwoods accumulate. So once it starts, it just burns everything. Now, does that translate over to the economic cycle? It's an open question. For the sake of the argument, I'm going to present the other thesis.

which is that maybe we can have this creative destruction, which is ultimately what you describe is an argument is like you need to get rid of the losers so that new companies can emerge and take their places. And that's what recessions do. Maybe we see that being achieved by private equity.

where basically they're like vultures in the animal kingdom that would clean up the carcasses very fast and ensure that capital is redeployed where it can earn a high rate of return. On the innovation side, it's the VCs, right? If you're a VC, you're paid to constantly come up with new companies because you want to raise more money to generate more fees. So if you think about the innovation cycle,

When I went to school, we talked about this contract-yaf cycle, which is the idea that every 30, 40 years, you get a massive event that just brings a new wave of innovation, whether it's a combustion engine, radio. Maybe that's happening at all time because we have an entire class of people that's dedicated, that earns a living from doing that. Another idea that would play in that theory would be

that we are better at assessing how the economy is doing and coordinating information. I mean, you can think of a recession as an information coordination problem. Recessions happen because someone has made a wrong plan. A company has invested too much, household have levered too much, banks have lent too much.

But as we get, and I hate to use buzzwords, but I'm going to do it right now, big data, artificial intelligence, we may be better at avoiding this planning errors that lead to recessions. Again, this is quite speculative. I'm not sure I 100% believe in what I just said. I think the policy explanation is probably the better one, but it's certainly something to consider.

Vincent, let's talk a little bit about what's going on in Europe. It feels to me like Europe and the U.S. are falling out of sync, not just on economic cycles, but on a lot of foreign policy. Are we headed toward a situation where U.S. and Europe are not allied as closely as they used to be? And I don't mean just for the next year or two, but I mean for decades. Are we looking at a secular change in the relationship between the U.S. and Europe? And if so, what are its consequences?

Yeah, I believe that's right. You see that, for example, in monetary policy, right? Where this week we're going to have the ECB meeting and it's, you know, 100% certainty that Lagarde is going to cut. Inflation in Europe is really coming down. I still think it's going to resurge. I am seeing the high inflation cam, but as far as Europe, tariffs are the exact opposite. It's a very asymmetric impact. In the US, tariffs are an asymmetric shock.

to inflation. That means that unbalanced monetary policy is going to be more hawkish because Powell feels he cannot really model tariffs. So the bias would be to stay on hold because of the risk of core goods price increases. In Europe, it's the exact opposite.

the fact that we're going to have tariffs in the U.S. and that the dollar is weakening, which is inflationary in the U.S. In Europe, we see the exact opposite. We don't have tariffs. We actually have more deals

Looks like that Mercosur, the deal with Mercosur, which is the Latin American countries, will be accelerated. It's been in the books for 10 years and now Europe is kind of frantically looking for new trading partners. So we are making more deals and we will get a lot of the exports that were meant for the U.S. market will be dumped into the European market. And at the same time, our currency is transferring. So if you are a guard, you feel pretty good. And you could see that in the last press conference, I said,

You know, I always think Lagarde has a huge imposter syndrome when she speaks because she's not an economist. She doesn't really understand how these things work. So you can send that tension in her. Like she's very nervous. And then last press conference, she was all smiling, all happy because yeah, things are turning pretty good for Europe. The inflationary shock is much more close to being contained than it is in the US. The yield curve is upward sloping, but

Public investment is picking up. So Europe is having a bit of a moment. And let's talk about China and Taiwan and the developing geopolitical tensions there. Where are we headed in terms of the U.S. relationship with China and the rest of Asia, for that matter? You know, the intention is to decouple and reduce the China risk. I think that

Wing is very dominant in the US administration. You have a lot of very strong China hawks. The question is, how can we do it and whether we can do it at all? And I think that was a lesson from the trade war and the escalation to 145% tariff and then bringing it down is we realized that, yeah, we need them now.

quite a bit. Maybe we need them more than they need us. So at least the interdependence is very, very strong. Like the naive view that as a deficit country, we held all the cards.

did not apply. And I think that's because of the breadth of Chinese industry. I mean, if you look at the product code in the import classification, you have so many products where China is basically the only game in town. So if you put an embargo on them, you've really embargoed yourself. So I think that makes that decoupling extremely difficult.

And maybe that means that, yeah, eventually the taco trade is correct and that China will probably end up with the upper hand in the trade wars.

Vincent, let's focus on that specific point about who needs who more, because I perceive that, you know, we've gone into this trade negotiation kind of with that attitude of, hey, we're the United States. We're big and powerful and in charge and you have to do what we say. I think that we are more dependent on China than even economically. China is on us at this point. And I think Americans don't realize that. And it creates a lot of risk. Am I on to something?

I believe you're absolutely right. I think the Chinese had eight years to think about it and get ready. And they did all the things that they needed to do. Diversify their supply, trade deal, build strategic reserves of things that they might need, prepare their population also. And in the U.S., we were quite cavalier about it. We could have built strategic reserves of rare earth. That would have been a pretty smart idea.

We could have looked at supply chains that were extremely vulnerable, but we did not because maybe we thought that they would fold or maybe just the process in this administration that's a little, quite often light on policy, very strong on words, but light on the actual work. Also, I think in terms of public opinion,

I don't think we've really done the same, uh,

philosophical work. I think that the Chinese population is very much behind this idea that it's China against the rest of the world, that the rest of the world has been piling on China and trying to contain China's rise and we have to all stand strong together. And if we need pain, we should take that pain. Like there was never an expectation that the U.S. would be kind and fair with China. While in the U.S.,

I don't think the people who voted for Trump voted for, you know, when he goes on and says, well, you know, maybe you're only going to get...

$2 for Christmas instead of $20, it's just not part of the American experience. I mean, the American experience is really built around consumption and around prosperity. So if you take that away, you start, you know, having problems, social problems, much quicker than in China, where I agree, the situation is not that great. I mean, you have a very high youth unemployment rate, you have a real estate crisis, but you can kind of

flatter that nationalistic instinct to tough it out in a way that we can't really do that.

Well, China is doing an extraordinarily good job of planning their long-term energy strategy. They're building out infrastructure. They're doing more and more things that position them to be incredibly powerful, I would say invincible as a manufacturing superpower. And I don't see anything really coming in to change that. And I think we're in denial about it.

And you've done some tremendous work on the development of modular nuclear reactors in China and the idea that, you know, at the end of the day, the country who would win the world is the country that will have the cheapest, most abundant, most reliable energy.

And it seems that that has been a priority of Chinese policymakers for many, many years. Now, I do sense that just not just the U.S., but also the West, like now there is a realization moment, almost like a Sputnik moment. Oh, this is big and we miss that. So hopefully we'll catch up. But we started late.

Vincent, I see this as essentially a fait accompli that China is doing all of the right things to get its strategy together, to plan its economy, to set the stage with the right energy policies and so forth.

Do you think that there's that's likely to result in military conflict? In other words, well, wait a minute. They did a bunch of smart things over there in China. They're going to be ahead of us because they outsmarted us. We can't have that. We've got bigger bombs. Let's let's nuke them. Is that where this is headed? I really hope not. I mean, it's it's a risk. I tend to be a bit more optimistic. I think people have.

self-preservation instincts. I know there's always that Taiwan risk and that red reports now that, you know, bigger fleets and

It's always very hard to tell. Keep in mind, you know, in the West, we have a huge incentive to portray the situation as dire because at the end of the day, it justifies things like a 1.1 trillion budget for the Pentagon, no questions asked. So we need to maintain the...

the fear that an invasion of Taiwan is imminent and that we need to be ready to obliterate them, which I'm not even sure we could do should that happen. On this, I'll quote my friend, Louis-Vincent Gaff, whom you've had on the show many times and who's probably one of the smartest minds in China. And he says, you know, if you talk about Taiwan risk in the US, it's always top of mind. It's never top of mind in Taiwan.

So I'll start freaking out when the Taiwanese government is freaking out and building an army from scratch and taking this very seriously. My general impression of China is that it is not an extremely aggressive expansionist country. On Taiwan, they're very happy to keep the status quo. And so is Taiwan.

So all we have to do is to avoid crossing very known red lines. And if we don't act like idiots, I don't think any side of the Taiwan Straits really wants this to escalate.

As long as we don't act like idiots. Somehow that doesn't build a lot of confidence on my part. But in any event, Vincent, I can't thank you enough for another terrific interview. Before I let you go, please tell us a little bit more about what you do at Stonex, what the Global Macro Report is about and how people can follow your work. I'm the director of Global Macro for Stonex. I write a report a week.

Uh, that report, uh, can be made available, uh, to our clients. We are a fortune 100 company with offices in, uh, 20 plus countries, very active in, um, securities, derivatives, commodities. Uh, so if you are already a client of Stonex, please reach out to your sales guy and say, Hey, listen, I'd love to get Vincent's stuff and we'll get you set up. Uh, if you are not, uh, please go to my Twitter account, uh,

My handle is at Vincent, V-I-N-C-E-N-T, D-E-L-U-A-R-D. And my profile is a pinned tweet and that pinned tweet has a link that will set you up for a free trial. I think you can get it for two months and then you can always reach me out via DM. I try to answer as much as I can because I very much enjoy Twitter, podcasts. I must say I'm very grateful. I mean, you were probably

probably one of the first people to really bring up that global macro conversation, bring it to the public and give people a chance. People who had original thoughts may not have come from the places you would expect. And I think we've really collectively benefited a lot from the rise of this kind of Twitter, podcast, Substack universe. We're all the better for it. So thank you.

Merci beaucoup. Patrick Ceresna and I will be back as Macro Voices continues right here at macrovoices.com. Macro Voices

Now, back to your hosts, Eric Townsend and Patrick Ceresna. Eric, it was great to have Vincent back on the show. Now let's get to that chart deck. Listeners, you're going to find the download link for the postgame chart deck in your Research Roundup email. If you don't have a Research Roundup email, that means you have not yet registered at macrovoices.com. Just go to the homepage, macrovoices.com, and click on the red button over Vince's pick-up line.

picture saying looking for the downloads. Okay, Eric, let's get your thoughts on equities. Well, Patrick, e-mini S&P futures closed Wednesday right on the hairy edge of 6,000. I don't really have a directional view here. I think this is a headline driven market. I could see it going either way. Patrick, what's your take?

Well, Eric, the market continues its slow grind higher, and we're now about 100, 150 S&P points away from testing the all-time highs made between December to February earlier this year.

Now, will the market test that? Well, it is the path of least resistance for this market to crawl higher. But we do have one important thing happening tomorrow, which is we're going to get the jobs numbers. And if there was any one thing that would derail this rally, could be an economic news miss tomorrow.

on an important thing like a jobs number. So if we can get past that jobs number without the market turning, well, next week we have some inflation numbers and other things. But overall, the path of least resistance would be the market to maintain its existing trend a little bit longer and work its way higher. With that said, I do believe that their asymmetry of being long this market is diminishing.

which is you're looking for capturing a few more percent on the upside as this market grinds at the risk that inevitably a mean reverting correction kicks in. Now, if we can get past that jobs number, maybe the market stays stable for weeks, if not a month. But I do believe that there is going to be some sort of a natural mean reverting correction. You don't have a thousand S&P point move in just over a month without it giving part of that

back in a typical retracement, especially as you approach a major previous high, which is now a resistance level. Point being is that for new money being put in the market, it's probably best to wait for some sort of a market correction to be dipped

buying. And right now, it's just a matter of seeing where and how far this market can finish these moves before we see something that causes it to begin some sort of a correction. Maybe the correction could be driven by July earnings. It could be driven by the July jobs numbers. It's probably likely something going into the summer versus that something here in June. Well, Eric, what are your thoughts here on the dollar?

Well, Patrick, as we anticipated last week here on Macro Voices, the downtrend in the Dixie is back on in force. I expect further weakness. I think this is a secular trend that's set to continue.

Well, expecting further weakness is definitely the path of least resistance, Eric. But we are approaching a major support line and the dollar is quite severely oversold. There is a measured move for the dollar index all the way down to the 95 level. And if the previous low doesn't hold a support, then it's not impossible for the dollar to still have another two, three Dixie points to the downside.

But if the support level holds, it's far more likely that the dollar enters a prolonged period of a sideways grind. I'm not opposed to a US dollar bear decline later this year that can even drop another 5 to 10 points. But is it all happened here in the first half of the year? And this is where I just feel that on the short term, this incredibly oversold state, if the support holds, we can have a

move back to 102, 103 very easily and it just grinds in a sideways trade range for a chunk deep into the summer and then setting up for a big net dollar trend move in the second half of the year.

All right, let's touch on crude oil here. Well, the market's been down on rumors that Saudi Arabia wants to supersize the production hikes that are planned in the next couple of months, possibly increasing beyond what Dr. Anas Al-Hajji and I discussed here on Macro Voices a couple of weeks ago. I don't see a directional trade here on the term structure side. The term structure trade that I described last week is already performing quite well. So the term structure is evolving in the way that I expected it to.

Oil has been in an awful bear market. There's no denying this. And we've seen, obviously, some pretty ugly price action. The news is still generally negative. But...

Almost all CTAs are short. There is a very large amount of bearish sentiment toward crude oil, but yet crude oil double bottom and is actually creating a very distinct basing formation. If we have any breakout to the upside just driven by liquidity, there doesn't even have to be a fundamental macro reason behind it. The short squeeze on the upside could drive a $10 or a $12 advance off of the lows.

And so while obviously the overall picture is pretty bearish, I do think that there's room for there to be lots of volatility, something that people are not expecting here right now. And let's see whether or not we start seeing some closing prices above the 50-day moving average.

and break above that kind of 63 to 65 zone that is a pretty significant overhead resistance, which could spur some short covering. Okay, moving on to page five here, we have the gold chart. Eric, let's start off with your thoughts here.

Well, Patrick, I got to hand it to you for last week's call. I was concerned that maybe gold was going to break down and get back down and retest below $3,200 again. You made the over call and said if we could get back above $3,300, we could quickly be back on track.

toward maybe a new all-time high. Seems like that's the path that we're on. I would say that the exuberance of gold, you know, for a while it seemed like every dip was just being bought instantly. You know, unthinkingly, it was just every single dip was being bought. It seems like maybe now the market's a little more sluggish about buying every dip. But at the end of the day, after a fashion and a little bit of, uh,

being on the fence, the market is still buying every dip in gold. So it feels like maybe this move is starting to lose a little bit of momentum, but it's still on. I'm keeping my fingers crossed. I love your 3700 targets. So let's see if we can hit them.

When gold pulled back towards $3,200, it held the 50-day moving average, as we can see on the chart. It held the Fibonacci retracement zones and has now exceeded a lot of the short-term overhead resistance that would have seen failure points around $3,350.

And so right now, obviously, we have not beat those April-May highs yet, but it is a primary bull trend. Higher highs, higher lows, accumulation continuing to be evident. We have to give the bulls the benefit of the doubt that they're going to make this punch. If it does, like you were suggesting, the measured move is up towards the 36 to 3700 level. Very realistic upside target.

But what's particularly interesting this time is we're starting to see broader participation in the entire precious metals market, including some very bullish price action in the gold miners. Page six, I have the platinum chart. I did this on a weekly chart because I really wanted to highlight that there's been this kind of

three-year trade range for platinum. It's been just back and forth, false starts, big bouncing around this trade range. We have an attempt for platinum to break out of a three-year trade range and nobody is talking about it. Now,

Obviously, we have in 2022 and in 2023 rejected at this very level where it's trading. So we don't have a decisive bull breakout to all time new highs or something.

And it could reject, but you got to pay attention here because if platinum here makes this breakout, we could be heading back to 2021 highs and there being a pretty solid trade. On page seven, I have that silver chart. Silver was in almost a two month trade range between that 32.5 to 33.5 range there.

And here we had a breakout. Now, is it a fresh new high? No. Again, very similar to platinum. We're approached all of last year's and this year's highs. But again, if silver was able to break out to an all-time high the same time as gold,

gold and platinum breaks this resistance, suddenly you have a broad precious metals rally going and that's going to be hard to ignore. This is an area that's been trending and our listeners should be watching all of these very, very closely. All right, Eric, I want to move on here and let's touch on uranium.

Well, Patrick, we've just seen a huge, gigantic move up on uranium mining issues, leaving giant gaps well below the market on most of those charts. And as experienced traders know, those gaps are going to have to be dealt with sooner or later. So I say it's much better if we can tackle them now and set the stage for a healthy structural bull market.

So my hope, and I have no reason to predict this, so it's not a prediction, it's just a hope, but my hope for this market is that we'll consolidate over the summer. Maybe some of the froth that we felt in the market will get shaken off and we'll fill in those gaps on the charts by American Labor Day, 1st of September. That would be the back the leverage truck up gap.

moment in terms of opportunity, I think, in this coming uranium bull market would be if we can get down to those gap fill points before Labor Day.

In any event, I will be buying before Labor Day, whether we get down to those levels or not, in order to add to my already overweight positions. And then I think after the WNA conference, the World Nuclear Association conference in London in early September, is probably when the real rally is likely to really start. At least that's the basic outlook that I have. I'm crossing my fingers that we get some consolidation, maybe a little bit of correction, but

between now and Labor Day to hopefully add to my positions at a lower price.

Finally, there's real positive macro headline news that is driving uranium. And what's interesting is that the uranium equities, like we talked about last week, are certainly the main benefactors of this. Now, we have not yet seen, obviously, the illiquid U-308 spot prices moving yet. And obviously, it's illiquid, so there's going to inevitably be a shift. But when we look online,

chart here of the Sprott Physical Uranium Trust, this has still not begun to react the way it should be if this is in fact a structural shift. And this is where I still think that there's asymmetry. You have to have a long enough time frame for this, but I do think that the downside risk of

owning this year is very small. And at the same time, if for whatever reason this gets underway, then the upside potential is really good because it hasn't really started to participate on the upside the way uranium equities have. And so quietly, the Sprott Physical Uranium Trust is one of my favorite ways of playing the laggard that will catch up.

Patrick, let's hit that 10-year Treasury note chart in this week's deck. Walk us through it. Well, I have that 10-year U.S. government Treasury yield chart up, and we've certainly been coming off that 460 high. We're now trading around 437, and we've seen generally that bond yields are taking a break. The key was that the 30-year bond

tested its 2023 level just over 5%. So we're seeing some pretty high bond yields. The big question, of course, is there going to be a breakout of yields to multi-year highs exceeding those 2023 high?

highs. That is the puzzle to solve because I think that if we saw that kind of a move is what could potentially be a market disruptor. I know Vincent was referencing that a little bit. Now, what is the probability you want to assign to that? I'm not sure I'd want to play the game of assigning a probability. Rather, it's about the observation that nobody right now seems to be overly worried about it.

And it's one of those scenarios that suddenly if we have an explosion in bond yields, we could have something that nobody cared about it until they all care about it all at once. And it could spur a market reaction. Uh, I'm not saying that I have a high confidence that that will be the case, but it is certainly something I'm not going to be ignoring. It's going to be something I think needs to be continued to be watched carefully. Uh,

and finally I wanted to highlight the two tens yield curve on page 10. I went back all the way to 2000 because I wanted to show the previous two, uh, recessions in bear markets, both the 2000 to 2003 period, as well as the 2007 to 2009 period saw substantial steepening of the yield curve. Now we, uh,

from a negative inversion. And so we have a scenario here where we have seen the steepening of this yield curve persistently over the last year to the point that we're now positive. But the big question is, is this accelerate? Will we see a scenario where

uh, this really rockets higher. Well, it's going to need two things. One, it needs a bull steepening, which is a fed starts to at some point, uh, accelerate its rate cuts. And that could happen if something breaks in the system and the fed is, uh, forced to be far more dovish than they're currently advertising. Or if you come from the break in the long bonds and that, uh, then let's see on the long end of the bond, uh, like two tens and, uh,

and the 30s go ripping north of their 2023 highs. Are both of those scenarios possible? Absolutely. And I think that this is the puzzle to solve is that is something like that going to spur a further steepening of this curve?

Right now, we are sitting, again, in a positive territory and a trend that's clearly been established over the past year. Let's see if it accelerates. Folks, if you enjoy Patrick's chart decks, you can get them every single day of the week with a free trial of Big Picture Trading. The details are on the last pages of the slide deck or just go to bigpicturetrading.com.

Patrick, tell them what they can expect to find in this week's Research Roundup. Well, in this week's Research Roundup, you're going to find the transcript for today's interviews, including the links to Vincent's articles and the charts that we just discussed here in the postgame, including a link to a number of articles that we found interesting. So you're going to find this and so much more in this week's Research Roundup.

So that does it for this week's episode. We appreciate all the feedback and support we get from our listeners, and we're always looking for suggestions on how we can make the program even better. Now, for those of our listeners that write or blog about the markets and would like to share that content with our listeners, please do so.

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Patrick Ceresna. On behalf of Eric Townsend and myself, thank you for listening, and we'll see you all next week.

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