Macro Thoughts: Shiny Happy People

  Everyone around, love them, love them

   Put it in your hands, take it, take it

   There’s no time to cry, happy, happy

  Put it in your heart where tomorrow shines

  Gold and silver shine

   – R.E.M. , Shiny Happy People; 

•            In hindsight, we dropped our bullish call on risk assets prematurely (in last month’s piece) in place since late March. Thus contrary to our expectations of a correction in last month’s piece, we got a bit of grind, with the market more or less tracking sideways but generally with upward biases.

•            That said we continue to hold a cautious tactical view and expect risk markets to move lower into June. That expected sell-off (if it happens) is likely to provide decent buying opportunities especially in gold and silver and favorite stocks (i.e. those in our model portfolio for Turkish stocks), in our view.

•            In this context, newsflow regarding Hong Kong will add to increasing tensions between the US and China and could result in a similiar sharp sell off seen a year ago due to trade tensions between the two.

•            Gold remains our favorite asset class as our expectations continue to pan out and we maintain our view that today’s emergency monetary policies will become permanent; are being joined by fiscal policies and debt monetization will become more and more widespread , resulting in stagflation down the road. While policymakers seem focused on the left tail (debt deflation) we think their response increases the probability of right tails, a sort of heaven for  gold.

By Mr Murat Berk, chief strategist Yapı Kredi Invest

You can follow our  English language YouTube videos  @ REAL TURKEY:

And content at Twitter: @AtillaEng

Facebook:  Real Turkey Channel: 

Published By: Atilla Yeşilada

GlobalSource Partners’ Turkey Country Analyst Atilla Yesilada is the country’s leading political analyst and commentator. He is known throughout the finance and political science world for his thorough and outspoken coverage of Turkey’s political and financial developments. In addition to his extensive writing schedule, he is often called upon to provide his political expertise on major radio and television channels. Based in Istanbul, Atilla is co-founder of the information platform Istanbul Analytics and is one of GlobalSource’s local partners in Turkey. In addition to his consulting work and speaking engagements throughout the US, Europe and the Middle East, he writes regular columns for Turkey’s leading financial websites VATAN and and has contributed to the financial daily Referans and the liberal daily Radikal.