In a special episode of Real Vision’s Trade Ideas, The Bensignor Group CEO Rick Bensignor interviewed Morgan Creek Capital Management’s Mark Yusko about his current market outlook.
Yusko is bullish on China: “Everyone thinks we’re winning the trade war. China is so far ahead of us. They’re three moves ahead. They’re playing a different game, they’re playing ‘Go’ while team Trump argues about how to set the checkerboard.”
He said he doesn’t believe a trade deal will be made, and pointed out that while the US decided to support the FAANGs 10 years ago, China decided to back AI and 5G.
“They’re killing us on 5G rollout,” he said. “They’re leading in technology. They’re building better companies. So the great trade is long China, particularly the A shares (SHSZ300), and short the S&P.”
“[The S&P] is up about 6% since January 2018, and that’s three points of inflation and three points of dividends,” Yusko said. “I think last December’s drop was halfway. I think we're going all the way to fair value.”
In the wide-ranging interview, Yusko also said he believes the Fed will cut rates “even though I think it’s a huge mistake.” “Low interest rates don’t solve economic problems,” he said. “If they did, Japan and Europe would be rocking, which they’re not.”
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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