Key insights
- The author discusses the market's ability to rapidly price in macroeconomic risks like energy, inflation, and credit concerns, even amidst short-term positive news (e.g., US-Iran relations). They also highlight the potential for tech sector profitability to offset recessionary pressures. The author questions how quickly and extensively the market can overreact and price in these medium-term macroeconomic headwinds, referencing the rapid pricing-in of tariff fears as an example.
Given the fact that markets are fast and big players/insiders know their shit… even if we have short term good news regarding US Iran (big IF) we have an energy, inflation and credit crisis lurking.
On the other hand, tech is more profitable than ever and we might be able to out-growth any recession based catalyst
Now back to the short term. How fast and how far can the market (over)react and price in to those mid-term pain macros coming on our way?
For example tariff fears got priced in in a matter of 3 weeks. And the we thought it was the end of the world….