Warning: Don’t Sell Blow-Offs in Stock Market, Veteran Macro Investor Andrew Perry Says
Speakers
Andrew Perry
— Veteran Macro Investor, Macro Pillars
Summary
Andrew Perry discusses a bullish technical outlook for US stocks, warns against shorting the blow-off, and recommends pair trades long US equities and agricultural commodities versus energy-dependent countries like Australia and Germany. He also expresses a bearish view on gold and emphasizes liquidity monitoring via the MOVE index and Treasury QRA dates.
- Andrew Perry advises not to sell the current US stock market blow-off, with targets of S&P 500 77,800 and Russell 30,000.
- He recommends pair trades: long US equities / short Australian and European equities on energy dependency and tax policy.
- He is long agricultural commodities (corn, wheat, soybeans) driven by fertilizer stress and potential China demand.
- He pairs long ags with short DAX and short Australian equities, expecting 20-30% further upside.
- He is short gold in his trading book, citing a breakdown in the gold/30-year bond ratio.
- The MOVE index and quarterly refunding announcements (QRA) are key liquidity indicators, more important than the VIX.
- He warns that liquidity is not abundant but sufficient for sector-specific momentum, especially in AI and semiconductors.
- He expects a future recessionary trade when yield curves shift from bear steepening to bull steepening on higher energy prices.
Trade Ideas
Long US stocks, don't sell blow-off.
The US stock market is in a momentum-driven blow-off phase similar to 1999. Fundamentals and liquidity are supportive enough to sustain further upside, with technical targets of S&P 500 at 77,800 and Russell at 30,000. Selling into this momentum is dangerous; investors should remain long and not try to pick a top.
Long US, short Australia on energy.
Go long US equities and short Australian equities as a relative-value pair trade. The US is an energy surplus nation, while Australia is heavily energy-import dependent and faces additional headwinds from a capital gains tax hike (23% to 40%) and an RBA rate hike. The technical and liquidity setup favors the pair.
Long US, short Europe on energy.
Go long US equities and short European equities as a relative-value pair trade. Europe is energy-dependent and struggling with the price shock from the Iran war, while the US benefits from energy self-sufficiency and strong AI-driven earnings. The trade exploits the divergence in energy exposure.
Long corn, wheat, soybeans on fertilizer.
Long corn, wheat, and soybeans as a direct agricultural commodity position. The thesis is driven by fertilizer stress (phosphate from the Strait of Hormuz), rising diesel costs, and potential China demand from a US-China trade deal. Prices have held above the March 2nd war-start low, and further upside is expected.
Long ags, short DAX pair trade.
A pair trade of long corn, wheat, soybeans versus short German equities (DAX). The agricultural commodities benefit from fertilizer and energy input stress, while Germany's energy-dependent economy is particularly vulnerable to the price shock. The trade has another 20-30% upside expected.
Short gold on ratio weakness.
Short gold in the trading book. Gold has failed to benefit from the bear steepening in yield curves; the gold-to-30-year bond ratio is making lower highs, suggesting metals are vulnerable. He expects gold to trade sideways or lower, and is short the metal in his active portfolio while holding physical gold separately.
