Kevin Muir, the investor behind the popular financial newsletter The Macro Tourist who went short high-flying US tech stocks in December, says it’s time to start getting back into the market.
The former RBC trader says he’s unwound all of his bearish bets, and is now scooping up shares of everything from copper miners to shipping companies, with a particular focus on firms that generate significant revenue outside the US. The play, which he dubs a “rest-of-the-world trade,” is partly a bet on the fiscal stimulus he says countries from China to Germany to Canada will be forced to unleash to shield their economies from Trump administration tariffs.
“I’m dipping my toe in,” Muir said in an interview. “Although I’m bearish on US stocks, and I’m bearish on the US economy, I expect the rest of the world to spend money on fiscal expansion.”
Muir said he exited his short positions because the reward to stay bearish was no longer worth the risk. Wall Street’s fear gauge — the CBOE Volatility Index, or VIX — climbed above 60 Monday. It was in the low teens when he first made the wager, he said.
“When everyone’s panicking and assuming the global economy is about to go into recession, that’s when I start looking and saying OK, this is time to go the other way,” he added.
Stocks in Europe and China have outperformed US shares this year amid Germany’s plans to ramp up defence spending and Chinese breakthroughs in artificial intelligence.
Muir said he’s buying in small sizes for now because the selloff could have room to run yet.
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Still, on Monday, he sent a note out to his more than 34,000 newsletter subscribers saying that China could announce stimulus as soon as Tuesday. He pointed to the unusual selloff in the bond market Monday — 30-year Treasury yields jumped 21 basis points — as a sign some were anticipating Beijing to dole out stimulus.
“The old framework is that when the US sneezes, the rest of the world catches the cold,” he said. “I want to fade that a little bit.”
