Darius Dale (@DariusDale42), founder & CEO of 42 Macro, an investment research firm that aims to disrupt the financial services industry by democratizing institutional-grade macro risk management frameworks and processes, joins Julia La Roche on episode 112. 

In this episode, Darius presented his proprietary 42 Macro Weather Model to share his economic and market outlook. Growth in the real economy is expected to decelerate over the next 12 months, while inflation is reaccelerating. 

Darius’ model predicts below-normal returns for the stock and bond markets over the next three months. It also suggests above-normal returns for the U.S. dollar and below-normal returns for commodities and Bitcoin. A key takeaway is that with so many negative indicators, cash is currently the preferred asset. 

Darius also discussed the likelihood of a recession, citing that the most probable window for its onset is Q4 of 2023 to Q1 of 2024.

Prior to founding 42 Macro, Darius was a Managing Director and Partner at Hedgeye Risk Management, an independent investment research firm based in Stamford, CT. At Hedgeye, Darius was the Sector Head of the Macro team and was a core contributor to the firm’s economic outlook and associated investments. t strategy views. He joined the firm upon graduating from Yale.

Links: 

42 Macro https://42macro.com/

Darius on X/Twitter https://twitter.com/DariusDale42

42 Macro on X/Twitter: https://twitter.com/42macro

42 Macro on YouTube: https://www.youtube.com/@42Macro

The Julia La Roche Show is produced by Marlinski Media.

Timestamps:

0:00 Welcome Darius Dale to the show 

1:15 Macro view using the 42 Macro Weather Model 

6:50 Recession outlook 

8:45 Indicators of a broader breakdown in the business cycle 

13:00 Inflation was going to bottom at a level inconsistent with 2% mandate

14:30 Rethinking expectations for inflation target 

20:30 Fed outlook 

26:44 Higher for longer and the duration of how long 

28:49 Why we could have a worse recession than investors are anticipating 

29:48 Fed won’t be able to do large-scale asset purchase programs that we’re used to

30:35 Fourth Turning empirical analysis 

33:55 Powell 

35:50 Where are we within The Fourth Turning? 

38:00 Parting thoughts