1. Rich Insurance
2. A Cheap Fed Hedge
3. Copper Over Gold
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This week's MacroVantage flags three places where price and macro have drifted apart.
1. "Rich insurance."
Invesco's Pricing Power ETF (POWA) is the kind of stable, high-quality basket investors hold as a hedge in a sticky-inflation world.
But it has rallied hard and now trades almost 2σ (4.6%) rich to macro fair value.
With macro momentum flat-lining, that gap looks set to close by the market catching down.
2. A cheap hedge against a pre-emptive Fed.
Macro still points to higher US Treasury yields, but 2y yields screen around 20bp too low while 30y yields have run too far. With the 2s10s and 5s30s curves ~1σ too steep, the contrarian move may be to shift bearish focus from 30s to 2s.
3. Copper over gold.
Qi's copper/gold relative-value model is back in macro regime for the first time in over a year. August's dollar reversal opened a -1.1σ (10.8%) gap. Not a bearish gold call - simply that copper offers the better entry here.
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