Inflation breakeven rates contracting is bullish signal for 2026: Renaissance Macro's deGraaf

Scott Wapner (Anchor) 00:00.150

the charts are telling a bullish signal for stocks we're joined now by jeff degraff he's chairman of renaissance macro it's good to see you

Jeff de Graaf (Chairman) 00:06.870

cowboy good to see you scott thank you nice backdrop i'll tell you if you're if you're coming out west don't come to ski i'll tell you it's better to suntan than it is to ski this year so

Scott Wapner (Anchor) 00:15.390

i heard actually there was there was no snow but there's beauty that is for darn sure all right so i i painted this as a bullish signal in the charts for stocks how so

Jeff de Graaf (Chairman) 00:28.780

well look i think there's a couple things that are happening that's that's bullish and the first is that real yields are contracting off of the inflation print last week and i think one thing that investors historically underestimate even though certainly it's on the radar is

Jeff de Graaf (Chairman) 00:41.380

just the importance of inflation inflation is far more important than growth and so a contraction in inflation if we're going in that in that direction from the trajectory of the of the data last week certainly sets up bullishly for two thousand twenty six so we're hopeful we're

Jeff de Graaf (Chairman) 00:54.540

not in the zone yet where it's you know it's really a lock but certainly the trajectory is going in the right direction and and we're we're hopeful that that is the tailwind for twenty twenty six you know when

Scott Wapner (Anchor) 01:04.150

when gold had been going up so consistently it made people nervous like what's the message in that is it something to be worried about you're suggesting that global metals looking good as a bullish sign are you talking about another record today for example in gold and silver

Scott Wapner (Anchor) 01:20.870

are you talking about those as well as some others

Jeff de Graaf (Chairman) 01:24.510

yeah it's everything scott and and i'll i'll be honest with you in terms of scoring that with the inflation picture i'm not sure you know we totally understand what exactly is going on with that narrative but i would say look at aluminum look at steel look at copper obviously

Jeff de Graaf (Chairman) 01:37.350

look at gold silver look at palladium they're all all bullish breakouts and most of them are just coming out of these these big bases so i think there's more to go there certainly i think it's as much about most likely what we're seeing from an improvement in global activity and

Jeff de Graaf (Chairman) 01:51.550

and you hit the nail on the head which is these are global in nature this isn't just freeport breaking out in fact i'd say freeport 's one of the laggards we were seeing a lot of bullish checkouts in china we're seeing it in europe and obviously we're seeing some of those here

Jeff de Graaf (Chairman) 02:03.430

in the US as well

Scott Wapner (Anchor) 02:05.110

you know software has been an underperformer we talk about it all the time because the relationship that it has not only in the AI trade but to the you know underperforming relative to semis for example it still looks bad according to you

Jeff de Graaf (Chairman) 02:19.710

yeah it does we had you know confirmation we had a bearish signal that took place back in july and we had confirmation of that this just this last week and you know i know all the the the the news circling around oracle but it's far greater than that and so you know until we can

Jeff de Graaf (Chairman) 02:33.790

see the whites of their eyes that we think that there's some type of pause or some bottom forming there we're just staying away from those names and i think refreshingly the semiconductors have stayed firm they look good calm equipment names look really really good they're

Jeff de Graaf (Chairman) 02:46.270

actually leadership in in the tech space so focus our efforts there but it's also an interesting message because we're seeing exactly the same thing not just in tech but we're seeing it in everything where i can show you charts that are actually outright bearish not relative

Jeff de Graaf (Chairman) 03:00.350

laggards but just outright bearish charts and i can show you at the same time outright bullish charts within the same sector that's everything from discretionary to industrials to tech to staples and the like so it's really a bifurcated market i don't think that's bad but

Jeff de Graaf (Chairman) 03:13.750

certainly there's opportunities on both sides

Scott Wapner (Anchor) 03:16.240

what's what's bitcoin telling you it's you know it hasn't looked good to to say the least but what do you think the charts are saying

Jeff de Graaf (Chairman) 03:23.270

well i think all the crypto is under pressure bitcoins actually the best one out of all of them so you know we keep our eye on that obviously it's a little bit more established you look you broke the qualitative uptrend line i think that's bad news the fifty day cross from the

Jeff de Graaf (Chairman) 03:35.990

two hundred day you're really you have to take some artistic license to call it an uptrend still so we think at best it's a neutral trend we'd actually put it in the downtrend camp the good news is the ETF flows as we've seen them in as we measure them have gotten excessive

Jeff de Graaf (Chairman) 03:48.950

outflows i should say and so usually you find some type of relief on a very tactical basis there so i think we're set up for a decent year in rally in bitcoin i don't think it trades much higher than a hundred thousand if we can even get that and we'll be using that as an

Jeff de Graaf (Chairman) 04:01.470

opportunity to lighten up on positions and and frankly get short some of those