Kerr Neilson: US rates must go up
In a recent investor presentation, Kerr Neilson, CIO of Platinum Asset Management highlighted his belief that US rates must move higher. Neilson stated “we are already seeing distortions in the use of cash….the longer we leave this the greater the risks of misallocation become”. Continuing the theme he went on to say “If we don’t have (US) rates going up we are going to have pandemonium in markets at some stage”. In his upbeat appraisal of the US economy Neilson pointed to good signs coming from US jobs and housing markets. Recent increases in jobs advertised / days to fill vacancies and acceleration in the switching ratio have Neilsen looking for more labour price flexibility. He also sees similar strength in housing market indicators. Despite these signs of strength Neilson told investors, he sees better opportunities in other stock markets, highlighting that the strong USD is creating difficulties for US firms to show earnings progression because the S&P derives approximately 45% of its earnings from other currencies. To watch the full presentation click the &feature=youtu.be
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