Episode summary
Talking Macro and Charts with Jurrien Timmer (Ep. 163)
Facts vs Feelings
· · 54 min · Hosts: Ryan Detrick, Sonu Varghese · Guests: Jurrien Timmer
Summary
Jurrien Timmer argued that the market is sitting on top of both a cyclical bull market and a longer secular bull market, with the latest leg beginning in late 2022 after rates reset from near zero to 5%. He said that valuation compression, not weak earnings, drove the 2022 selloff, and that the rally since then has been powered by a soft landing, fiscal support, and the AI boom.
He compared today’s setup to several historical periods, especially 1994, the late 1960s, and the late 1990s. Timmer said the late 1960s and post-COVID era both featured loose fiscal policy and sticky inflation, while the late 1990s offer a template for how a technology-led advance can turn into a valuation bubble if concentration becomes extreme.
On portfolio construction, Timmer favored a barbell approach: large-cap US equities on one side, and undervalued developed international equities on the other. He said Europe and Japan now offer more attractive valuations and stronger shareholder payout behavior, while gold and Bitcoin can help diversify against a world where bonds may struggle under fiscal dominance and financial repression.
Key takeaways
- Timmer said the S&P 500’s 2022 decline was mainly a valuation reset, with PE compression doing the damage while earnings rose 8%.
- He sees the current backdrop as a cyclical bull market on top of a secular bull market, which helps explain persistent momentum.
- Timmer argued that Europe and Japan are becoming more attractive because payout ratios have risen while valuations remain much cheaper than the US.
- He said gold is the cleaner hedge for bond stress, while Bitcoin fits as a scarce, diversifying asset in the same portfolio bucket.
- Timmer thinks the Fed is moving slowly toward neutral because sticky inflation and a softer labor market are pulling policy in opposite directions.
Notable quotes
“what we have right now is a bull market clearly that is not only cyclical but also secular”
“bond yields went from 1% to 5% % that is going to do a number on equity valuations”
“the S&P fell 28% in 2022. The PE fell like 33%. So it was all valuation earnings actually rose 8% that year”
“gold and bitcoin are negatively correlated against each other which is fascinating”
How the episode opens
Welcome to the Facts Versus Feelings podcast. I'm your host, Ryan Dietrich, and I'm joined by my co-host, Sonu Vargis. Cutting through the noise each week with Ryan Dietrich, chief market strategist, and Sona Vargis, VP, global macro strategist.
Taking out the boring and helping investors focus on what really matters. A quick note before we start the show. Investment advisory services offered through CWM LLC, an SEC registered investment adviser.
Carson Partners, a division of CWM LLC, is a nationwide partnership of adviserss. Hi everyone. Welcome to a very special episode of Carson's Facts Versus Feelings.
Episode 163. Ryan and Sonu here. Sono, we're joined by um someone I've looked up to for a long time.
I know someone we've wanted to have on our podcast for a very long time, Yurian Timmer over at Fidelity, the director of Global Macro. Uh Yurian, thank you so much for joining us. Thank you for having me.
It's a pleasure. So there's I mean I think I've got like 50 questions. I think Sony's got another 50.
Uh you know, we'll just dive in. You know, let's I I I think it's fascinating. You were born in Aruba and you grew grew up in Aruba.
When did you come to the United States and kind of how did that um growing up in that part of the world form kind of your view really of global macro right now? Yeah. So I'm um was How's your tan?
How's your tan? Yeah, you're a little Where you live, right? You're in Boston, right?
You're a little white looking. That's okay. I'm white.
Trust me. It's all right. My fan is non-existent.
Um, I was born and raised in Aruba on the island of Aruba. Uh, born there in 1962 and, uh, of Dutch parents.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- cyclical vs secular bull markets
- ai vs past transformative periods
- rising rates and valuations
- international equities eafe
- gold and bitcoin barbell strategy
Companies and tickers mentioned
- Fidelity
Watch the episode
Watch “Talking Macro and Charts with Jurrien Timmer (Ep. 163)” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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