Attack the Week (ATW)
November 12, 2023
I do love Airports. I have never missed a flight in my life, which should give you a strong indication that I am arriving well ahead of the stated departure time. I like the vibe of sitting in a coffee place and browsing shops for magazines I would like to read when off on holiday. As I flew on holiday last week, I arrived about 3 hours early. It was worth it.
The most intriguing part about airports and flying is the plane's boarding procedure. Every airline seems to have a slightly varied tactic when it comes to it. You are given a boarding sequence number and must wait until your number is up. I am talking about regular economy flights, of course. When flying business class, I try to keep myself in the lounge for as long as possible so that I don’t have to sit or hang around the gate for too long.
Standing in line for a flight, one can't help but notice the oddities in people’s queuing behaviour. Without fail, passengers would rush to form a line even before the boarding call. I have to admit that I usually feel the urge to join them; I don’t know why. There's an unspoken tension, a collective eagerness to secure a spot on the plane despite assigned seating. The 'early queuers' seem driven by the fear of missing out (FOMO)—a notion that if they're not at the front of the line, something might go wrong.
Then there are the 'calculators'—travellers who wait, eyes glued to the queue, trying to time their entry perfectly. They want to minimize the wait yet ensure they're not last. Observing the 'last-minute-ters' is equally intriguing. These passengers saunter in when the queue has dwindled, confident in their timing, indifferent to the hustle. I am not one of those, clearly.
The most annoying of them all are the opportunists, who wait on the sidelines of a queue to join in from the side, pretending that there are multiple queues. It is funny; there are not many things that can enrage me. Queue jumping is certainly on top of that list, however. I have lifted many “jumpers” out of queues and put them where they should be.
The airport queue, much like the investment world, is a microcosm of human behaviour. It showcases our tendencies — rational and irrational — and our varied approaches to risk, reward, and the anxiety of waiting. In both arenas, our behaviours are driven by similar fears, strategies, and hopes. It is an individualistic approach that everyone must master by themselves. And while the context may be vastly different, the underlying human elements are strikingly similar. The clear difference in investing, which adds to accentuated fear, is that someone might actually miss take off. Nobody wants to be in that camp. This partly explains the behaviour of many bond bulls over this year. Anticipating a recession and positioning pre-maturely, however, came at a significant cost. If not by capital losses, then by opportunity costs incurred. In the investment game, I am not aiming to board first or last. I am eager to place myself in the middle and ensure a good enough seat for the ride ahead.
Global markets will open the week to Moody’s US outlook downgrade from stable to negative. US government shutdown risks (deadline Friday) and President Biden's and President Xi Jinping's meeting Wednesday will keep markets on cautious footing.
US core CPI is a key data risk, with the consensus expecting 0.34% MoM. Euro Area Q3 GDP and ZEW data will be topical for ECB speakers. UK labour data and CPI are expected to soften, providing dovish risks for BoE but little reprieve for local markets.
Sweden's CPI will inform Riksbank pricing, whereas Japan’s GDP contraction may be glossed over. Norges' Q4 Expectations Survey will be relevant after the local inflation beat.
Q3 retail earnings will continue over the week. OPEC’s Monthly Oil Market Report (Monday) and Germany's constitutional court ruling on the supplementary budget (Wednesday) will make headlines.
Let’s dig deeper …