Profiles in Credit – Focusing on 2023 with Geoff Castle and Callum Thomas
December 15, 2022

Profiles in Credit – Focusing on 2023 with Geoff Castle and Callum Thomas

In this episode Geoff Castle, Fixed Income Portfolio Manager, catches up with Callum Thomas, founder and head of research of Topdown Charts for their annual podcast.

Subtitle: Actionable insights from a sea of economic and market data. 

Geoff and Callum reflect on 2022 and look ahead to 2023. Geoff and Callum revisit their prior conversation and discuss how their understanding of the market has evolved over the year and what 2023 may bring. As is tradition, Geoff and Callum also do a deep dive on a variety of topics with a focus on recession, the US dollar, precious metals and more. The podcast ends with a recommendation from Callum and his thoughts on ChatGPT.

Key Takeaways

[00:54]Geoff reviews Callum’s 2022 forecasts from last year’s podcast. These included the meltdown in technology, rising interest rates, some of the effects on FX and the overall market.
[01:28]You focus on your process regardless of what outcomes you get. How do we recognize what worked well and make sure we do more of that.
[03:30]Callum discusses how he develops forecast narratives by looking at two dozen leading indicators.
[04:26]The data that are pointing to a recession in 2023 with a potential improvement in 2024.
[08:04]“Leading indicators may be pointing in one direction but something else can come along, like a pandemic, that could confound the outlook completely.”
[08:46]Some factors which could create upside and downside surprises.
[11:29]Callum talks about staying up to date on impending geopolitical events. But he also cautions: “You can spend a lot of time, or you can waste a lot of time on geopolitics unless it's a hobby.”
[12:47]Callum talks about the possibility of a global recession in 2023 and who enters it first and exits first.
[15:05]Callum discusses his thesis for further downside in commodities in the short term.
[18:09]Geoff asks Callum for recommendations on what to invest in against a recession backdrop.
[22:35]Geoff and Callum discuss tiers of credit and the interplay between duration and credit.
[24:20]They discuss the outlook for inflation and the expectation for the 10-year US Treasury at the end of 2023.
[33:00]Geoff asks Callum where to invest if the US dollar reverses course.
[38:28]They discuss the outlook for precious metals against a weakening US dollar.
[46:42]Geoff asks about Callum’s 2023 “60/40” portfolio and value vs. growth.
[47:23]Geoff asks Callum about what he’s reading now. Callum talks about AI and signing up for ChatGPT.

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