Benjamin Franklin believed in free trade. “No nation was ever ruined by trade,” he said, adding, “even seemingly the most disadvantageous.”

Now fast forward to equity markets today; world trade in volume is one of the seven macro rules embedded in the artificial brain of TrackMacro, Gavekal-IS’ software providing real-time investment portfolios.

Last month, TrackMacro issued a “strong” signal on trade. World trade is anticipated to boom.

Does this mean equities should rally?

Entering December, the Gavekal TrackMacro model turned positive on world trade from neutral. Is TrackMacro misreading international trade? If not, how can ‘trade’ be accelerating in an environment of rarefied liquidity?

Oxymorons are powerful combinations of contradictory meanings. In practice, oxymorons tend to develop at the margin and at the boundary conditions of a theory, or of a stable environment. Thus, they can reflect instabilities, contradictory forces, potential regime shifts etc. For this reason, they must be taken seriously. World trade is, today, behaving like an oxymoron…