GS dropped Apple from its conviction list. The stock is down.
Down hard (-29% at the open) after signaling a material weakness. Vacant office properties, and the irony of investors touting NYCB as one of the winners of the regional bank 2023 mess.
Fed folks are announcing that cuts are on the horizon in 2024 (Mester said to expect 3 cuts, and Williams said it will happen later in the year). So, the message is clear in the US. But across the pond, the ECB noted that cutting too soon would be worse than delaying cuts. Inflation has been slowing there, but it missed optimistic forecasts, landing at 2.6% for headline and >3.0% for core. But if you look at the Apollo chart below, perhaps US Fed folks are just taunting us, and really, they’re more in the ECB camp. Their Chief Economist just came out today saying he doesn’t think the Fed will cut rates in 2024.
Japan’s factory activity shrunk at the fast pace since Aug 2020, yet its markets were up a lot (Nikkei 1.90% + Topix 1.26%). China’s official PMIs were mixed because of Lunar New Year adjustments, and its markets were up a lot less (Hang Seng 0.47%, Shanghai 0.39%, Shenzhen 1.12%, ChiNext 0.94%).
If you were sniffing out AI-related stocks outside of NVDA, you might have bought sleepy-ole Dell. It’s up based on server sales for AI biz.
BofA listed key flows:
• Cash: YTD inflow annualizing $1.4tn…which would represent a record pace
• Crypto: $2.4bn weekly inflow, after $1.2bn last week, $2.6bn the week prior. Not surprising given the major comeback. Crypto inflow is annualizing a record $44.7bn for the year.
• IG bonds: $7.5bn inflow, which equates to an annualized $0.5tn…which would be a record year.
• Tech: $4.7bn inflow, the largest since Aug of last year, with its inflow annualizing a record $98.8bn
• EM stocks: 1st outflow since Nov 2023, driven by China outflow
Thanks a lot, BTIG, for the bummer of a reality check this morning. Their note reminded us that the US’ debt is rising $1 trn every 100 days ($32 trn to $33 trn took 92 days, $33 trn to $34 trn 106 days, $34 trn to $35 trn will take 95 days). Loose policy and spending on intl conflicts drove the US budget deficit in the past 4 years to 9.3% of GDP.
Japan’s Euda told folks to zip-it about a rate hike this month. It’ll be later, more like April.
If you want palace intrigue, read the BBG story out today about Monaco royals’ deals bringing “Peril to the Palace.” I didn’t have time to finish the article, but spoiler alert—expect to see this on Netflix.