That’s when the US CPI print comes out. Option costs around the event are up; options are pricing in a +/- 1.8% move. A few weeks ago, traders placed the top Fed rate at 5%. Last week that moved up to 5.2%. Philly Fed Prez Harker said he believes rates will be above 5%, and Minni Fed Prez Kashkari...
Read moreWe’re back to “good news is bad news” this morning. US consumer sentiment is at a high, supporting the stronger growth story (and hence the higher rates for longer story). If stocks stay pressured today, we’ll see the S&P stop its 2-week bounce. The S&P was in the green this AM but red now, ...
Read moreInvestors cut $300bn of bearish stock positions, and currently they are closer in-line with historical periods. So, folks who were underweight are now weighted closer to the ave of the prior decade, per NOSO. It’s the closest to neutral positions since 2Q22, per JPM and DB data....
Read moreUsed-vehicle prices increased by 2.5% in Jan, per auctioneer Manheim. We wonder if we’ll hear Fed folks with a vote talk about sticky inflation today, on the back of Powell’s dovish comments yesterday, or whether we’ll get more coos from Williams, Cook, Barr, Kashkari and Waller....
Read moreThe Fed’s Powell is going to speak publicly today at 12:30pm ET at the Economic Club of Washington, which means that the market could swing either way, depending on which Powell we get today: dove or hawk. We’ll see if he talks about Friday’s Nonfarm Payrolls strength and lower Unemployment Ra...
Read moreThe VIX is showing around 19.5 this morning pre-market. It was around 18 just last week. Might be a good time to reduce a bit of exposure if you were riding high in the past few months. As JPM pointed out, investors are more comfortable chasing the market these days. There’s a rebound in the Bull-...
Read moreAs Groundhog Day was yesterday (and we are expecting six more weeks of winter), US hiring increased significantly in Jan, with the jobless rate falling to a 53-year low. Nonfarm payrolls increased by 517k, after a revised figure of 260k in Dec. The unemployment rate dropped to 3.4%, the lowest since...
Read moreThe more he talked, the higher the market went. The Fed hiked by 25 bps and, try as he might to be strong and talk about high inflation for services ex housing, talked a lot about moderating inflation otherwise as the “disinflation process has started.” Sure, he mentioned strong labor, but overa...
Read moreWe’ll see how he wields it today in the Q&A after, most likely, raising rates again another 25bps. If there is a surprise 50bps hike, then I should have titled this note When Doves Cry. The fun starts at 11am PT and 2 pm ET. As a reminder, though, March is the bigger meeting because the Fed releas...
Read moreThe Labor Dept released data showing that US employment costs increased more slowly than expected in the final months of 2022. This ties to a moderating inflation theme that investors are hoping the Fed considers. The employment cost index, which is a gauge of wages and benefits, increased by 1% in ...
Read moreThis week we’ve got: Tues: China PMIs along with Eurozone GDP and US Consumer Confidence Wed: The Fed along with Eurozone CPI, Unemployment Rate, and various Manufacturing data points Thurs: The ECB with the BOE, and then US employment data. Plus, even though they’re not macro data points, Apple...
Read moreTrading session ranges mostly have waffled between fairly narrow and extremely wide. So, anyone trying to make sense of trends is stuck pontificating about by a few extremely anticipated news items. Not a huge confidence builder to sustain rallies on. Next up are (i) the Fed’s hike and comments an...
Read moreThat’s the 200 DMA that has been a sticky top for the S&P. Technicians point to 4100 and 4325 as hurdles before investors can have a sustained rally. We point to slowing growth and sticky inflation as the culprits. Advanced GDP Investors are happy with the number, which shows the economy is growin...
Read moreAs of this morning, we were 92 companies into the 500 reporting for the S&P during earnings season. Per 42Macro, results overall have beaten consensus (rev +0.5%, EPS +2.2%), but those are the lowest levels of this biz cycle, and so are their tracking growth rates (+5.5% and -2.4% y/y, respectively)...
Read moreYesterday, the S&P closed above both (i) its 200 DMA and (ii) its natural resistance at 4000. We caution not to get too excited about buying dips until we get past the summer peak of 4325. We’ve seen this movie before and know volatility can move markets in either direction until we get a more con...
Read moreWe’ve got a lot of big-name earnings again this week, from $MSFT to $TSLA. An NABE survey states that almost 20% of US firms expect to reduce headcount in the next few months, and we expect we’ll continue to hear about reductions from the tech side. $SPOT just announced a 6% cut too. RBC noted ...
Read moreAAII revealed that investors who classify themselves as “bullish” increased to the 2nd highest reading since Aug. As of yesterday, though, the S&P fell to roughly the midpoint between its Dec trough and Jan’s top. The recent equity decline reflects a market landscape that makes it more difficu...
Read moreThe debt ceiling negotiations are the political version of David Simon’s classic tv show. Rational folks want to find a path before the estimated June time bomb explosion, when the US could default on payment obligations. Today we’re reaching the $31.4 trn debt ceiling, so the Treasury will depl...
Read more