Ted Darling Profile picture
Dec 11 23 tweets 10 min read
🐻♉️↗️↘️↔️⚠️🚩🔺🔻🧮 💰

#CPI Preview
1/10

One 🤡 calls it #macrotourism, but #CPI and #FOMC policy response are the single most important issues to macro investors today.

Let’s dig into the 🧮!
2/10

At his Brookings Institute speech at the end of November, Powell broke core #inflation into 3 components:

a) goods inflation
b) housing services inflation
c) services, ex-housing = wages
2a/10

Goods inflation is clearly coming down along with inputs into that equation.

$COOPER +10.65% in November is nonetheless -13% YTD
2b/10

$LUMBER is -64% YTD
2c/10

$COTTON -28% YTD
2d/10

The cost of transporting those goods from places far away have also fallen dramatically, with the #FBX -73.4% YTD

Chart: Freightos Baltic Index (FBX)
2e/10

Used car 🚗 prices, an early driver of inflation, are now little changed on a y/y and m/m basis per #MainheimIndex
3a/10

Food and energy prices have also fallen significantly since the June/July peak

Chart: 🌾$DBA -1.0% YTD
3b/10

Can this be true? The cost of fueling your vehicle is down significantly

Chart: ⛽️ $GASO -7.4% YTD and crashing 📉
4/10

Rents, a proxy for shelter costs which comprise 42% of the #CPI and a lagging indicator among lagging indicators, are +7.8% y/y and -0.97% in November.

Chart: Rent Report for November from Rent.com
5/10

But here’s the problem - #wages

To quote Powell, "nominal wages have been growing at a pace well above what would be consistent with 2 percent inflation over time."
5a/10

The market wobbled on December 2 with the release of the November payroll report

Chart: Wages accelerated to +5.1% y/y in the November #NFP report
5b/10

The market wobbled again on Friday with the release of #PPI +7.4%.

The area of specific concern: the index for services for intermediate demand increased 6.7%, the largest 12- month advance since rising 7.9 percent in May.

Service = #wages
6/10

In advance of #PPI, $TNX had declined -81 bps from the October peak, abruptly reversed course on Friday, rising 17 bps

Chart: $TNX holding trend support
6a/10

$TLT, effectively, the inverse of $TNX, had rising 17% off the October bottom, but gave back 3% on Thursday and Friday

Chart: $TLT stopped in its tracks upon the release of #PPI
7/10

Equity indices, which rose in concert with $TLT (0.2 correlation), gave back some of the October - November gains.

Chart: $SPX -3.37% and a SELL signal on the weekly chart.
8/10

Positive vanna and charm flows from $1 T in notional options expiration this coming Friday were no match for the macro forces (rising wages and persistent inflation) at play.

Chart: $VIX +377 bps on the week a signaling BUY
9/10

With wages continuing ↗️, there is more work to do, per Powell:

"Policies to support labor supply are not the domain of the Fed: Our tools work principally on demand. Job growth remains far in excess of the pace needed to accommodate population growth over time (100K/m)."
9a/10

Notably, both the market and the Treasury have been fighting the Fed.

In particular, Yellen had projected a TGA build to 700B by 12/31. Instead, she has released over -79B from the account last week and no where near 700B.

Chart: TGA to 432B
10/10

#CPI headline consensus = +7.3% y/y down from +7.3% in October

#CPI core consensus = +6.1% y/y down from +6.3% in October

The 🔑 number to watch is core #CPI, which will remain 🛗 and perhaps higher than consensus.
10a/10

With the market and the Treasury fighting 🥊 the Fed, expect a hawkish 🦅 50 BPS hike on Wednesday.

Likely, that is NOT priced in

You know what to do

Have a super profitable 💰 week!
Correction:

#CPI headline consensus = +7.3% y/y down from +7.7% in October

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More from @tdarling1

Dec 9
Hello Friday and the week to date

$USD +0.25%
$GBP -0.41%
$GOLD -0.48%

$TLT +1.94%
$TNX -0.43%
$HYG -0.69%

$SSEC +1.62%
$NIKK +0.44%
$DAX -1.82%
$SPX -2.65%

$COPPER +0.78%
#Bitcoin +0.77%
$SILVER +0.00%
$DBA -1.01%
$NATGAS -5.1%
$WTIC -10.65%

Let's dig into the 🧮!
Asia closes the week on an ↗️🎵

$NIKK 27901 +1.2%
$SSEC 3207 +0.3%
$TWII 14705 +1.05%
$HSI 19901 +2.3%
$KOSPI 2389 +0.76%
$IDX 6715 -1.3% 🇮🇩

Australia ↗️
$ASX 7213 +0.55%

India ↘️
$BSE 61977 -0.95%
Europe trading ↔️

$DAX 14295 +0.2%
$FTSE 7476 +0.05%
$CAC 6646 unch
$AEX 722 +0.2%
$IBEX 8243 +0.2%
$MIB 24203 unch
$SMI 11022 +0.15%
$MOEX 2170 -0.2%

$VSTOXX 21.78

$DAX range = 14094 - 14576 ♉️
Read 11 tweets
Nov 20
🐻♉️↗️↘️↔️⚠️🚩🔺🔻🧮 💰

Global Macro Review
11/20/2022

🧵 1/7

#Recession cometh
Are you positioned accordingly?

Chart: Conference Board Leading Economic Index -3.2% over the past 6 months conference-board.org/topics/us-lead…
1a/7

The 10Y3M treasury spread, as a standalone indicator, has predicted recession with 98% accuracy.

Chart: 10Y3M Treasury Spread to -52 bps
1b/7

According to this Richmond Fed article, when both the LEI and 10Y3M are flashing #recession, there is a 99% chance of recession ahead.

richmondfed.org/publications/r…

Chart: Recession Indicators
Read 12 tweets
Nov 18
Hello #OPEX 🌊 and the week to date

$USD +0.41%
$GBP +0.25%
$GOLD -0.34%

$TLT +2.49%
$HYG -0.63%
$TNX -1.0%

$DAX +0.29%
$SSEC -0.32%
$NIKK -1.29%
$SPX -1.4%

$NATGAS +8.33%
$DBA -1.0%
#Bitcoin -1.93%
$SILVER -3.18%
$COPPER -5.63%
$WTIC -9.5%

Let's dig into the market 🧮!
Asia closed on a ↘️🎵

$NIKK 27900 -0.1%
$SSEC 3097 -0.6%
$TWII 14505 -0.2%
$HSI 17993 -0.3%
$KOSPI 2444 +0.05%
$IDX 7082 +0.5% ⬅️

Australia ↗️
$ASX 7152 +0.25%

India ↘️
$BSE 61504 -0.4%
Europe with a persistent bid ↗️ ♉️

$DAX 14412 +1.0%
$FTSE 7393 +0.65%
$CAC 6641 +1.0%
$AEX 714 +0.75%
$IBEX 8107 +0.8%
$MIB 24634 +1.2%
$SMI 10993 +0.7%
$MOEX 21896 -0.75% ⬅️

$VSTOXX 21.35

$DAX range = 13563 - 14576 ♉️
Read 11 tweets
Nov 16
Hello 🐫 day!

Did anyone else notice that the $USD is now 🐻 trend?

If it stays that way, the implications for risk assets are quite ♉️. And that's you're set up for the 🐫

Let's dig into the market 🧮!
Asia closed ↔️ to ↘️

$NIKK 28028 +0.15%
$SSEC 3120 -0.45%
$TWII 14537 -0.05%
$HSI 18256 -0.45%
$KOSPI 2477 -0.1%
$IDX 7104 -0.3%

Australia ↘️
$ASX 7122 -0.25%

India ↔️
$BSE 61811 -0.1%
Europe has been 🔥 but mostly ↘️ this morning

$DAX 14274 -0.75%
$FTSE 7389 +0.25%
$CAC 6633 -0.15%
$AEX 716 -0.05%
$IBEX 8130 -0.7%
$MIB 24625 -0.3%
$SMI 10957 -0.65%
$MOEX 2222 unch

$VSTOXX 21

$DAX range = 13413 - 14612 ♉️
+6.1% over the past 3 months
Read 11 tweets
Nov 15
Hello Tuesday!

Big move 🚀 overnight in Hong Kong 🇭🇰 and the ♉️ continues to sniff around China 🇨🇳 with G20 making headlines in Indonesia as oil 🛢️continues to soften

Let's dig into the market 🧮!
Asia mostly ↗️

$NIKK 27990 +0.1%
$SSEC 3134 +1.65%
$TWII 14546 +2.6%
$HSI 18343 +4.1% 🚀
$KOSPI 2480 +0.25%
$IDX 7035 +0.25%

Australia ↔️
$ASX 7142 -0.05%

India ↔️
$BSE 61683 +0.1%
Europe ↔️ and overextended

$DAX 14282 -0.2%
$FTSE 7387 +0.05%
$CAC 6628 +0.3%
$AEX 710 +0.5%
$IBEX 8134 -0.4%
$MIB 24527 -0.3%
$SMI 11017 +0.15%
$MOEX 2222 -1.0%

$VSTOXX 20.92

$DAX range = 13333 - 14552 ♉️
Read 11 tweets
Nov 14
Hello Monday!

Fed Governor Waller out with a reminder that your risk asset exuberance is misguided

Let's dig into the market 🧮!
Asia closed mostly ↘️ as Joe meets Xi

$NIKK 27964 -1.05%
$SSEC 3083 -0.15%
$TWII 14175 +1.2% 💾
$HSI 17620 +1.7% ⬅️
$KOSPI 2475 -0.35%
$IDX 7109 +1.0%

Australia ↘️
$ASX 7146 -0.15%

India ↘️
$BSE 61710 -0.15%
Europe trading ↗️ ♉️

$DAX 14248 +0.15%
$FTSE 7357 +0.55%
$CAC 6613 +0.3%
$AEX 704 +0.2%
$IBEX 8113 +0.2%
$MIB 24517+0.25%
$SMI 11079 -0.6%
$MOEX 2242 +1.1%

$VSTOXX 21.43 🔺

$DAX range = 13249 - 14466 🆕♉️
Read 11 tweets

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