🧵

1/

Stocks $SPY off to a strong start so far in 2023, gaining ~2% in first 5 days

- is this important?
- actually, it’s a big deal
2/
For 2023, pundits all reading off same menu:

- Fed gonna crush every rally until job market cracks + EPS going to fall in ‘23

- consensus thus, stocks fall in first half to 3,000 (S&P 500) and then maybe stocks recover to “flat” by YE
3/
Several issues with this consensus view:

- stocks rarely “flat” after a year (11% instances) and far more likely to rise >20% (53% of time)

- volatility matters more than EPS = Fed is key

- we see roadmap for volatility to sink sharply in 2023, already happened with bonds
4/
While EPS intuitively seems important, post a “negative year” it doesn’t factor in:

- it is all about what $VIX does

- #VIX down means stocks have 83% chance of rising in ‘23 and median gain >20%

- EPS up or down has little impact
5/
Fed is key is volatility.

- and this means it’s all about #inflation

- if #CPI tracks softer than consensus, this is dovish = lower volatility

- inflation shocked markets in 2022 = surging volatility

- but since Oct, opposite happened
6/

Our #FSInsight clients have received extensive analysis by us showing inflation is tracking to be far lower than many expect

- in fact, supports idea inflation largely #transitory

- too much to cover here

- Get the “first word” at fsinsight.com/our-services @fs_insight

• • •

Missing some Tweet in this thread? You can try to force a refresh
 

Keep Current with Thomas (Tom) Lee (not the drummer) FSInsight

Thomas (Tom) Lee (not the drummer) FSInsight Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @fundstrat

Dec 29, 2022
🧵
1/

After a horrendous year 2022, low expectations for 2023:

- mainly negative “E” from recession/EPS
- plus “tight” Fed

Positive catalysts = 2023 probably far better than “muted” expectations

Read on…
2/

“Mission accomplished” on 2% inflation

- inflation ⬇️ faster than markets expects
- Core PCE (#Fed measure) inflation ann. 2.6% in Nov
- this is 3M annualized, and ex-housing

At this pace, Dec ‘22/Jan ‘23, could show 3M ann. Core PCE ex-housing ~2.0%-ish and overall <3%
3/

Inflation falling faster than expected would also surprise @federalreserve

- at last FOMC mtg,
- #Fed forecast YE2022 (Dec) Core PCE to be 4.8% YoY
- requires Dec MoM to be 0.65%, or 4X pace of Nov

Actual YE PCE inflation tracking to 4.2%, or 60bp less
Read 10 tweets
Dec 23, 2022
Did the #ransomware attack at @HaverAnalytics result in an inadvertent #FOMC projection error?
🧵

1/5

#FOMC presser (12/14) contained a statement by #Powell that seemed at odds with incoming data

- #Powell said “we’re going into next year with higher inflation” vs Sept FOMC
2/5

As their SEP (survey of economic projections) shows:

- ‘22 raised 4.8% vs 4.5%
- this raised 2023 inflation
- and added to “higher for longer”
3/5

But here is what is at ‘odds’

- the MoM% chg in inflation
- would have to be staggeringly high to get to #Fed 4.8%
Read 5 tweets
Nov 4, 2022
While Fed chair #Powell was "hawkish" in FOMC presser, his statements revealed key factors to "dovish" path

- labor “I don’t see the case for real softening just yet.”
- inflation “we haven’t seen inflation coming down.”
- housing “still some significant increases coming”

1/10
Labor statement below:
- Powell says no sign softening
- yet today's jobs report shows unemployment rate rose +0.2% to 3.7%
- that is a sign of softening

2/10
Inflation, Powell says haven't "seen inflation coming down"
- yet prevalent and widespread signs of price increases cooling
- see prior thread



3/10
Read 10 tweets
Apr 3, 2020
What we cover on #fsinsight member call today at 1pm ET.

- NY state outperforming best case Cuomo models
- Top 8 states (50% GDP) outperforming NY
- Why case growth marks relative bottom
- If Oct 08 (not Mar 09), what worked

Sign up for free trial fsinsight.com

1/4
8 states are 50% of US GDP
- CA, TX, NY, FL, IL, PA, OH, NJ
- of these, NJ is doing worse than NY

NY state is 4,750 cases per 1mm people, or 1 in 200 has COVID-19 confirmed. Could be 1 in 20 based on missed tests.

2/4
Italy stock market, FTSE MIB started to outperform global stocks when new cases peaked on 3/21/2020.

- market focuses on cases because cases lead hospitalizatoins which lead mortality.

- thus, cases is key metric

- for US, we believe NY state is the key state to watch

3/4
Read 4 tweets

Did Thread Reader help you today?

Support us! We are indie developers!


This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Don't want to be a Premium member but still want to support us?

Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal

Or Donate anonymously using crypto!

Ethereum

0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy

Bitcoin

3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Follow Us on Twitter!

:(