๐ปโ๏ธโ๏ธโ๏ธโ๏ธโ ๏ธ๐ฉ๐บ๐ป๐งฎ ๐ฐ
Macro Review ๐งต
01/15/2023
1/11
Core #CPI running at +3.1% SAAR confirmed #Goldilocks for Q422 and catalyzed a ๐ in equities, metals, and hydrocarbons
#Core CPI - 3-month SAAR
Dec - 3.1%
Nov - 4.2%
Oct - 5.7%
Chart: #CoreCPI 5.7% ๐ป
Macro Review ๐งต
01/15/2023
1/11
Core #CPI running at +3.1% SAAR confirmed #Goldilocks for Q422 and catalyzed a ๐ in equities, metals, and hydrocarbons
#Core CPI - 3-month SAAR
Dec - 3.1%
Nov - 4.2%
Oct - 5.7%
Chart: #CoreCPI 5.7% ๐ป
1a/11
Despite all the recession talk - including my own, the @AtlantaFed #NowCast is projecting Q4 growth of +4.1%, an acceleration.
Growth ๐บ + Inflation ๐ป = #Quad1 #Goldilocks
Chart:
Despite all the recession talk - including my own, the @AtlantaFed #NowCast is projecting Q4 growth of +4.1%, an acceleration.
Growth ๐บ + Inflation ๐ป = #Quad1 #Goldilocks
Chart:
https://twitter.com/AtlantaFed/status/1612873854694658051?s=20&t=yjGQQ6rAdazN3jS13PT73g
2/11
While #Quad1 #Goldilocks may be good for risk assets, itโs decidedly poor for the $USD, which continued โ๏ธ and took out the 50% retracement level of 102.12
Chart: $USD -1.64% (w) -9.94% 3M = T = Trend
While #Quad1 #Goldilocks may be good for risk assets, itโs decidedly poor for the $USD, which continued โ๏ธ and took out the 50% retracement level of 102.12
Chart: $USD -1.64% (w) -9.94% 3M = T = Trend
3a/11
With a -0.76 correlation to the $USD over (T) duration, $GOLD +2.78% continued to ๐ and is now +18.7% off the October lows and VERY OVERBOUGHT
Chart: $GOLD +5.23% YTD
With a -0.76 correlation to the $USD over (T) duration, $GOLD +2.78% continued to ๐ and is now +18.7% off the October lows and VERY OVERBOUGHT
Chart: $GOLD +5.23% YTD
3b/11
Dr. $COPPER turned decidedly โ๏ธ the week ending 11/11/22 and has been๐ฆbullish Trend ever since, front running China re-opening announcement by over a month.
Chart: $COPPER +7.8% (w) +23.9% (T)
Dr. $COPPER turned decidedly โ๏ธ the week ending 11/11/22 and has been๐ฆbullish Trend ever since, front running China re-opening announcement by over a month.
Chart: $COPPER +7.8% (w) +23.9% (T)
4/11
Declines in energy costs in December nearly offset the rise in shelter costs in the #CPI report. The commensurate real wages โ๏ธ put pressure on hydrocarbons this week = sowing the seeds #Goldilocks early demise
Chart: $GASO +13.39% (w) -3.67% (T)
Declines in energy costs in December nearly offset the rise in shelter costs in the #CPI report. The commensurate real wages โ๏ธ put pressure on hydrocarbons this week = sowing the seeds #Goldilocks early demise
Chart: $GASO +13.39% (w) -3.67% (T)
4a/11
๐ Importantly, I want to note that oil ๐ has fallen to multi-month lows as speculators have been shaken from the market.
Time to get long energy ๐ข folks.
Chart: $OVX 38.19 at the lowest level in a year.
๐ Importantly, I want to note that oil ๐ has fallen to multi-month lows as speculators have been shaken from the market.
Time to get long energy ๐ข folks.
Chart: $OVX 38.19 at the lowest level in a year.
5/11
While the "the food index increased +10.4% over the last yearโ in the December #CPI report, grains have been decidedly subdued since peak inflation in June.
Chart: $DBA -0.15% (w) -2.64% (T) could be the next to join the โ๏ธ party
While the "the food index increased +10.4% over the last yearโ in the December #CPI report, grains have been decidedly subdued since peak inflation in June.
Chart: $DBA -0.15% (w) -2.64% (T) could be the next to join the โ๏ธ party
6/11
With event risk behind us, the $VIX ๐ป to 18.35, a 1-year low and supporting equity prices as both realized and implied vol fall.
Chart: $VIX 18.35 has some calling for long zee puts, but Iโm not so sure
With event risk behind us, the $VIX ๐ป to 18.35, a 1-year low and supporting equity prices as both realized and implied vol fall.
Chart: $VIX 18.35 has some calling for long zee puts, but Iโm not so sure
6a/11
Small caps led ๐บ๐ธ equity indices โ๏ธ
Chart: $IWM +5.33%
Small caps led ๐บ๐ธ equity indices โ๏ธ
Chart: $IWM +5.33%
6b/11
High beta โฃ๏ธ low beta by a wide margin
Chart: $SPHB +5.96% (w) compared to $SPLV -0.43% (w)
High beta โฃ๏ธ low beta by a wide margin
Chart: $SPHB +5.96% (w) compared to $SPLV -0.43% (w)
6c/11
Growth had a slight edge over value
Chart: $SPYG +2.78% (w) compared to $SPYV +2.7% (w)
Growth had a slight edge over value
Chart: $SPYG +2.78% (w) compared to $SPYV +2.7% (w)
6d/11
With real wages rising, consumers ostensibly have more ๐ฐ in their pockets to spend.
Accordingly, consumer discretionary led US Sectors โ๏ธ while Staples -1.37% on the week.
Chart: $XLY +5.78% (w) +3.27% (T)
With real wages rising, consumers ostensibly have more ๐ฐ in their pockets to spend.
Accordingly, consumer discretionary led US Sectors โ๏ธ while Staples -1.37% on the week.
Chart: $XLY +5.78% (w) +3.27% (T)
7/11
A weak $USD has also catalyzed โ๏ธ moves in international indices over the past 3 months with both Europe and the Pac Rim showing outsized ๐ช
Chart: $DAX +3.26% (w) and +22.7% off the October lows
A weak $USD has also catalyzed โ๏ธ moves in international indices over the past 3 months with both Europe and the Pac Rim showing outsized ๐ช
Chart: $DAX +3.26% (w) and +22.7% off the October lows
8a/11
In bond land, the yield curve remains deeply inverted as the short-end has been ๐ by the Fed and bonds have rallied on slowing inflation and the prospect of #recession in the year ahead
Chart: 10Y3M to -118 bps
In bond land, the yield curve remains deeply inverted as the short-end has been ๐ by the Fed and bonds have rallied on slowing inflation and the prospect of #recession in the year ahead
Chart: 10Y3M to -118 bps
8b/11
Corporate bonds led bond ETFs โ๏ธ
Chart: $LQD +1.72% (w) +10.05% (T)
Corporate bonds led bond ETFs โ๏ธ
Chart: $LQD +1.72% (w) +10.05% (T)
9/11
Supporting all of this โ๏ธ ๐, 374B has come out of reverse repo (money markets) and into risk assets since the end of December ๐ฅ
It only takes 50-100B to move markets each day
Chart: Overnight reverse repo
Supporting all of this โ๏ธ ๐, 374B has come out of reverse repo (money markets) and into risk assets since the end of December ๐ฅ
It only takes 50-100B to move markets each day
Chart: Overnight reverse repo
10a/11
The big question for investors is how long can this #Quad1 #Goldilocks โ๏ธ last - especially as it runs into a ๐ฆ #FOMC on 02/01/23, one day after the Employment Cost Index (ECI) for Q422 is released.
Remember, this Fed is focused on wages aka "services ex-shelter"
The big question for investors is how long can this #Quad1 #Goldilocks โ๏ธ last - especially as it runs into a ๐ฆ #FOMC on 02/01/23, one day after the Employment Cost Index (ECI) for Q422 is released.
Remember, this Fed is focused on wages aka "services ex-shelter"
10b/11
Iโm inclined to agree with @BobEUnlimited that this #Goldilocks is transitory and that it will sow its own seeds of destruction as moribund commodities spring to life and as real wage gains spur a resilient consumer, pushing #inflation โ๏ธ
blog.unlimitedfunds.com/transitory-golโฆ
Iโm inclined to agree with @BobEUnlimited that this #Goldilocks is transitory and that it will sow its own seeds of destruction as moribund commodities spring to life and as real wage gains spur a resilient consumer, pushing #inflation โ๏ธ
blog.unlimitedfunds.com/transitory-golโฆ
10c/11
In the meantime, we will run a Goldilocks play ๐ in combination with our recession play ๐
Image: #Goldilocks play ๐
In the meantime, we will run a Goldilocks play ๐ in combination with our recession play ๐
Image: #Goldilocks play ๐
11/11
Despite extremely overbought conditions in equities, expect positive vanna and charm ๐ into #OPEX ๐ฅ as well as more #TGA spend as Janet front runs Congress & reverse repo ๐ฆ as chasers chase the 200-day #FOMO
Note $SPX resistance at 4075-4100 and have a super ๐ฐ week!
Despite extremely overbought conditions in equities, expect positive vanna and charm ๐ into #OPEX ๐ฅ as well as more #TGA spend as Janet front runs Congress & reverse repo ๐ฆ as chasers chase the 200-day #FOMO
Note $SPX resistance at 4075-4100 and have a super ๐ฐ week!
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