Ted Darling Profile picture
Feb 5 23 tweets 11 min read
🐻♉️↗️↘️↔️⚠️🚩🔺🔻🧮 💰

Macro Review 🧵
02/05/2023

1/9

The #macro market has been hyper focused on growth and inflation dynamics

We got a slew of data showing inflation under control.

Yet one data point on Friday raised havoc with my portfolio.

Let’s dig into the 🧮!
2a/9

The Employment Cost Index #ECI came out on Tuesday, just prior to the #FOMC meeting

#ECI +1% Q/Q represented a deceleration in employment costs
#Inflation 🔻
2b/9

Home prices were also out on Tuesday.
At +8.2% y/y, housing costs continue to decline on an ROC basis
#Inflation 🔻
2c/9

ISM Manufacturing PMI was out on Fed Day.
At 47.4, the index showed a decal in manufacturing activity even as prices paid 🔺 44.5 from 39.5
#Inflation 🔺
2d/9

#JOLTs - a questionable metric - showed an increase in open positions to 11 million

The #FOMC increased the cost of money by 25 bps #Hawish25

#Inflation 🔺and the USD closed at 101.03, a fresh cycle low
2e/9

On Thursday both the #BOE and #ECB increased rate by 50 bps, perceived as a #Dovish50.

Stateside, initial jobless claims continued to slide to 183,000.
Growth 💪
2f/9

Nonfarm business sector labor productivity +3.0 percent in the fourth quarter of 2022 was also out on Thursday.

The USD put in a new low, but finished higher on the day. #Inflation 🔺
2g/9

#NFP showed a surprising surge in new jobs +517K

BUT unit labor cost +1.0% in Q4, +4.5% y/y (down from +5.2%)

Average Hourly Earnings +4.4% y/y, down from +4.8 and continuing to decel
#Inflation 🔻
2f/9

$TNX rose 20 bps on the news, but the $USD remained subdued
2g/9

Then at 10:00AM, ISM Services PMI showed an acceleration to 55.2 from 49.2

All hell broke loose, and they unleashed the Kraken

$USD surged immediately on the news and upended my portfolio.

3a/9

The $USD surged +1.02% on the week to close above the 50% retracement level of 102.12 but fell short of a buy signal n the weekly.

The $USD remains 🐻 Trend (T) = 3 months, but has my full attention.
3b/9

In #FX, the $GBP -2.74% and the $AUD -2.67% took the brunt of the USD abuse

Chart: $GBP with a sell signal on the weekly
4a/9

Metals also taken to the woodshed with $SILVER -5.12%, $COPPER -3.89% and $GOLD -2.74%

Chart: $COPPER with a weekly sell signal
4b/9

Chart: $GOLD with a weekly sell signal.

I hedged my $GLD position with April 165 puts.
Vol cheap at 15.
5a/9

If this PMI number signaled a new uptick in #inflation, then why did hydrocarbons get spanked?

$WTIC -7.89% (w) -20.75% (T)
$GASO -10.42% (w) - 15.02% (T)

Chart: $GASO ⛽️ ↘️ to key support at 2.32
5b/9

$NATGAS -15.42% (w) -45.1% YTD

Chart: Natty is -75% since the August high.
Certainly this is NOT inflationary
6/9

Grains fared much better with $SUGAR +2.19%, SOYB +1.49%, WHEAT +0.9%, and $CORN -0.81%

Chart: $DBA +0.96% on last week’s by signal buy still neutral trend
7a/9

Yields were little changed on the week with the 2Y +11 bps and the 10Y +1 bps bringing the 10/2s to near cycle lows of -77 bps

Don’t get me started on 10Y3M which finished the week -117 bps with the MOVE 98.99 🔻

Chart: 10/2s
7b/9

Bond ETFs were little changed on the week with the notable exception of $TIP -0.85% and $IVOL -2.93%

Chart: $IVOL - Interest Rate Volatility EFT tied to TIP - punished
8a/9

🇺🇸 equity indices continued to party with $IWM +3.91%, $COMPQ +3.31%, and $SPX +1.62%

Chart: The most watched chart on the planet, $SPX daily broke both the downtrend line and the 50% retracement level, but could not hold the fib
8b/9

Beneath the surface in sector land, $XLC +5.26% and $XLK +3.71% (2022 laggards) led higher, while $XLE -4.41%

Chart: $XLE with a definitive “get out of Dodge” signal on the weekly
8c/9

The $USD 🎳 did its job on $EEM -3.36% thought it is still +7.86% YTD
9/9

So, here we are with coincident and trailing data showing inflation 🔻 but the $ISM Services print giving cause for concern.

Will need to keep a sharp eye on the $USD as well as $TNX for the next move.

⚠️🚩 and have a super profitable 💰 week!

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More from @tdarling1

Feb 6
Hello Monday!

A risk-off to start the week that smells of 2022
$VIX 🔺
$TNX 🔺
$USD 🔺

Let's dig into the market 🧮!
Asia, ex-Japan, ↘️

$NIKK $27694 +0.65%
$SSEC 3239 -0.75%
$TWII 15393 -1.35%
$HSI 21222 -2.0%
$KOSPI 2439 -1.7%
$IDX 6874 -0.55%

Australia ↘️
$ASX 7539 -0.25%

India ↘️
$BSE 60523 -0.5%
Europe ↘️

$DAX 15337 -0.9%
$FTSE 7834 -0.85%
$CAC 7147 -1.2%
$AEX 755 -1.15%
$IBEX 9146 -0.85%
$MIB 26773 -0.65%
$SMI 11253 -0.85%
$MOEX 2262 +0.6% ⬅️

$VSTOXX 18.69 🔺

$DAX range = 15105 - 15639 ♉️
Read 12 tweets
Jan 29
🐻♉️↗️↘️↔️⚠️🚩🔺🔻🧮 💰

Macro Review 🧵
01/22/2023

1/9

Don’t you find it amazing how quickly the phrases “Transitory Goldilocks” and “Immaculate Disinflation” have entered the #macro vocabulary?

Where did they come from? Why?
2a/9

Let’s start with “Immaculate Disinflation”

Core #PCE rose .72% in Q4 2022 or +2.88% annualized.

The Fed has to be pleased with this, but given the pace of rate hikes, this is not all that surprising

Chart: Core #PCE
2b/9

Wages have also started to decelerated quickly - now +4.6% y/y

Chart: US average hourly earnings y/y
Read 20 tweets
Jan 27
Hello Friday and the week to date

$GBP +0.12%
$GOLD +0.1%
$USD -0.19%

$TLT +0.73%
$HYG +0.29%
$TNX +0.26%

$COMPQ +3.34%
$NIKK +3.05%
$DAX +0.66%

$DBA +2.16%
#Bitcoin +1.47%
$COPPER +0.47%
$SILVER +038%
$DBC -0.16%
$WTIC -0.77%
$NATGAS -10.13%

Let's dig into the market 🧮!
Asia finished the week on ↗️

$NIKK 27383 +0.05%
$SSEC 🐰
$TWII 14933 +0.05%
$HSI 22689 +0.55%
$KOSPI 2484 +0.62%
$IDX 6899 +0.5%

Australia ↗️
$ASX 7494 +0.35%

India ↘️🐻
$BSE 59085 -1.85%
Europe trading ↗️ but tight

$DAX 15147 +0.1%
$FTSE 7770 +0.1%
$CAC 7171 +0.05%
$AEX 750 +0.3%
$IBEX 9039 +0.05%
$MIB 26246 +0.1%
$SMI 11329 +0.1%
$MOEX 2177 +0.45%

$VSTOXX 17.89

$DAX range = 14812 - 15580 ♉️
Read 11 tweets
Jan 15
🐻♉️↗️↘️↔️⚠️🚩🔺🔻🧮 💰

Macro Review 🧵
01/15/2023

1/11

Core #CPI running at +3.1% SAAR confirmed #Goldilocks for Q422 and catalyzed a 🚀 in equities, metals, and hydrocarbons

#Core CPI - 3-month SAAR
Dec - 3.1%
Nov - 4.2%
Oct - 5.7%

Chart: #CoreCPI 5.7% 🔻
1a/11

Despite all the recession talk - including my own, the @AtlantaFed #NowCast is projecting Q4 growth of +4.1%, an acceleration.

Growth 🔺 + Inflation 🔻 = #Quad1 #Goldilocks

Chart:
2/11

While #Quad1 #Goldilocks may be good for risk assets, it’s decidedly poor for the $USD, which continued ↘️ and took out the 50% retracement level of 102.12

Chart: $USD -1.64% (w) -9.94% 3M = T = Trend
Read 21 tweets
Jan 13
Hello Friday and the week to date!

$GOLD +1.55%
$GBP +1.08%
$USD -1.59%

$TLT +2.35%
$HYG +1.47%
$TNX -3.36%

$IWM +4.65%
$DAX +4.31%
$SSEC +1.26%
$NIKK +0.56%

#Bitcoin +11.26%
$COPPER +7.42%
$WTIC +6.26%
$NATGAS -0.54%
$SILVER +0.08%

Let's dig into the market 🧮!
Asia closed ↗️ ex-Japan

$NIKK 26119 -1.25%
$SSEC 3195 +1.0%
$TWII 14824 +0.65%
$HSI 21739 +1.05%
$KOSPI 2386 +0.9%
$IDX 6642 +0.2%

Australia ↗️
$ASX 7328 +0.65%

India ↗️
$BSE 60276 +0.55%
Europe ↗️♉️

$DAX 15075 +0.1%
$FTSE 7840 +0.6%
$CAC 7009 +0.5%
$AEX 748 +0.8%
$IBEX 8910 +0.95%
$MIB 25831 +0.4%
$SMI 11327 +0.35%
$MOEX 2186 unch

$VSTOXX 17.49 🔻⬅️

$DAX range = 14237 - 15240 ♉️
Read 11 tweets
Jan 6
Hello Friday and the week to date

$USD +1.51%
$GOLD +0.82%
$GBP -1.49%

$TLT +3.74%
$HYG +1.14%
$TNX -1.52%

$DAX +3.68%
$SSEC +2.23%
$NIKK -0.46%
$SPX -0.81%

#Bitcoin +1.37%
$COPPER +0.26%
$SILVER -2.58%
$WTIC -8.22%
$NATGAS -16.78%

Let's dig into the market 🧮!
#ADP private payrolls rose to +230,000 in December.

The initial response in the bond market was to push both the short and long end higher

Realizing job strength = FOMC higher for longer = eventual recession, the long end recovered with the big lower high in $TNX intact.
Asia finished the week mostly ↗️

$NIKK 25974 +0.6%
$SSEC 3158 +0.1%
$TWII 14373 +0.5%
$HSI 20992 -0.3% ⬅️
$KOSPI 2290 +1.1%
$IDX 6685 +0.45%

Australia ↗️
$ASX 7110 +0.65%

India ↘️
$BSE 59900 -0.75%
Read 12 tweets

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