a 🧵🪡

1/

Update on our upgrade of Regional Banks "tactical buy" which we initiated on 5/7

- rationale on 5/7 was failure of $FRC created "temporary Fed put" for regional banks

- #Fed then paused

$KRE $NYCB $EWBC $WAL $BANC $CNOB
2/

Technical picture for $KRE regional banks has since strengthened sharply

- Regional banks registered "13" buy setup on @DeMarkAnalytics daily and weekly charts

- flagged by @MarkNewtonCMT

- and yesterday, we got the necessary "price flip" higher on $KRE Image
3/

As you can see, the Regional Bank "temporary Fed put" trade is outperforming the broader market

- summary of trade ideas is below Image
4/

Read as regional bank tactical rally now has "technical support"

That's it.

- keep up with our tactical ideas by getting "First Word"

For more details, get the "First Word" at FSinsight.com/our-services

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More from @fundstrat

May 12
A short 🧵🪡
1/

On why this plunge in #FINRA margin debt matters more you one realizes
👇

- margin debt tanked -35% off peak and -$330 billion
- greater than GFC peak to trough
- and 1.59% (% market cap) lowest since dot-com low
2/

2023 equity market has been a game of “inches” but bullish case has gained #anygivensunday

- this week’s soft side inflation readings strengthened case for #Fed pause

- and a “pause” reduces risk of a hard landing

So that’s a good thing

3/

At some point, some “tie breaker” data will emerge:

- either “soft” or “hard” landing

Here is the thing, investor positioning clearly “hard” landing as #FINRA margin shows

- if our base case of “soft” landing plays out
- expect a #stampede into equities

Positioning 🤔
Read 4 tweets
Apr 26
A short 🧵🪡
1/7

Equity markets remain on a ‘hair trigger’ and today’s wobble probably due to $FRC and regional bank model concerns

👀 on #Fed FOMC 5/3-5/4

- we still expect a ‘dovish’ +25bp
- regional softness one factor
- other is lots of disinflation in pipeline
2/7

Case-Shiller showed upside surprise on price (MoM) but arguably as important is home prices went to ZERO YoY

- zero price inflation on homes
- @Redfin rent yoy negative
- Yet, #CPI showing 8.6% yoy gains for housing

CPI lagging real-time measures = disinflation in pipeline Image
Read 9 tweets
Jan 9
🧵

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
Read 6 tweets
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

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