Money manager, market strategist, director of research.
2 subscribers
May 14 • 30 tweets • 7 min read
We’re at a critical juncture in FED policy, and in line with the usual cadence of these junctures since late 2021, a significant gap has opened up between policy reality and the consensus view of FED policy.
Time for a FED 🧵. It’s been a while.
1/N
All posts referenced in this thread can be found in the bio link. It’s all free. Just my cross-asset market journal - easier to write for my process in blog form than it is on X.
2/N
Nov 21, 2023 • 8 tweets • 4 min read
The SPX Sector Report: November 21, 2023
Sector relative strength trends within the S&P 500, broken down into three groups: NDX, Cyclicals, Defensives.
Executive Summary
NDX Group. The bulk of the NDX group is running up against stiff overhead multi-year resistance, and with the dog piling into Tech running full steam ahead into the January/February blow-off top zone I am exercising caution in deploying fresh active share into this area. Software and cap weight Communication are the most interesting areas within the group that could be safely bought regardless of the outlook.
See video below from @jam_croissant on the blow-off top zone.
Nov 14, 2023 • 21 tweets • 4 min read
Time for a giga thread on the S&P 500 $SPX $SPY Outlook all the way out to May 15, 2026.
This thread will be spread over days/weeks. Tonight is part 1/N.
Discussion.
This time of year is obviously a time of reflection and zooming out. As I’ve mulled over the last two years and thought about the outlook from here, I continue to be amazed SPX is flat since the Fed pivoted hawkish in late 2021.
What makes the game of markets so fun is that you never know how a thesis is going to ultimately come together. Pieces of evidence come from all different sources, you process them, take some out, leave some in, bring some back. Then ‘poof’ a thesis emerges as if it… twitter.com/i/web/status/1…
Jun 20, 2023 • 6 tweets • 2 min read
Time to go away for awhile. I can't lay it out any more clearly than I did in this thread, so I'll pin this tweet with the subsections linked below and fade into the background (Thursday's TMC space will be the last activity for an extended period of time).
This long of an outlook piece would normally be reserved for Substack, but given the impetus for the thread was born on Twitter (see quoted tweet above), I’m constructing it here.
Jun 13, 2023 • 7 tweets • 3 min read
theweightoftheevidence.substack.com/p/the-market-b…
Excluding COVID, this is the 9th instance of the Conference Board LEI falling to at least -5% YoY since 1965. All prior instances have been associated with an NBER-defined recession.
May 8, 2023 • 26 tweets • 9 min read
I do not believe Jack's @JackFarley96 interview with Nick @NickTimiraos has received anywhere close to its due attention. Thread below on the key parts, but in short, three things:
1. Short of cutting rates, the Fed does not have the tools to deal with the "bank walk" that is… twitter.com/i/web/status/1…
Starting circa 14:06 of the YouTube video above.
1. Bank walk issue not resolved b/c we're in a high rate environment w/ a very inverted curve. "That's where you start to wonder how bad this is going to get."
2. Political pain points haven't been hit for non-FED solutions.
Mar 5, 2023 • 22 tweets • 5 min read
Here’s the math on why 50 should be the consensus base case for March and 600 is the destination.
1. If the Fed had the revised inflation data in hand they would have hiked 50 on Feb 1 to 475.
2. The re-acceleration of inflation would’ve warranted another 50 in March to 525.
“After seeing promising signs of progress, we cannot risk a revival of inflation. Policymakers must remain data dependent, so my view will depend on what the data say.”
Zooming out, seems like a broadening of the balance sheet conversation. If TQT is in train, this convo makes sense. Shrink the BS, but have targeted lending programs at the ready.
Jan 27, 2023 • 32 tweets • 8 min read
There will be blood on February 1.
Powell will re-tighten financial conditions by forcefully addressing rate cuts head-on.
At the November FOMC he referred to the “broader tightening project” as having three stages: 1) rapid hikes to get to neutral, 2) measured hikes to get to “sufficiently restrictive”, and 3) staying at the terminal rate for some time.
Jan 25, 2023 • 6 tweets • 2 min read
Grantham, the tactical bull. gmo.com/americas/resea…
SPX 3200 base case, assuming no recession.
Oct 24, 2022 • 13 tweets • 2 min read
Home Page
Key Threads
Oct 23, 2022 • 91 tweets • 23 min read
Global Market Comment: October 23, 2022
Inflation is more entrenched than consensus believes, and FED Chair Jerome Powell has the resolve to uproot it. Therefore, interest rates are poised to move far higher than consensus believes.
NTM targets:
FFR: 700
10s: 650
SPX: 2500
Table of Contents
Part 1. Inflation
Part 2. Powell’s Resolve
Part 3. Interest Rates
Part 4. S&P 500
Part 5. Exhibits
Oct 23, 2022 • 5 tweets • 2 min read
This sentiment will begin permeating the market, further building buying power ready to be unleashed on a FED pause.
Probably need at least a 600 terminal to break it.
I’ll have a full thread on this later, but at minute 28 Bullard eliminates Team Transitory from the playing field with his comment about lagged data and FED credibility.
My gut reaction to the @NickTimiraos soft pivot plant was that it was another Brainard plant. But I think @dampedspring is spot on here (per usual - he's phenomenal):
MARKET JOURNAL
The UK/BOE pension crisis since it broke out two weeks ago gave FED the opportunity to prove its resolve in real time in the face of volatility, and harden the path of hikes. And as evidenced by BOE flip-flopping and the RBA’s dovish surprise, it’s clear that now
