🎈THE JULY CPI REPORT🎈

😬Inflation increased on a year-over-year basis for the first time in 13 months
🔥 But the details show it's probably a mirage
⛽ Energy prices picked up
⛵But services inflation ex-rent is still right around 3%
🏔This may not force more rate hikes https://t.co/HSx2oiW7N8twitter.com/i/web/status/1…
OK...some details:

The increase in headline inflation was mostly from energy prices picking up

Contributions to YOY CPI, per Bloomberg:

How debt ceiling drama could damage your portfolio

(even if we avoid the dreaded default)

⬇⬇⬇ So…we’re weeks away from the X date, or when the government runs out of money to pay its bills and can’t borrow more $

It could be as soon as June 1😬

axios.com/2023/05/15/yel…

The S&P 500 has risen a year after the last Fed hike in 6 out of the last 9 hiking cycles

What's the common trend when stocks fall after a hiking cycle? ⬇ An economic recession or a market crisis.

Let's start with May 1981.

The Fed stopped hiking, but then immediately had to cut less than a month later because the economy crumbled under the pressure of high rates.

It was the Volcker era of high inflation.

Just finished paying back my student loans 🎉🎉🎉

(no, this is not a cruel April Fools' joke) I went to UNC on a mix of scholarships, grants and Stafford loans.

Had about $13K in debt at graduation at a 3% interest rate.

Just paid over time and balloon paid the rest today bc the loan's servicer was changing (and I had a little bit left)

In this environment, there are two types of bears (in my mind):

😬 Cautious bears (prices look high, but low in stocks may be in)

😱 Doomsday bears (prices look high AND stocks could make new lows) I'd consider us in the 😬cautious bears😬 camp.

Hopeful the Fed can pull this off without a recession (and so far they are!), but skeptical of the type of rally we've seen YTD.

Love waking up to a thread on why SSRIs are just a big pharma scam.

I've been on meds for 6 years now and trust me, no amount of sunshine, money or sleep could've helped me and TBH I can't tell you how much it sucks to hear ppl say it's a lifestyle thing. the stigma is horrible

So I'll balance it out.

I've had clinical anxiety/depression for most of my life, and it got so bad in adulthood that I had to seek treatment

😬DECEMBER RETAIL SALES😬

😬First back-to-back monthly declines of 1% or more since the pandemic began (and before that, 2008 and 2001)

😓Declines in sales for most items

⛽ BUT food, gas, autos and other items are making these numbers seem scarier than they actually are Yes, retail sales *in general* seem ominous.

Check this chart out, though:

It's the monthly change in the retail sales control group, the less volatile basket of core retail sales that feeds directly into GDP calculations

Not great, but not so ominous

Oh wow

Last week was the fifth-biggest week of options volume in history, according to Bloomberg data

227 million contracts traded, NBD 👀 There wasn't a huge surge in volume on any single day (even though Thursday — CPI day — was the highest volume of the week)

Rather, Wednesday-Friday options volume was consistently high, clocking at around ~45-50m contracts per day

The equity put-call ratio of spiked to a record high yesterday

...and there's a rly interesting reason why ⬇ First of all, the equity put-call ratio is the ratio of call volume on single stocks and ETFs/put volume on single stocks and ETFs

It doesn't measure buying and selling, but *trading*

JUMPMAN JUMPMAN JUMPMAN

DEM HEELS UP TO SOMETHIN 😤 🐏 #goheels (if u don’t understand why Jumpman and the Tar Heels are related then sorry we can’t be friends)

Three market stats that could define 2023 (with a few thoughts on each of em from yours truly)

⬇⬇⬇⬇⬇⬇⬇ 1️⃣ In the 11 recessions since 1950, the S&P 500 has peaked an average of six months before a recession has started, and it’s bottomed an average of three months before a recession has ended

Even though 99% of headlines probably don't matter for your portfolio, here's how this latest headline could impart DOOM on the financial system & the world as we know it

A THREAD 👇👇👇 Folks, you've probably seen lots of these threads lately.

I have.

They're just financial fan-fiction engineered for clicks.

Fam, I am thankful for all of you.

So in return, I'm giving u all a lil turkey day present.

FIVE STOCK MARKET FACTS YOU CAN USE TO IMPRESS YOUR FAM AT THANKSGIVING DINNER ⬇ 🦃 So...I have this weird hobby

I like to study how markets have moved throughout history.

(in a way, I study market history for a living too)

Oh my god.

Last week was the biggest for equity/index options volume in history, eclipsing the last week of Jan 2021 (the meme stock explosion) as the new record holder.

Thursday + Friday were the 4th and 5th biggest options volume days in history, too. ~244 million options changed hands (131 mil calls, 113 mil puts)

(BBG data of total equity and index options traded on OPRA exchanges)

The S&P 500 jumped 5% today, a daily gain so big it’s happened about once every three years since 1950.

On an inflation report.

What happened? Let’s talk about it ⬇ So. October CPI data was released this morning, and it showed prices are still growing at a 7%+ annual clip.

OK…? That’s not good news, is it?

Why the market's classic fear index — the $VIX — isn't acting very afraid right now👻⬇ Right now, Wall Street is OBSESSED with the VIX.

Why? Because we might've just seen the market bottom, but *gasp* the VIX hasn't spiked yet(!!!)

Can't stop thinking about the #ElizaFletcher abduction.

Absolutely horrible. I've been a consistent runner for 8-9 years and I've been hollered at, touched, and followed by people in cars and on foot (two times but still).

It's unsettling every time it happens, but to think it could become the worst-case scenario is really tough to stomach.

The largest generation alive is finally getting a foothold in the labor market AND getting an outsized amount of policy help after a decade+ of drawing the short straw.

The millennials are having a moment, folks.

https://twitter.com/irvingswisher/status/1565688066328633345

Many of them started investing in the early days of COVID.

+ some of the older ones bought homes with a mortgage rate lower than today’s 10-year yield(!!!)

WHY MARKETS DON'T CARE ABOUT YOUR RECESSION WORRIES ⬇ The way you interpret a market can depend on what *could be* instead of what *is*.

Often, markets anticipate headlines — like a disappointing earnings report or an encouraging jobs number — before they happen.

In the end, expectations can matter more than reality.

THE Q2 GDP REPORT 😰

⬇️ 2 straight quarters of declining GDP
☹️ Much slower consumer and business demand
🫣 Biggest drag from the lack of home buying since 2010 (excl Q2 2020)
🧊 The Fed wanted a chiller economy, and it looks like they got it Honestly, this was a super disappointing report.

Based on data leading up to this, I would've expected a much stronger contribution from consumer spending (and maybe from biz spending as well).

THE FED’S JULY DECISION

🏔 75 bps hike
🧊 Spending and production is slowing down
⚖️ The Fed sounds more balanced
🤔 But does ⬇️ spending = ⬇️ inflation?
✂️ And is it enough to stop the hikes?
🔨 Jobs may hold the answer .@DianeSwonk with a good point on @BloombergTV

"The Fed can't calibrate a recession" (ie it has less control if we do end up slipping into recession)