Read on the Trading Floor - 13 June 2024
Today’s focus… Hard not to be looking forward to the US Open and/or the Euro's
Macro Themes At Play
Theme 1 - Data more important than the Dots?
Theme 2 - The most hated rally?
What's being read on Harkster.com
Theme 1 - Data more important than the Dots?
The answer depends which asset class you ask but softer CPI, PPI, Initial Claims has taken any sting out of the tale of the "hawkish 2024 dot"....
Stocks just go up (for now at least) led by Nvidia power train.
10s are still around 4.30% but 2s have rallied back to 4.72% as the weakening data keeps cuts alive despite the election reducing the probability.
USD... EM or DM, funder or high beta... It's a mixed bag post the wave of softer data today... PPI -0.2% vs exp +0.1%, Initial Claims 242k (exp 225k), the highest since August...
Is it all bad news? Did anyone really expect two cuts this year? The Fed left us data dependent, and the data is softening slowly... They may not cut before the election, but the delta was low that they would, given the political sensitivities surrounding such an event. If the US muddles through the rest of the year and the disinflationary trend restarts.... Isn't that a good environment for carry over the summer?
Steno Research - MACRO REGIME INDICATOR: UP, UP, UP STILL!
Steno Research - QUANT SIGNALS: USDMXN
ING - Soft US PPI and rising jobless claims keeps rate cuts on track
USDCHF vs US2s.
Sources: Tradingeconomics.com
Theme 2 - The most hated rally?
The higher we go, the worst it becomes... Everyone remembers when Tesla had a bigger mkt cap then the next 10 car manufacturers combined. It's inevitable that at some point Nvidia hits a boundary, whether it is power, customers build their own chips or AI overexuberance is curtailed. However, it's also very tough to fight the tape, hindsight is wonderful.... Bears are reluctant to call a top, it doesn't pay in the long run to be short the index.
Coldwater Economics - The US Market Overvaluation Problem
The Blind Squirrel Macro Pod - It 'AI'-n't Necessarily So!
Brent Donnelly am/FX - America, Heck Yea
The Market Mosaic - Can cooling inflation drive the S&P 500 higher?
Adam Mancini - My Multi-Week Upside Target Has Hit In SPX. Now What?
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What's being read on Harkster.com
Reuters - Roaring Kitty's predictions for GameStop are mostly unfulfilled
St Louis Fed - Where is business booming in the US?
Kyla Scanlon - Why We Have a Housing Crisis
Compounding Quality - 10 Stocks Beating Warren Buffett
FT - Starmer sets out £8.6bn of tax rises at Labour manifesto launch
Oxford Economics - What Trump 2.0 would mean for European growth
Fortune - Electric vehicles’ uphill battle gets steeper as rampant charger theft sours U.S. demand
American Economy Daily - The Real Story Behind Employment
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