Read on the Trading Floor - 14 Mar 2024
Today’s focus… US data, energy control, Tesla and much more
Macro Themes At Play
Theme 1 - Important data dump from the US
Theme 2 - The future of energy
Theme 3 - Fantastic Four
Further reading and listening of note
Theme 1 - Important data dump from the US
US fixed income weaker (2s @ 4.69% and 10s @ 4.29%) taking the USD stronger after another wave of hotter inflation prints, initial claims declining but retail sales disappointing. PPI rose 0.6% MoM in Feb, marking the largest increase since last August and easily surpassing the streets 0.3% expectations. Initial claims remain glued to 200k, showing no signs of deterioration in the labour market whilst consumer spending is still slowing. Retail sales ex Auto in the US were up 0.3% MoM, but didn't improve as much as expected following a prior 0.8% fall in January and they're below the market forecast of +0.5%. As a result, it’s hard to argue with the narrative that the Fed cut is “not far” but it’s also not quite as close as we once thought. If Jamie and Ken are right, it may still be further than the mkt hopes, potentially after the Nov election but for now though, the fixed income repricing has yet to be violent enough to materially impact VAR models or drive USD flows.
Source: Tradingeconomics.com
Theme 2 - The future of energy
As the world fawns over AI productivity gains and the record inflows into Bitcoin ETFs, are you willing to pay for higher gas and electricity bills to fund the technological advances? The Matrix maybe 25yrs old but it has certainly aged well.
The Telegraph - Rishi Sunak announces new gas power stations to ease risk of blackouts
Doomberg - Prime Time (As Amazon enters the nuclear chat, it’s time to get technical about uranium enrichment.)
Source: The Matrix (June 1999)
Theme 3 - Fantastic Four
The Mag 7 is splintering into the fantastic four, Tesla suffered another shock sell off as volume/sales growth outlook are expected to trend to 0. Wells Fargo’s Colin Langan via a Bloomberg report indicated "Tesla would have zero growth in sales volumes for the electric-vehicle maker this year and in 2025, it’ll be worse yet: volumes will drop."
Tesla - lower highs and lower lows over the past 9 months
Source Barchart.com
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