Read on the Trading Floor - 23 May 2024
Today’s focus… Nvidia, July 4th and where have all the cuts gone?
Macro Themes At Play
Theme 1 - There's Nvidia and then there is the rest
Theme 2 - July 4th
Theme 3 - ECB
Further reading and listening of note
Theme 1 - There's Nvidia and then there is the rest
The train keeps on rolling as stocks soar on the back of another strong earning print from Nvidia. Beats and stock splits have dominated the pieces read on our platform today, the good times for the AI trade haven't ended just yet.
Stock Market Nerd - Nvidia (NVDA) Earnings Review
FT - Wall Street stocks hit record high as Nvidia market cap powers past $2.5tn
Steno Research - SOMETHING FOR YOUR ESPRESSO: ARE WE SUDDENLY USING AI AS AN EXCUSE FOR EVERYTHING?
Nvidia - Nvidia's astonishing profitability
Theme 2 - July 4th
Did Sunak prefer a summer, job hunting in California rather than fighting on until an inevitable Autumn defeat?
Paraphrasing Rory Stewart from today's Rest is Politics - "he would be mad to call an election now cause there is no way of winning"
Rest is Politics - SUNAK CALLS GENERAL ELECTION
Sunak is hoping the concept of "Flights to Rwanda" sells to the Cons base, immigration is front and center of his campaign.
Bloomberg - Inside Sunak’s Hail-Mary Plan to Narrow Poll Gap With Labour
FT - Sunak’s flagship smoking ban dropped ahead of UK election
For markets, given the width of the polls (in Labours favour) and the fiscal plans of both parties being so "aligned" there's not a lot to trade. What does it matter if there is a 0.25%/0.5% change in GDP growth profile if Cons come back or Labour...?
Theme 3 - ECB
AI momentum maybe taking stocks higher, but fixed income traders betting on deep cutting cycles from BoE and ECB continue to feel the pain. A pop in leading indicators (Eurozone Composite PMI 52.3 vs exp 52), better than expected wage data in Europe (4.69 vs prior 4.45%) and of course Chinese growth bouncing from depressed Q4 levels becoming a tailwind for Europe. Cuts will come this summer but fewer can now be expected. Lagarde has pre-committed to June, but it is most certainly off the table for BoE. Sunak announcing a July 4th election as well as the hotter than expected CPI print (Core 3.9% vs exp 3.6%) has combined to push any cut deeper into H2. As is standard practice the BoE cancelled all public engagements by its board members until after the election.
am/FX - Pricing out the ECB
Econostream - ECB Wage Tracker: One-off Payments Behind Wage Growth in 1Q
ABN Amro - Eurozone PMIs suggest growth to continue during Q2
Bloomberg - UK Election Kills Chance of June Rate Cut, Ex-BOE Official Says
Bloomberg - Euro-Zone Wage Growth Picks Up in Inflation Warning to ECB
Bloomberg - BOE Cancels All Public Statements Until After July 4 Election
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Top Pieces
Discovered on Harkster.com
Bloomberg - Inter Milan Seized by Oaktree After Chinese Owner Defaults on Debt
Macro Voices - Dr. Anas Alhajji: Oil Market Outlook, Iran & Energy Geopolitics
Steno Research - EM Watch: Have Copper markets been hit by a bus full of tourists or by the Chinese economy?
SCMP - 13 of China’s biggest fiscal manoeuvres to boost economy since the pandemic years
Fortune - Venice’s ‘tourist tax’, labeled a ‘miserable failure,’ might not break even this year
MacroHive - G10 FX Weekly: Parity in EUR/CHF Next as Dip-Buying Performs
Coindesk - U.S. Bitcoin ETF Holdings Hit New High of More Than 850K Tokens
The NY Times - Will Big Donors Follow Haley Back to Trump?
WSJ - Washington's Pivot on Bank Rules Could Free Up Tens of Billions
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