Read on the Trading Floor - 26 Feb 2024
Today’s focus… Trading is a game of patience
Macro Themes At Play
Theme 1 - Searching for inspiration, signs of life in this market
Theme 2 - ESG and the tensions of implementing regulatory change
Further reading and listening of note
Theme 1 - Searching for inspiration, signs of life in this market
With nothing truly moving the needle, the mkt has spent a quiet Monday scanning the impending data calendar for triggers and potential risk events (more out of hope than anything else) that can knock us out of this status quo (cuts coming but not just yet, inflation "under control", wage gains, AI retooling etc etc). As a result, we're all sitting here enduring the churn, earning some dividends / carry and patiently waiting for a surprise (CRE meltdown, reinflation spike, geo tension uptick, tariff war, CNY deval) to rock the boat.
For now, CB's are confident they've done enough to restrict economies and the market are comfortable to ignore their unwillingness to commit to cuts as there is no need to worry, they'll cut by June. It may be too early to declare victory on inflation, but it's inevitable, especially in Europe, potentially in Canada and Japan, with only the US truly in question as growth, wage agreements and AI productivity gains are fueling US exceptionalism. Inflation and fixed income vol the key risk events this week outside of month AM/Corp rebalancing. It could be a long, dull and rangebound H1 before the market gets truly excited about the POTUS run off between Biden/Trump.
Macro Hive - Equities and the MacroSphere: Will PCE Break Equities Out of Recent Range?
Steno Signals #88 - Anyone left willing to bet on rate cuts in H1?
Steno Research - Macro Nugget: MAJOR tradeable gap opening between Germany and the US
Brent Donnelly - Corporate Month End Analysis
Theme 2 - ESG and the tensions of implementing regulatory change
From European farmers protesting in Brussels through the impact AI and Crypto will have on energy consumption, ESG reporting as well as the ecological impact the new technologies will have is one of the key longer-term trends feeding through Harkster.com. It may not be market moving today but as we've seen with Tesla, the unwind of tax credit support from governments for EV's, these trends can have longer term impact and be consistent headwinds or tailwinds depending on the political will of the time.
Axios - There's a power struggle brewing over crypto and AI — literally
Fortune - Germany’s latest ‘net zero’ plan involves storing carbon dioxide underground beneath the sea
The New York Times - Your Inhalers and EpiPens Aren't Very Healthy for the Environment
Bloomberg - BYD’s New $233,450 EV Supercar to Rival Ferrari, Lamborghini
FT - Ministers urge EU to increase subsidies as farmers protest in Brussels
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Top Pieces
Discovered on Harkster.com
Forward Guidance - Overheated Stock Market To Correct Before Continuing Rally | Le Shrub on AI, CRE, and China
Blind Squirrel Macro - Nah mate, I just need to outrun you!
Bloomberg - Cathie Wood Sells Into Nvidia Frenzy Again, Cuts TSMC Stake
The Lead-Lag Report by Michael A. Gayed - Remaining Risk-On
SCMP - Chinese investment bank joins chorus of experts as calls for fiscal stimulus intensify
Econostream Media - They Said It - Recent Comments of ECB Governing Council Members
ING - UK chancellor has limited space for tax cuts as market rates move higher
FT - Bonds are back
Bloomberg - Koch Network Will Stop Funding Haley In Blow to Her 2024 Bid
FT - Donald Trump scores big win in South Carolina Republican primary
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