Aug 7, 20234 min read

AAPL vs AMZN / U.S crude reserves / EWZ / Fed speakers and U.S CPI up next

Week ahead : U.S CPI/PPI main event China CPI/PPI as well, 10y UST yields back to that key 4.10% level (slightly softer NFP headline), DXY chopping around/slight USD strength though, WTI near highs though, Equity markets struggle when AAPL struggles, will the magnificent 7's struggle form here ? (lots of short AAPL long AMXN or MSFT type calls following earnings, make sense, AAPL on a 32 PE and no growth was always going to be challenging!
Right now Mr Market is pricing in a FED that is done with hiking, on hold till Jan 2024 and a cut in March and another in May 2024
FED's : Bowman warned more rate hikes "will likely be needed," a contrast from other Fed officials advocating wait-and-see, is "looking for consistent evidence" that inflation continues to moderate, Bostic & Goolsbee said after Friday's slower job growth data that the labor market is becoming better balanced, so the FOMC can afford to be patient
Why net zero requires a reinvention of civilisation
Niger coup: Is France to blame for instability in West Africa?
Rice markets could face further turmoil as Thailand urges farmers to plant less rice
If you think inflation is over, and deflation is coming, remember that 100y Austria, good times, well now is time to buy, where do you think it's trading ?
Lula calls (insisting!) for end to U.S. dollars dominance in International trade
US oil reserves at lowest level since 1985, fastest decline in history over last 2 years, the US said they are delaying refilling reserves again due to “market conditions.”
Brazilian equities have been attracting unprecedented levels of foreign capital investments, marking a fundamental shift since the global financial crisis
JPM saw a recession 3 weeks ago, now they don't anymore..MS’s Mike Wilson blames persistent fiscal spending for why his stock call was wrong this year. “Fiscal policy has allowed the economy to grow faster than forecast, giving rise to the consensus view that the risk of a recession has faded considerably.”
China is adding more renewables each year than the EU, U.S and India combined
Netanyahu pulling back on judicial revamp. Record Number of Chinese LGFVs Miss Payments on Short-Term Debt - Bloomberg
The recent factory-building boom has contributed the most to US GDP growth since 1981, manufacturing construction mainly, spending has been part offset to Fed tightening
Warren Buffett found few bargains in the second quarter, Berkshire Hathaway's earnings show. The investor's company sold a net $8 billion of stock, and spent only $1.4 billion on buybacks. Berkshire's cash pile grew by 13% to a near-record $147 billion as a result

Markets :

SPX goes where AAPL goes and/or markets can't rally when APPL struggles, pretty clear >> been a HUGE momentum trade on low vols, watch out if systematic funds are 'forced' to unwind now, Vix, but more importantly ODTE stuff key! SHARP turnaround off highs, outside day on Friday
USD mixed, though if the unwind picks up pace, USDJPY will be in trouble, the fcat that the BoJ HAD or is intervening twice last week to mitigate the rising cost of debt, caused by a marginal shift in rates totally underestimate the enormity of the current debt situation! and all the majors are in a similar boat..
GOLD : while it's true that the $$ has not dropped and GOLD has not rallied either, you can easily take the opposite view ! most would have expected the sharp rise in UST yields to push the USDollar higher and XAU down, in reality none of it has happened, thus suggest a weak underlying $$ and XAU has actually done 'okay'
Bonds, duration, market is long duration and the BoJ is inviting JPN managers to bring capital back home