Week ahead : U.S, Japan, Australia and China CPI, banks kick off earnings season and Central bank speakers coming out of their Christmas holidays in force!
Start of 2024, classic partial unwind of what FOMO'ed in late 2023, UST's lower, leading techs/QQQ lower and USD firmer, positioning still is very much short USDollars, Short bonds and long risk, beware stronger data, higher headline inflation, like this morning in CH
Swiss CPI 1.7%, vs 1.5% expected, not good for markets if this is a sign elsewhere >>> ''a return of inflation'', meaning it doesn't go as low as many think and thus the 6 prices cuts from FED already priced by markets are misplaced and March is too early (relative to current data), June more likely
U.S : Congressional leaders reach $1.59 trillion deal on top-line spending, pave the way for deal to fund the government>>> cutting the budget of the only department they needed to raise ! taxes .. election year!
JP Morgan warn on 'boiling frog' US$34 trillion debt - could easily become unsustainable
Goods prices have been a big disinflationary pressure over the last year which has brought aggregate inflation figures down substantially, this is beginning to reverse over the last 2-3 weeks with freight up anywhere between 50 to 100% depending on the route
U.S NPP headline slightly stronger, with 71K down revisions on previous months
Fed's Logan : "“So, given the rapid decline of the ON RRP, I think it’s appropriate to consider the parameters that will guide a decision to slow the runoff of our assets. In my view, we should slow the pace of runoff as ON RRP balances approach a low level.”
ISM services activity drops sharply in December, with employment at lowest since 2020
It's only week 2, long way to go, and it was ''all overbought, Dec FOMO etc'' but there you are : 2024 just experienced its worst cross-asset sell-off to start a year since at least 2003
Dear contrarians.... Long "Magnificent 7" and short Chinese shares are the two most overcrowded trades in the market right now''
IPhone sales in China to fall double digits, Jefferies Says
Musk’s drug use concerns Tesla, SpaceX Leaders, WSJ Says
China sanctions 5 US defense companies in response to US sanctions and arms sales to Taiwan >> tit for tat !
Markets :
APPL 200dma is right around here $181 - it matters, either way. Wedbush think AAPL can be a $4trn market cap! >>> has AAPL become a China tech proxy ?
UST 10's 4.05% again (4.10 or so highs Friday post NFP, 3.95 after ISM)
USdollar ticking higher, risk of further short-covering, UST's always the first tell !
SPX500 4'650 key level to hold for the bulls, it's all pretty systematic, so watch AAPL and SPX500, QQQ and in particular bonds, U.S CPI key !
Middle East crisis live: Blinken to meet Saudi crown prince as he warns Palestinians ‘must not be pressed to leave Gaza’ (theguardian.com)
Congressional leaders reach $1.59 trillion deal on top-line spending, pave the way for deal to fund the government (msn.com)
The $34 trillion mountain of national debt is a 'boiling frog' situation for the US economy, JPMorgan warns (msn.com)
Fed’s Logan backs first slowing, then gradually ending, balance-sheet runoff (msn.com) Fed always love raising hope of end of QT, it's an election year after all, but what about inflation risk reappearing-not going down further as quick as priced in?
China sanctions US defence firms over Taiwan sales (msn.com) The firms are BAE Systems Land and Armament, Alliant Techsystems, AeroVironment, Viasat and Data Link Solutions
The S&P 500 could crash by 30%, a recession is likely underway, and interest rates might not fall before summer, market prophet says (msn.com)
No advocating it, but worth a read nonetheless, clearly, IMHO, the market has been too hasty looking for rates cuts, too much priced in, but we shall see, recession or not etc, goodinflation/prices back up etcetc..
Michael Pettis on X: "1/8 Important Bloomberg article on worsening global trade constraints. It is becoming more and more likely that world moves towards a manufacturing over-production crisis. Given the current structure of its economy, China effectively... https://t.co/ythyy5zaKi via @economics" / X (twitter.com)
AUDUSD - other USD charts fairly similar, USDJPY as discussed last week, USDCHF trying, EURFUSD topped, anything sub 1.0850 and more troubles for EURUSD long etc
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