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Writer's pictureStéphan
Jan 114 min read

Market consensus as we start '24 / Nikki Hailey / SPX500 testing Jan 2022 highs / U.S CPI key today



  • The current market consensus is for inflation heading towards the Fed's target of 2%, so definitely no more FED hikes, therefore we get a nice soft landing, with no recession/small one only maybe, which means the FED will cut soon and all will be well and good for the economy (all this should be put relative to what is priced in already - say 150bps of cuts starting in March >>> got ever so slightly pushed back last few days ahead of CPI this afternoon (NFP was stronger, ISM services weaker so OCO), before Covid - SPX500 was 3'250 - currently testing the 4'810 area highs of early January 2022

  • U.S primary : Nikki Haley has momentum

  • Fed's Williams (A list) said monetary policy is tight enough to nudge inflation down to the Fed’s 2% goal but policymakers need more evidence before they can “dial back” interest rates

  • The federal budget deficit totalled $509 billion in the first quarter of fiscal year 2024, the Congressional Budget Office estimates. That amount is $87 billion more than the deficit recorded during the same period last fiscal year: Although revenues this year were $83 billion (or 8 percent) higher, outlays rose more—by $170 billion (or 12 percent) >>> a 2trn annualized deficit in an economy at full employment....

  • The wealthiest 10% of U.S. households now own nearly 93% of the stock market/Axios >> it will continue as long as profits are privatized and losses are socialized!

  • Blinken: There will be consequences for continued attacks in the Red Sea

  • Maersk switches liner service from Panama Canal to land bridge

  • SEC approves first spot BTC ETF's

  • The U.N. Security Council on Wednesday demanded Yemen's Houthis immediately end attacks on ships in the Red Sea and cautioned against escalating tensions while implicitly endorsing a U.S.-led task force that has been defending vessels

  • Big tech is sliding down Glassdoor's ranking of top employers

  • FT - Largest U.S banks set to log sharp rise in bad loans, Citigroup at risk of quarterly loss after charges come in far higher than initially disclosed


 

Markets :

  • Eagerly awaiting U.S CPI, expectations nudged up from 0.2 to 0.3% lately, it's when it all looks rosy and bullish that you should consider a hedge #timeforahedgingstrategy

  • Bond auction this week also been pretty good, nothing much to worry about anything, same as above!

  • SPX500 testing those highs from very early 2021 around 4800+

  • USDollar mostly bid vs JPY only so far, other pairs pretty stable-nothing much to see here, the USD bulls wants to print sub 1.0850 EUR, sub 0.665 AUD, CAD 1.3450+ CNH 7.20+, CHF 0.8550+ to continue with USD higher (bonds and therefore risk key as usual)


 


The largest week of earnings is Jan. 29th through Feb 2nd, when 32% of the S&P 500 by weight will report (such as AAPL, AMZN, META, and GOOGL).

Exp are for SPX quarterly EPS to grow +4.3% y/y, driven by REITs, Utilities, Comm Services, and Info Tech. While SPX 2023e css estimates have remained largely unch since June at $221, css is exp +11% EPS growth in ’24 to $245. NDX estimates have continued to move higher after a beat & raise from many Mag-7 names last qtr (only TSLA missed on EPS), as well as Semis seeing EPS estimates increase in anticipation of positive inflection in pricing after a period of peak inventories.





OK it's done - finally

And don't forget What are ETFs? (qz.com) ETFs: Easy trade, easy short










It took 15+ years...




The media, including Blick, are making a big deal out of it. A 34-year-old prime minister, the youngest in the history of the Fifth Republic. But the French? Are you passionate about this appointment behind closed doors, very Parisian? Unsure.

Bet a few of those facts you didn't know !!?








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