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Feb 8, 20234 min read

Powell : fairly balanced, watch CPI & payrolls / Share Buybacks / Maersk / VIX stays low



  • Powell : all about payrolls and CPI, watch those two key data set. Inflation is beginning to ease, but it will be a long process, all about data. Mr Market will continue to price probabilities on a soft, hard or no landing..

  • Powell, paraphrased: Despite many people believing (or hoping) the Fed's recent inflation projections were too high because inflation would come down faster, the Fed didn't see it that way and, given last week's job report, still doesn't

  • Fed's Kashkari: - I wish we saw more evidence underlying inflation was trending down more. I am not lowering my rate path, it is still around 5.4%

  • The earthquake that struck Turkey and Syria is the deadliest global seismic event in more than a decade as the official death toll surpasses 9,000. Turkey's stock exchange suspends trading for the first time in 24 years

  • BP shares up nearly 7% yesterday >>> that "Back into Petroleum" is exactly what shareholders wanted then

  • "With fourth-quarter results from more than half of the S&P 500 companies already in, earnings per share have fallen 2.8% from a year earlier, according to data compiled by Bloomberg Intelligence. That’s less than the 3.3% drop expected before earnings season began." /BBG

  • Announced Stock buybacks more than tripled for January at $132B - a record - 15% higher than last January

  • Fitch revises up China's 2023 GDP growth forecast to 5%., joining other US invest houses in shifting growth forecasts higher #reopening

  • Germany, Denmark and the Netherlands announced Tuesday that they plan to provide Ukraine with at least 100 refurbished Leopard 1 battle tanks in the coming months, a pledge that comes as Kyiv anticipates a new Russian offensive around the anniversary of its invasion

  • Maersk, a global barometer for trade, posts record 2022 earnings but warns of a tough year ahead

  • India has raised interest-rates by 0.25% to 6.5%

 

Markets :

  • SPX500 trying to push though 4150 for 4300 by summer ) pain trade still higher ? see argument put below...Europe continues to hold firm(er), Asia working out the China reopening situation still, overall it's full steam ahead

  • USdollar had a brief rally for 30mins during Powell's presser, it is hard to rally beyond what's priced in already, unless market goes and price Terminal rate well above 5%..AUD right back neat 0.7000 levels after this week's hike, risk currencies, EMG (not all) overall in focus. USDJPY didn't manage to hold on to Sunday night's highs around 132.50, resistance still 131-132.50JPY area. BoJ nominees next week though!

  • GBPCHF - it it's going to hold its from around here - chart below

  • Crude rallies a little

  • GOLD trying to recover from Friday's NFP sell-off - following rates/usd

 


Is the pain trade still higher? JPM's cash trader Matt Reiner sums up trading sentiment: "...it feels like investors are “waiting for a pull back to buy” rather than “waiting on a rally to sell” and I think the logic is simple. Investors still are NOT long enough to feel comfortable laying off risk. In fact, the data continues to show investors are still markedly underperforming, and the gaps are widening – The two thematic baskets I’m watching closely are Momentum Short and PURE Beta Winners since they’ve been market leaders YTD and quality tends to follow – The VIX remains comfortably below 20 – The TICK has spent nearly all morning in the RED – We remain thoroughly elevated above the SPX Golden Cross – It feels like there are a lot of mixed signals out there, but the pain trade remains up."


NO not really, certainly not relative to what was priced in

all this hawkish & dovish stuff depends on what anyone wants to twist a few words to suit their own narrative, its all about pricing



Look beyond what those models are suppose to tell investors...

Let's be clear the FED sets policy for the next couple of meetings, always has, always will, particularly in fast moving economies, no matter what people want to hear on daily or weekly basis. Mr Market sets a policy, a view, a pricing, a curve for the next 18months..





Gautam Adani’s woes were in banks' plain sight | Reuters >>> Barclays, StanChart, Deutsche Bank and others helped Gautam Adani supersize his empire. A $110 bln share rout exposes their willingness to take a narrow view of risk on lucrative relationships. The questions will get louder








GBPCHF - if it is going to hold it will ahve to be from around here!













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