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Apr 11, 20234 min read

S&P500 market up YTD, but.. & 4150 resistance / BTC 30K / NFP as exp., U.S CPI next focus




  • Joe Biden will visit Ireland on the Good Friday peace agreement anniversary, This week : after China's slightly softer CPI +0.7% (exp +1%), focus is on FED speakers tomorrow (Goolsbee, Harker and Kashkari), U.S CPI (Wed)

  • Federal Reserve Bank of St. Louis President James Bullard said a recent sharp drop in bond yields will ease headwinds for the US economy stemming from recent turmoil in the banking sector >>>> BofA sticks with their logic and sees the current set up playing out like the one we saw in the 70s/80s. The crowd is too bullish rate cuts and not bearish enough on the recession. Latest JOLTS data vs Fed Funds needs little commenting

  • Small businesses across the United States are experiencing a surge in bankruptcies, surpassing levels not seen since 2020. According to a UBS note reviewed by The Epoch Times, conditions could become worse as the knock-on effects from the recent banking crises begin to manifest

  • Tesla is building a new factory in Shanghai. The EV company will make its Megapack batteries at the new facility, deepening its investment in China despite trade tensions with the US

  • Credit Suisse collapse may put Singapore in the spotlight

  • NFP data las Friday was pretty much as expected 236K (exp 230K), but given ADP, market was probably looking for a lower print though, so despite rumblings, for now the labor markets remains robust >>> TS Lombard's Steve Blitz in his latest note basically argues that the Fed won't respond to weaker hiring: "March employment data add to the slowing momentum for hiring that the Fed has no intention of reversing. They are, instead, encouraging this slowdown and will get what they want in a few months – unemployment heading towards 4.5%". He still sees Fed funds at 3% by year end

  • What do you play at the start of a recession / Hartnett sums it up (below)

  • "S&P 500 market cap is up ...so far in 2023 but 92% of that rise has come from just 7 large cap stocks and AAPL has account for nearly one-quarter of it" --Citi >>> but that's what makes the market indices! nothing new, but still amazing

  • Hedge funds are reloading on bearish wagers on US equities to a decade high level of exposure, betting the latest market retreat will persist amid worsening economic data and corporate earnings. - Bloomberg/Thread

  • "Mr. Bankman-Fried called Alameda 'unauditable,' saying 'we sometimes find $50m of assets lying around that we lost track of; such is life.'"-WSJ

  • Hundreds of Former Feds have flocked to jobs in Big Tech

 
Markets :

  • Credit crunch (Spreads on BBB CMBS (commercial-mortgage-backed securities) have moved up to 977 bps, their widest level since March 2020) is often hear in economist's chatters these days and many looking for weaker earnings season (..bearish wagers in place..which maybe be the issue for the bears in short-term..!) >>> inflation remains TOO high and too sticky relative to FED's mandate though(we get U.S CPI on Wed)

  • BTC 30K, GOLD near all time highs, USD struggling, so many articles of 'various countries aiming to cut their independence from the $....over the long-term..''

  • The 3-Month TBills yield is 5.08%, highest level since March 2007, 12months ago it was at 0.70% and two years ago it was at 0.02% >>> Hedge funds moved to short Treasuries aggressively before Friday's non-farm payrolls data. It was the biggest bearish positioning shift since March of 2022

  • Crude WTI mid 80's after OPEC+ cut, Copper holding up well (chart below)

  • SPX500 4150/4200 box-top end of the range technically

 

Hartnett sums it up:

1. Long T-bills…cash outperforms until Fed cuts aggressively

2. Long yield curve steepeners…

3. Long gold…US dollar debasement

4. Short over-owned assets vulnerable to deleveraging/revenue cuts…IG/HY bonds, US tech, EU luxury, industrial/defense stocks, US private equity...(good luck shorting LVMH...)

4. And prepare shopping list…once labor market indicates recession begins, execute on buy list of distressed cyclicals in banks, REITs, small caps, commodities.




A world infested with social media messages from previous government officials ?...humm




Bank Failures. High Inflation. Rising Rates. Is the Resilient Jobs Market About to Crack? - WSJ >>> could be, though no real clear signs of slowing down, yet anyway







Must admit it's a lovely story, there is going to film about it sooner or later! Ryan Reynolds ‘troubled’ by how hooked he is on football after Wrexham win | Evening Standard








Copper steady/trending higher




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