泽西 Macro 解盘 - 2024 Week 5 （01/29-02/02）

 

 

 

Very eventful weeks:

1 Monday 3 PM initial QRA figure of $202B is a relief for stock and bond market, and dollar sold off a bit relative to other currencies and gold because of it (net new borrowing not as big as expected);

2 Tuesday JOLTs number on the hot side and market reaction is mild; 

3 Weds 0830 QRE composition turned out to be not a big deal. Treasury increased issuance mostly on the belly of yield curve (more on this later);

4 Weds NYCB issue more isolated. SOFR initally rallied (lower rate) but reversed later in the day, especially after FOMC;

4 Weds 0200 FOMC statement was hawish and J-Pow was more HAWKISH. March rate cut is ruled out; equity and bond both sold off a bit, and dollar rallied. 

5 Thurday claim number on the cold side confirming Weds ADP; 

6 META and AMZN reported great ER in the after hours, and AAPL more or less in-line;

7 FRIDAY Jan NFP HUGELY hot, and even Dec ones were revised UP. March cut is out; May prob out as well. Bond sold off and stayed low throught the day, yet equity brushed it off after 0930 AM regular hour openning and only gave back 20 points in the last hour.

============ Next week ================

Not a heavy calendar.

1 Lots of Fed talk (blackout window is over), and likely pushed back rate cutting even further. J-Pow himself will be on CBS 60 minutes on Sunday evening (02/04). Interview was recorded on Thur and he likely had advanced knowledge of NFP at the time of recording.

2 Treasury supplies start to hit the market. 10Y on Weds and 30Y on Thur are especially important.

Comments:

1 Bond finally gave back some gains and the rally towards the EOM and beginning of Feb likely due to:

a mini-banking panic (NYCB) / b Month end portfolio reblancing by pension funds. 

Next week will be a real test due to supplies.

2 Equity valuation starts to feel stretched and the ruthless rally on Thur and Fri (riding on Big Tech's tail) felt like short squeeze and gamma squeeze. Feb tends to be a weak month (2nd weakest in the year) and the 2nd half of Feb post Op-Ex tends to be especially weak. Now new year in-flow is drying up and big tech earning season (almost) over (only NVDA left in Mag7). Let us see how equity can hold up.

Caveat: Not investment or trading advice. 

Just my 2c