泽西 Macro 解盘 - 2024 Week 6 （02/05-02/09）

 

An uneventual week:

1 now we are out of blackout windows, lots of Fed talks reinforcing J-Pow's  press conference and CBS 60 Minutes interview of "needing more data" before cutting rate and base case for March is no cut;

2 Super hot Jan NFP on Friday 2/2 (Dec 23 also revised up significantly) is the final nail on the coffin to eliminate March cut

3 Continued divergence in equity and fixed income market - equity carried by Mag AI zealousy, which bonds follow macro (hot economy - tight labor mkt + strong GDP growth rate)

4 An interesting observation: all three auctions (3Y on T 10Y on W and 30Y on Th) all went very well, but treasury market cannot hold on to the gains by the EOD. 

 

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Next week

1 Tuesday CPI (baseline .3% MoM and 3.7% YoY) for core

2 Thur Retail sales

3 Fri PPI (good predictor of PCE inflation measure, Fed's favorite)

4 Friday OPEX. Market makers short SPX downside put l but long NDX upside call. Unwinding of hedging (unwinding short ES but long NQ position) will put pressure on NDX relative to SPX. Same pricing pressure on name stocks, like big tech and AI theme stocks (NVDA and SMCI in particular).

Despite J-Pow's warning for delayed cut, mkt overall still making ATH daily, led by big tech growth names (NVDA is becoming 3rd large mkt cap firm). Can hot inflation number shatter soft landing dream and finally bring equity valuation down to earth and converge to bond?