2024.11.19 Weekly
This will be a catch-up journal post.
I’m in some state today…
some pressure building from what is a perfectly natural path of US yields going higher and also more USD strength.
Can’t be stopped, and can’t be ignored for longer.
Data looked good …
Headline and Core in-line but Services is strong — Red in the lower half are hotter Services prints, and it’s kinda Red... Meanwhile a big pickup in vastly consumed Medical and Transportation Services over the last few months driving Services ex energy services to a 4 month continuous acceleration.
Sharp rebound in 3-mo ann. Services inflation now near longer run 4.5%. Meanwhile fed funds lower band is 4.5%.
Let’s just hope Services chills a bit, I guess…
PPI in as expected but strong in the details and without seasonal adjustments — strongest monthly readings since July, Final demand for Services and Personal consumption services rounding up to 0.5% m/m.
Retail sales was odd for the market to digest a below expected m/m number, that came with huge upward revisions to the prior months, so that was actually a strong print. Big ticket items in motor vehicles and electronics seeing a big pick up.
NFIB Small Business Optimism Index 3yr Z-score turned momentously positive to +0.69 and strongest reading in years (very top left corner of the heat-map). Uncertainty still high but very positive on business outlook and sales expectations, and strong credit trends (“expect easier credit conditions” +3sd yoy move from -2.35 to 0.47 last 12 months).
so let’s see …
Inflation — strong...
Services less shelter +4.5% 3mo ann.
— pickup in heavier Medical and Transportation categories,
Shelter still strong,
PPI strong
particularly core measures, huge rebound…
and wait, Retail sales was actually really strong?
and NFIB small businesses are high as f??
Yeah. Ok. Got it. <thumbs-up>
<sell everything>
I’m short, and long Dollars
Trailing NDX shorts avg. 20880 — we’ve had the initial euphoria — red wave — tax cuts — rally, now focus shifts from tax cuts to tax hikes and negatives of Trumponomics is being ‘assessed’, I don’t see any more narratives to drive P/E expansion any further from here, and vulnerable to sell-offs the risks of which the market is underappreciating.
On USD — I wrote “no reason to give up on the long USD trade and maybe not even for a few years…” and its just going to be as easy as that for as my position trading bias. USD is at a level where it starts to get very interesting if it strengthens more and I suppose more selling pressure in the 10yr makes things a little edgier and why not if the economy is in such great shape.
gl, i’m chillin (and so should the Fed, take a holiday “’wink)
