Durango Markets

Education/Tools for Trading all Markets. Forecasting, Strategies & Newsletters. Blockchain/Crypto, Tokenized Assets, DeFi and P2P. Not Financial Advice

[Lisa Abramowicz @lisaabramowicz1]

Collectively, the “magnificent 7” - Apple, Microsoft, Alphabet, Amazon, Nvidia, Tesla and Meta - have jumped 75% in 2023. These stocks now represent about 30% of the S&P 500’s market value, approaching the highest-ever share for any seven stocks. https://t.co/87dffo7fFt

[Lisa Abramowicz @lisaabramowicz1]

Since Dec. 15, four of the world’s five largest container-shipping companies have paused or suspended their services in the Red Sea due to Houthi attacks. About 12% of global trade normally flows through this particular route. https://t.co/GYkjtTF9oO

[Mohamed A. El-Erian @elerianm]

.#CentralBanks are again featured in the week ahead for the global #economy and #markets with the #BankOfJapan's policy meeting and the extent to which #FederalReserve speakers push back against the #markets' embrace of the "Powell Pivot."
Keep an eye also on data including #Germany's IFO, #UK CPI #inflation, and US PCE and consumer confidence.
#econtwitter

[Project Syndicate @ProSyn]

Contrary to many Western analysts’ expectations, the shift from a unipolar to a multipolar world economy will not lead to a China-led alternative order but to global instability, warns @elerianm. https://t.co/dB4h6sozYu

[Mohamed A. El-Erian @elerianm]

Well, that didn’t take long.
Once again, Fed officials seem forced to walk back public comments that moved markets in a major way.
It remains to be seen whether this will succeed given the extent to which Wednesday’s “Powell Pivot” has unleashed several market technicals.
#economy #markets #FederalReserve #EconTwitter

[Mohamed A. El-Erian @elerianm]

From the Bloomberg article on “Euro-Zone Slump Deepens With Recession Odds ‘Notably High’:”
“S&P Global’s purchasing managers’ index contracted for a seventh month in December, falling to 47. That defied economist expectations of a slight uptick — though they still predicted that the gauge would remain well below the 50 level that marks expansion. Readings for both manufacturing and services showed a slump.”
#economy #EconTwitter #europe

[Mohamed A. El-Erian @elerianm]

From the editorial in @TheEconomist on yesterday’s #FederalReserve policy announcement — or what is being called in markets “The Powell Christmas Pivot:”
“At the start of the month Jerome Powell, the Fed’s chairman, had said that it was premature to discuss the timing of rate cuts. Now he says loosening is under discussion for the first time since inflation surged after the covid-19 pandemic.”

#economy #markets #centralbanks #econtwitter

[Lisa Abramowicz @lisaabramowicz1]

US investment-grade bond yields have just had the biggest two-day drop since April 2020.

[Lisa Abramowicz @lisaabramowicz1]

The Fed essentially has revived the "transitory" idea without saying the much-maligned T-word. https://t.co/G0FJ0gT153

[Mohamed A. El-Erian @elerianm]

Re the #FederalReserve press conference:
These comments from #Fed Chair Powell represent quite an evolution from his remarks just 12 days ago — an evolution that has turbocharged the collapse in yields (including what is now a 29 basis point fall in the 2-year).
The dynamic is a familiar one: A more dovish than expected Fed move makes #markets insist on even more of a shift.
The cumulative drop in yields over the last few weeks is extraordinary in every way.
#economy

[Lisa Abramowicz @lisaabramowicz1]

Bonds rip on a dovish Fed statement.

[Lisa Abramowicz @lisaabramowicz1]

Traders are now pricing in 130bp of Fed rate cuts by the end of 2024.

[Lisa Abramowicz @lisaabramowicz1]

Instead of pushing back against the rosy nature of the market’s 2024 forecast, Powell embraced it. Based on the market’s reaction, he might as well have screamed, “We did it!” https://t.co/VuelDUPqQ6

[Mohamed A. El-Erian @elerianm]

Post #inflation data and going into tomorrow’s #FOMC announcements, markets are pricing in some 110 bps of Fed cuts in 2024.
While we should expect the #Fed’s dots to move in tomorrow’s SEP update, they are unlikely to meaningfully converge to the implied #markets’ view for 2024.
#economy

[Personal Finance @ftmoney]

Something peculiar is unfolding once again in the relationship between financial markets and the US Federal Reserve, says @elerianm https://t.co/uYKiz2vGts

[Lisa Abramowicz @lisaabramowicz1]

As investors envision a soft landing, the data isn't all that conclusive yet. As Inflation Insights' Omair Sharif said, "This report paired some serious deflation in core goods with strength in core services...I don't think this is a great number for Fed officials."

[Lisa Abramowicz @lisaabramowicz1]

“Right now it’s a Fed pivot party and we’re all invited.” https://t.co/pufEz6pssF

[steph pomboy @spomboy]

Lost in all the excitement about a pivot is the reality that 100bp or even 200bp cut in FED funds rate accomplishes nothing in terms of staving off the impending default cycle. Having 4% junk rated debt roll at 7.5% ( instead of 8.7%) isn't going to help. The FED would have to slash rates massively for it to make a difference.

[steph pomboy @spomboy]

2 quick points on CPI. (1) lest it were needed here is evidence that the # is total BS. and (2) imagine how much higher the upside 'surprise' would have been were this component rooted in reality?!

[CoinDesk @CoinDesk]

.@BlackRock's #bitcoinETF now invites participation from Wall Street banks.

@IanAllison123 reports

https://t.co/pTGyRB2dNH