The Spuz (SPX or SPY) is making all-time highs in this third week of 2024.
There is some debate, around the cutting of interest rates, in 2024. Some feel there is a tug of war between wealth-flation and the desire for higher asset prices (Real Interest Rates being the sum of Nominal interest Rates – Inflation) in which the Fed will have an excuse to cut interest rates? And stated Fed expectations and the stickiness around Core Inflation.
I discuss that in my weekly musings, and the details of our weekly note is posted below …
You can find the video as below on YouTube, and is available in many other video venues (Vimeo, Odysee, etc)
Here is the the note itself, for this week on a 0 to 15 day Periodicity …
This Week on the Calendar:
Wednesday: 7:00 AM EST – Some Mortgage Data
Thursday: 8:30 AM EST – Durable Goods and GDP Data
Friday: 8:30 AM EST – Core PCE Price Data
SOFR Yield Curve: All the way out to the 2028’s, we have experienced higher yields in the last week, with a bit of a drop in yields on Friday. Now, it’s about seeing what the market does with that lowering of yields in the larger trend …
Treasury Yield Curve: The yield curve is inverted.
…. and as with STIRs, yields last week in Treasury rose as price fell. On Thursday and Friday, we got a bit of a rally in price. Now, let’s see what the market does with that price rally, in the larger downtrend. There is more room to run in a rally. But at the moment, that’s all we have. A price rally in a downtrend to higher yields, which I think may just continue for a little bit. The 4 Week Bill Yield is 5.3901%. The 52 Week Bill yield is now at 4.8641%
Overall Risk: (Stock Indices, Gold, Long Bond, Bills): Overall Risk, we remain bearish, in a general, broad, overall bias.
Equity Volatility: (VIX) We are at 13.49 and +0.18 at the moment on the day. We have volatility that I would rank as cool
Equity Volatility VIX TERM STRUCTURE: We’re in Contango through the VX terms, indicating normal risk conditions.
Equities: (SPY, SPX or possibly the /ES) We have switched to bullish on Equities last week.
S&P 500 High Yield: (SPHD) We have switched to neutral on S&P 500 High Yield price, bearish on yield.
Treasuries: (FRONT: SHY, MIDCURVE: IEI, IEF, BACKEND: TLT or the /ZT, /ZF, /ZN, /TN, /ZB and /UB). On SHY out to IEI, we remain bullish on price, bearish on yield. On IEF we remain neutral on price, neutral on yield. On TLT, we remain bearish on price, bullish on yield.
Emerging Markets: (PCY, VWO) On Emerging Market Debt prices (PCY), we remain neutral on price, neutral on yield. For Emerging Market Equity Prices (VWO), we remain neutral.
High-Yield: (HYG, JNK) We remain neutral on price, neutral on yield.
Commodities: (GSCI, DBC or GSG) We are switching over to neutral on Commodity Prices as a whole index.
Crude Oil Term Structure: Price is consolidating in the near term, and you can see Interest Rate Expectations RETURN to influencing clear on out the forward curve
Crude Oil Specifically: (USO, USL and /CL) We remain neutral on Oil Prices.
Gasoline Specifically: (UGA and /RB) We remain neutral on Gasoline Prices.
Gold and Silver Specifically: (GLD / /GC and SLV /SI) We remain neutral on Gold prices. We remain neutral on Silver.
Currency: ($DXY:IFUS, UUP) We remain neutral on the US Dollar as an Index.
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