So as the twitter stream will demonstrate, we’ve been wrapped up in this NVDA short as of late. We summarize where we are at, and go over thoughts on Inflation and this bull run in Equities …
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:
Tuesday: 8:30 AM EST – Core Inflation Rate and Inflation Rate / CPI No. – Core Expected at 0.3 MoM, came in at 0.4% MoM w/ 3.8% YoY, 0.1% over Consensus
Thursday: 8:30 AM EST – PPI and Retail Sales
Friday: 10:00 AM EST – Michigan Consumer Sentiment
SOFR Yield Curve: As previously discussed, on the Macro front; we are focusing on Inflation data in aggregate for the remainder of this month, March and April. At the moment, SOFR Yields are slightly under Fed projections for December of 2024; but only slightly. And the December of 2026 yields are right in line with the Fed Dot-Plot. From this area we will look to see where the data pulls us; but that was a sticky number on Inflation this week; pulling us ever so slightly towards our stated thesis.
Treasury Yield Curve: The yield curve is inverted. As it has been. For some time.
… as with STIRs, we are evaluating interest rates with future inflation data releases over the next month or two. With an ‘ear’ to any signs of continued structural and sticky inflation according to a background thesis. It is of note that the Treasury Curve really has not moved beyond it’s highs or lows for the last 3 months. The 4 Week Bill Yield is 5.3798%. The 52 Week Bill yield is now at 5.027%..
Overall Risk: (Stock Indices, Gold, Long Bond, Bills): Overall Risk, we remain neutral, in a general, broad, overall bias last week.
Equity Volatility: (VIX) We are at 13.90 and +0.06 at the moment on the day. We have volatility that I would rank as cool …
Equity Volatility VIX TERM STRUCTURE: Normal risk and premium conditions as the market is in contango throughout the terms.
Equities: (SPY, SPX or possibly the /ES) We remain bullish on Equities.
S&P 500 High Yield: (SPHD) We switched last week to bullish 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 TLT we remain neutral on price, neutral 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 switched last week to bullish.
High-Yield: (HYG, JNK) We remain neutral on price, neutral on yield.
Commodities: (GSCI, DBC or GSG) We remain bullish on Commodity Prices as a whole index.
Commodities: (GSCI, DBC or GSG) We switched over to bullish last week on Commodity Prices as a whole index.
Crude Oil Term Structure: The entire forward curve out to 2027 is in backwardation.
Crude Oil Specifically: (USO, USL and /CL) We remain bullish on Oil Prices. If we don’t break $76 soon, we’ll have to turn neutral.
Gasoline Specifically: (UGA and /RB) We remain bullish on Gasoline Prices.
Gold and Silver Specifically: (GLD / /GC and SLV /SI) We remain bullish on Gold prices. We had switched last week to bullish on Silver.
Currency: ($DXY:IFUS, UUP) We had switched last week to neutral on the US Dollar as an Index.
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