Arizona Grievances

• Elected Republicans in Arizona rushed to do damage control after the state Supreme Court upheld a ban on almost all abortions from 1864, and some assured voters that they knew the 160-year-old ban was not appropriate for today. Democratic lawmakers in the state immediately tried to push through bills that would repeal the draconian ban, but that’s where the Republican resistance to the law ended.
  
• Republican leadership in the state Senate removed one bill from the day’s agenda on Wednesday, and in the state House, GOP leadership put the chamber into recess before any votes could be held. Profiles in courage! Democrats on the Senate floor (rightly) jeered their Republican colleagues as they filed out of the chamber. State House Speaker Ben Toma (R-AZ) told *Axios& he would not support repealing the 1864 statute. A New York Times-Siena College poll found in October that 59 percent of Arizonans believe abortion should mostly or always be legal.
  
• The Arizona decision has created a national firestorm, and Republicans are soiling themselves trying to figure out what to do. Disgraced former president Donald Trump, after months of obfuscating and refusing to stake out a clear position, said on Monday that he believes abortion restrictions should be left up to the states. We’re guessing he didn’t foresee the resurrection of a Civil War-era ban in one of those states the following day. Trump went so far as to say on Wednesday that he would not sign a federal abortion ban if one reached his desk should he be reelected in November, but as with everything the man says, who knows what he actually means.
  

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Enjoy

Dopey The Dumbfuck on Twitter: "I would like to remind juror number 6 that comments such as "talk to em" "let em know" and "speak on it" are not appropriate"

• Yesterday, Powell made a bit of a hawkish comment at the press conference when he said that a March rate cut is not probable. This comes despite starting it all off quite dovish saying that they are already confident in the data, and just want to see more of the same, rather than better.
• This sent markets lower into the close and dollar higher.
• A few things I want to note.

1. On the face of it, the comment is hawkish. Markets immediately repriced the chance of a Fed cut in March from 50% to 35%. This makes sense, don’t fight the Fed when Powell is telling you something explicitly.
2. However, a few things tell me that maybe the market won’t take this as hawkishly as maybe it should, and the dip could well get bought here.

• Firstly, look at the USD. The level it was trading at into the December FOMC meeting was 103.8. That’s why I keep talking about that as a resistance point. Markets tend to respect levels they were trading at before major events.
• If we see, despite Powell’s hawkishness yesterday, DXy, which was already trading close to 103.3, failed to break above 103.8. In fact today, following jobless claims, its down to 103.5. I think that without a big break above 103.8, it tells us that traders are not fully worried about a persistently hawkish fed, which will imply that equity sell offs won’t last long.
• Furthermore, look at bond yields. Despite USD jumping and equities selling off, bond yields fell, as positioning on TLT was quite bullish.
• IIf Fed was then to be very hawkish, you’d expect that to rise too.

• Finally, look at positioning into the morning.
• Risk reversal on dollar continues to point lower.
• Markets are pricing a drop in dollar still to come, not a potential move higher. Obviously Jobs data tomorrow needs to play ball, but markets aren’t worried.
  
• Skew pushed higher in SPX this morning even after the sell off yesterday. This comes as traders are selling OTM puts and buying OTM calls this morning.
  https://imgur.com/a/LkQgBWS
  yes, money flows have pulled back, this is a sign hedge funds may be taking profits, but look at the money flows on QQQ. They are on fire. Reaching new highs, this tells us hedge funds want to buy this dip again. They’re not taking money off the table here.
  
• IWM bit worse off, skew pointed lower quite sharply after Powell said no rate cuts, but thats because theyre more sensitive to yields. Money flows still point higher here, and looks like in premarket traders are buying back some of the OTM calls they sold yesterday.
  
• Some of this improvement in skew this morning may be the result of traders following price action, and alleviating some of their fears. But definitely, signs are there that this dip won’t be a big one.
  
• Markets are still pricing 6 rate cuts for 2024.
  

• Current spot is 4865.
• Low of yesterday was 4846. The fact that this was low of yesterday will make this a support today.
• The key level is the HVL of 4865. This is the level that separates positive and negative gamma. The faster we move above this the better. Below this level, market makers will be trying o stay delta hedged which will mean they long ups and sell downs. This means volatility below this level will be exacerbated.
• My quant says the high of the day expected to be 4881. We can see that before fed meeting we were trading t 4888. That confirms that this level will be a resistance fo the day.
• If somehow we go above this, 4900 will be a level to watch, but this is unlikely.
• On downside, my quant says low of the day expected to be 4809. This means reversal expected from here.
• 4800 will act as a support.

• Current price 419.76
• Low of da yesterday was 416.80
• This coincides with the gamma level at 417. That will offer some support today I think.
• Below that, we have the put support for QQQ at 415, which will defo offer some support. Will take a lot of volume to break that.
• My quant says the mininmum of day will be 412.58. This means reversal expected from here if we get there.
• Quant says high of day expected to be 421.37
• Call resistance still at 430.
• Notice: call resistance for SPX remained at 5000, and on QQQ remained at 430. This confirms traders didn’t pull back positioning as much as you might expect.

• AUSTRALIA BUILDING PERMITS:
• Declined by 9.5% MOM vs an expectation for an increase of 1.1%
• First time negative since September.
• Sign of slowing economic outlook there.
  
• CHINA CAIXIN MANUFACTURING PMI:
  
• Similar to what was released a couple of days ago, but this is from a private company’s data:
  
• Came out at 50.8, vs forecast of 50.6.
  
• Just about in expansion, more or less where its been for the last few months. No major surprise here.
  

• EURO INFLATION READING:
• Core inflation came 3.3% vs 3.2% expected. Down from 3.4%.
• So declined, but slower than expected.
• Headline inflation rate came out at 2.8%, vs expectation of 2.7%. Last month was 2.9%.
• So again, slightly slower decline than expected.
• This implies a slightly lower chance of Euro rate cut, but rate futures barely changed. Also risk reversal on EURUSD pointing lower, so no major effect on EUR.

• Voted to keep rates stable as expected. No surprise there. Everyone knew that would happen.
• Where there was some more scrutiny was with regards to how people voted.
• Last time, 6 voted to hold rates, 3 voted to hike.
• Here, we saw 6 vote to hold again, but this time, only 2 voted to hike. 1 actually voted to cut.
• So this means BOE members are getting less hawkish.
• More from the BOE statement:
• Will ensure bank rate restrictive for long enough to bring inflation back to 2% in medium term.
• Dropped language that “further tightening in monetary policy required if evidence of more inflation”. - dovish.
• Expects services CPI to rise slightly before falling later in Q2.
• Said CPI will reach target in Q2 2024, but said will rise back above 2% in Q3 2024, then fall back to 2% by 2026.
• Trimmed their expectations for wage growth to 4% YOY, vs 4.25% before.
• Said food prices will remain flat
• Despite this, uk money markets trim bets on BOE rate cuts slightly, now pricing 107 BPS in 2024, from 111 before BOE decision. More or less the same to be honest.
• More needs to be looked at with regards to Bailey press conference:
• Challenger job report says January hiring plans was lowest on record. Said January job cuts announced by US based employers, more than double December.
• Jobless claims confirmed a softening market. At 224k vs expectations of 212k. More jobless = weaker jobs market.
• Later, we have ISM PMI data for US

• DXY: trading at 103.6 before jobless numbers. Still been bouncing off the 103.8 resistance, which is the level dXY was trading at before December press conference. Since the market Is more sure of a rate cut by May than it was going into the FOMC meeting in December, this price of 103.8 will be a. Resistance.
• Dipped slightly after Jobless claims came soft.
• AUD headed lower. This is mostly a continuation of the move we started to see yesterday after the CPI came soft there which points to a more dovish RBA. This was made more by the fact that their building permit numbers showed a big MOM loss.
• EURO was lower, tested 1.078, but then recovered after the Euro CPI came down less than anticipated.
• GBP was lower, then jumped higher after BOE decision, despite a slight dovish tilt in the votes. This comes as BOE says that CPI will reach target in Q2 2024, but said will rise back above 2% in Q3 2024, only falling back to 2% by 2026.
• AUD moving toward 0.65
• EURUSD was at 1.078 then moved higher back above 1.08
• GBPUSD 1.266, after initially dropping to 1.262

• SPX:
• Before Powell spoke, was trading at 4888. That will create some resistance today then, and my quant confirms that as he draws the high of the day expected max at 4881.
• Closed yesterday at 4847, but pushed slightly higher in premarket to 4861.
• Nasdaq trading at 17231, is up around 0.4% from yesterday’s close at 17,130
• DJI trees more or less where it closed, at around 38,150. 38k will act as the support now for DJI.
• GER40 sold off yesterday with US markets, but is up 0.44% today, despite hotter Euro CPI.
• HKG50 up 0.3% today on China Finance VP saying they will do more supportive stimulus.
• Oil lower by 2.5% yesterday on rising dollar and fed not saying they will cut, which brings greater risk that US economy will come under pressure.

• TESLA - seeking to boost megabuck battery output and plan a new Nevada battery plant with CATL equipment.
• TSLA - Musk is moving on putting vote to shareholders to shift companies incorporation to Texas from Delaware, after judge voided his pay package.
• TSLA - Tesla China offer $1100 cash discount for select Model Y from February . This news is less substantial with the news above taking precedent.
• AMZN - up 1% ahead of earnings today.
• META flat ahead of earnings.

• NExtrracker up strongly on earnings. Massive beat on EPS by 100% and a raise to guidance.
• These earnings are dragging up other solar stocks.
• ALGN up on earnings after announcing upbeat Q1 revenue forecast. Company sees Q1 2024 revenue to be in the range of $960 mln - $980 mln, vs Wall Street estimates of $946.9 mln. Their q4 also beat.
• PLUG - completes first customer fill at Georgia green hydrogen plant. Mostly up on short squeeze after Roth MKM upgrade yesterday
• NSC up sharply after Ancora led group takes a $1b stake in bid to oust CEO. So big active investors investing
• CTVA up on earnigns, announced a $1b repurchase plan. Net sales came in at $3.71 billion, compared to estimates of $3.62 billion, as per LSEG data. They absolutely smashed EPS estimates too.
• This is dragging other agriculture stocks like AGCO higher.
• Ball up on earnings, despite citing beer brand disruption. Said there is some tepid demand. Will dig into this more as haven’t read full report
• PH up after raising Fiscal year outlook due to lift from aerospace demand. Said their guidance is now raised to 23.9-24.5, which is a raise by 6%. Very good.
• ATKR up on earnings. EPS and sales beat. Will read more.
• ETN higher after seeing full year estimates for profit above expectation, due to strong equipment demand for data centres. This stock is on an absolute tear as well.
• CHRW down after downgraded to sell due to financial struggles and market pressures. No good
• HON - pdown after earnings. Their Q4 revenue guidance of 38.1-38.9 missed esimtates of 39.02. EPS of 9.8-10.1 slightly short of 9.97 estimate.
• BDX down after Q1 revenue miss, even though they lifted their 2024 profit forecast on surgical devices strength.
• ALGM down on earnigns, after Q4 net sales guided to be 230-240m vs estimates of 250m. Miss by 8%
• EPS of 0.19-0.23 missed by 25%.
• Nio - January delivery update:
• 10,055 vehicles devoured in Jan 2024, up 18% YOY
• DIS - will be starting to crackdown on password sharing on Hulu. Revised terms of service to ban password sharing explicitly, outside of primary personal residence.
  
• DIS - yesterday, Disney’s lawsuit against Ron DeSantis was dismissed by federal judge.
  
• Deutsche BANK - will lay off thousands of employees to cut costs, and also announced a $1b stock buyback.
  
• RACE - Ferrari up 5% after earnings, net profits rise 33%, initiated a bullish 2024 outlook.
  

• Goldman Sachs expects US fed to begin rate cuts in May, instead of March.
• Wells Fargo says they expect May rate cut with total of 215 bps of cuts in 2024.
• China’s vice finance minister said that they will appropriately increase investment under the central government budget.
• Said fiscal policy would help to expand domestic demand.
• This is short term bullish for Chinese stocks, but extent of impact yet to be determined.
• OPEC will review whether to extend 2.2m BPD voluntary cuts, which are due to expire at ehe nd of Q1 2024.
• OPEC panel reiterates readiness to take additional measures.
• ECB’s Centeno:
• If inflation continues on same trajectory in coming months, next decision will be to cut and start cycle of normalisation of rates
• US cent com says Houthi missiles targeting ships and iranian UAVs have been destroyed.

• Yesterday, Powell made a bit of a hawkish comment at the press conference when he said that a March rate cut is not probable. This comes despite starting it all off quite dovish saying that they are already confident in the data, and just want to see more of the same, rather than better.
• This sent markets lower into the close and dollar higher.
• A few things I want to note.

1. On the face of it, the comment is hawkish. Markets immediately repriced the chance of a Fed cut in March from 50% to 35%. This makes sense, don’t fight the Fed when Powell is telling you something explicitly.
2. However, a few things tell me that maybe the market won’t take this as hawkishly as maybe it should, and the dip could well get bought here.

• Firstly, look at the USD. The level it was trading at into the December FOMC meeting was 103.8. That’s why I keep talking about that as a resistance point. Markets tend to respect levels they were trading at before major events.
• If we see, despite Powell’s hawkishness yesterday, DXy, which was already trading close to 103.3, failed to break above 103.8. In fact today, following jobless claims, its down to 103.5. I think that without a big break above 103.8, it tells us that traders are not fully worried about a persistently hawkish fed, which will imply that equity sell offs won’t last long.
• Furthermore, look at bond yields. Despite USD jumping and equities selling off, bond yields fell, as positioning on TLT was quite bullish.
• IIf Fed was then to be very hawkish, you’d expect that to rise too.

• Finally, look at positioning into the morning.
• Risk reversal on dollar continues to point lower.
• Markets are pricing a drop in dollar still to come, not a potential move higher. Obviously Jobs data tomorrow needs to play ball, but markets aren’t worried.
  
• Skew pushed higher in SPX this morning even after the sell off yesterday. This comes as traders are selling OTM puts and buying OTM calls this morning.
  https://imgur.com/a/LkQgBWS
  yes, money flows have pulled back, this is a sign hedge funds may be taking profits, but look at the money flows on QQQ. They are on fire. Reaching new highs, this tells us hedge funds want to buy this dip again. They’re not taking money off the table here.
  
• IWM bit worse off, skew pointed lower quite sharply after Powell said no rate cuts, but thats because theyre more sensitive to yields. Money flows still point higher here, and looks like in premarket traders are buying back some of the OTM calls they sold yesterday.
  
• Some of this improvement in skew this morning may be the result of traders following price action, and alleviating some of their fears. But definitely, signs are there that this dip won’t be a big one.
  
• Markets are still pricing 6 rate cuts for 2024.
  

• Current spot is 4865.
• Low of yesterday was 4846. The fact that this was low of yesterday will make this a support today.
• The key level is the HVL of 4865. This is the level that separates positive and negative gamma. The faster we move above this the better. Below this level, market makers will be trying o stay delta hedged which will mean they long ups and sell downs. This means volatility below this level will be exacerbated.
• My quant says the high of the day expected to be 4881. We can see that before fed meeting we were trading t 4888. That confirms that this level will be a resistance fo the day.
• If somehow we go above this, 4900 will be a level to watch, but this is unlikely.
• On downside, my quant says low of the day expected to be 4809. This means reversal expected from here.
• 4800 will act as a support.

• Current price 419.76
• Low of da yesterday was 416.80
• This coincides with the gamma level at 417. That will offer some support today I think.
• Below that, we have the put support for QQQ at 415, which will defo offer some support. Will take a lot of volume to break that.
• My quant says the mininmum of day will be 412.58. This means reversal expected from here if we get there.
• Quant says high of day expected to be 421.37
• Call resistance still at 430.
• Notice: call resistance for SPX remained at 5000, and on QQQ remained at 430. This confirms traders didn’t pull back positioning as much as you might expect.

• AUSTRALIA BUILDING PERMITS:
• Declined by 9.5% MOM vs an expectation for an increase of 1.1%
• First time negative since September.
• Sign of slowing economic outlook there.
  
• CHINA CAIXIN MANUFACTURING PMI:
  
• Similar to what was released a couple of days ago, but this is from a private company’s data:
  
• Came out at 50.8, vs forecast of 50.6.
  
• Just about in expansion, more or less where its been for the last few months. No major surprise here.
  

• EURO INFLATION READING:
• Core inflation came 3.3% vs 3.2% expected. Down from 3.4%.
• So declined, but slower than expected.
• Headline inflation rate came out at 2.8%, vs expectation of 2.7%. Last month was 2.9%.
• So again, slightly slower decline than expected.
• This implies a slightly lower chance of Euro rate cut, but rate futures barely changed. Also risk reversal on EURUSD pointing lower, so no major effect on EUR.

• Voted to keep rates stable as expected. No surprise there. Everyone knew that would happen.
• Where there was some more scrutiny was with regards to how people voted.
• Last time, 6 voted to hold rates, 3 voted to hike.
• Here, we saw 6 vote to hold again, but this time, only 2 voted to hike. 1 actually voted to cut.
• So this means BOE members are getting less hawkish.
• More from the BOE statement:
• Will ensure bank rate restrictive for long enough to bring inflation back to 2% in medium term.
• Dropped language that “further tightening in monetary policy required if evidence of more inflation”. - dovish.
• Expects services CPI to rise slightly before falling later in Q2.
• Said CPI will reach target in Q2 2024, but said will rise back above 2% in Q3 2024, then fall back to 2% by 2026.
• Trimmed their expectations for wage growth to 4% YOY, vs 4.25% before.
• Said food prices will remain flat
• Despite this, uk money markets trim bets on BOE rate cuts slightly, now pricing 107 BPS in 2024, from 111 before BOE decision. More or less the same to be honest.
• More needs to be looked at with regards to Bailey press conference:
• Challenger job report says January hiring plans was lowest on record. Said January job cuts announced by US based employers, more than double December.
• Jobless claims confirmed a softening market. At 224k vs expectations of 212k. More jobless = weaker jobs market.
• Later, we have ISM PMI data for US

• DXY: trading at 103.6 before jobless numbers. Still been bouncing off the 103.8 resistance, which is the level dXY was trading at before December press conference. Since the market Is more sure of a rate cut by May than it was going into the FOMC meeting in December, this price of 103.8 will be a. Resistance.
• Dipped slightly after Jobless claims came soft.
• AUD headed lower. This is mostly a continuation of the move we started to see yesterday after the CPI came soft there which points to a more dovish RBA. This was made more by the fact that their building permit numbers showed a big MOM loss.
• EURO was lower, tested 1.078, but then recovered after the Euro CPI came down less than anticipated.
• GBP was lower, then jumped higher after BOE decision, despite a slight dovish tilt in the votes. This comes as BOE says that CPI will reach target in Q2 2024, but said will rise back above 2% in Q3 2024, only falling back to 2% by 2026.
• AUD moving toward 0.65
• EURUSD was at 1.078 then moved higher back above 1.08
• GBPUSD 1.266, after initially dropping to 1.262

• SPX:
• Before Powell spoke, was trading at 4888. That will create some resistance today then, and my quant confirms that as he draws the high of the day expected max at 4881.
• Closed yesterday at 4847, but pushed slightly higher in premarket to 4861.
• Nasdaq trading at 17231, is up around 0.4% from yesterday’s close at 17,130
• DJI trees more or less where it closed, at around 38,150. 38k will act as the support now for DJI.
• GER40 sold off yesterday with US markets, but is up 0.44% today, despite hotter Euro CPI.
• HKG50 up 0.3% today on China Finance VP saying they will do more supportive stimulus.
• Oil lower by 2.5% yesterday on rising dollar and fed not saying they will cut, which brings greater risk that US economy will come under pressure.

• TESLA - seeking to boost megabuck battery output and plan a new Nevada battery plant with CATL equipment.
• TSLA - Musk is moving on putting vote to shareholders to shift companies incorporation to Texas from Delaware, after judge voided his pay package.
• TSLA - Tesla China offer $1100 cash discount for select Model Y from February . This news is less substantial with the news above taking precedent.
• AMZN - up 1% ahead of earnings today.
• META flat ahead of earnings.

• NExtrracker up strongly on earnings. Massive beat on EPS by 100% and a raise to guidance.
• These earnings are dragging up other solar stocks.
• ALGN up on earnings after announcing upbeat Q1 revenue forecast. Company sees Q1 2024 revenue to be in the range of $960 mln - $980 mln, vs Wall Street estimates of $946.9 mln. Their q4 also beat.
• PLUG - completes first customer fill at Georgia green hydrogen plant. Mostly up on short squeeze after Roth MKM upgrade yesterday
• NSC up sharply after Ancora led group takes a $1b stake in bid to oust CEO. So big active investors investing
• CTVA up on earnigns, announced a $1b repurchase plan. Net sales came in at $3.71 billion, compared to estimates of $3.62 billion, as per LSEG data. They absolutely smashed EPS estimates too.
• This is dragging other agriculture stocks like AGCO higher.
• Ball up on earnings, despite citing beer brand disruption. Said there is some tepid demand. Will dig into this more as haven’t read full report
• PH up after raising Fiscal year outlook due to lift from aerospace demand. Said their guidance is now raised to 23.9-24.5, which is a raise by 6%. Very good.
• ATKR up on earnings. EPS and sales beat. Will read more.
• ETN higher after seeing full year estimates for profit above expectation, due to strong equipment demand for data centres. This stock is on an absolute tear as well.
• CHRW down after downgraded to sell due to financial struggles and market pressures. No good
• HON - pdown after earnings. Their Q4 revenue guidance of 38.1-38.9 missed esimtates of 39.02. EPS of 9.8-10.1 slightly short of 9.97 estimate.
• BDX down after Q1 revenue miss, even though they lifted their 2024 profit forecast on surgical devices strength.
• ALGM down on earnigns, after Q4 net sales guided to be 230-240m vs estimates of 250m. Miss by 8%
• EPS of 0.19-0.23 missed by 25%.
• Nio - January delivery update:
• 10,055 vehicles devoured in Jan 2024, up 18% YOY
• DIS - will be starting to crackdown on password sharing on Hulu. Revised terms of service to ban password sharing explicitly, outside of primary personal residence.
  
• DIS - yesterday, Disney’s lawsuit against Ron DeSantis was dismissed by federal judge.
  
• Deutsche BANK - will lay off thousands of employees to cut costs, and also announced a $1b stock buyback.
  
• RACE - Ferrari up 5% after earnings, net profits rise 33%, initiated a bullish 2024 outlook.
  

• Goldman Sachs expects US fed to begin rate cuts in May, instead of March.
• Wells Fargo says they expect May rate cut with total of 215 bps of cuts in 2024.
• China’s vice finance minister said that they will appropriately increase investment under the central government budget.
• Said fiscal policy would help to expand domestic demand.
• This is short term bullish for Chinese stocks, but extent of impact yet to be determined.
• OPEC will review whether to extend 2.2m BPD voluntary cuts, which are due to expire at ehe nd of Q1 2024.
• OPEC panel reiterates readiness to take additional measures.
• ECB’s Centeno:
• If inflation continues on same trajectory in coming months, next decision will be to cut and start cycle of normalisation of rates
• US cent com says Houthi missiles targeting ships and iranian UAVs have been destroyed.

• Yesterday, Powell made a bit of a hawkish comment at the press conference when he said that a March rate cut is not probable. This comes despite starting it all off quite dovish saying that they are already confident in the data, and just want to see more of the same, rather than better.
• This sent markets lower into the close and dollar higher.
• A few things I want to note.

1. On the face of it, the comment is hawkish. Markets immediately repriced the chance of a Fed cut in March from 50% to 35%. This makes sense, don’t fight the Fed when Powell is telling you something explicitly.
2. However, a few things tell me that maybe the market won’t take this as hawkishly as maybe it should, and the dip could well get bought here.

• Firstly, look at the USD. The level it was trading at into the December FOMC meeting was 103.8. That’s why I keep talking about that as a resistance point. Markets tend to respect levels they were trading at before major events.
• If we see, despite Powell’s hawkishness yesterday, DXy, which was already trading close to 103.3, failed to break above 103.8. In fact today, following jobless claims, its down to 103.5. I think that without a big break above 103.8, it tells us that traders are not fully worried about a persistently hawkish fed, which will imply that equity sell offs won’t last long.
• Furthermore, look at bond yields. Despite USD jumping and equities selling off, bond yields fell, as positioning on TLT was quite bullish.
• IIf Fed was then to be very hawkish, you’d expect that to rise too.

• Finally, look at positioning into the morning.
• Risk reversal on dollar continues to point lower.
• Markets are pricing a drop in dollar still to come, not a potential move higher. Obviously Jobs data tomorrow needs to play ball, but markets aren’t worried.
  
• Skew pushed higher in SPX this morning even after the sell off yesterday. This comes as traders are selling OTM puts and buying OTM calls this morning.
  https://imgur.com/a/LkQgBWS
  yes, money flows have pulled back, this is a sign hedge funds may be taking profits, but look at the money flows on QQQ. They are on fire. Reaching new highs, this tells us hedge funds want to buy this dip again. They’re not taking money off the table here.
  
• IWM bit worse off, skew pointed lower quite sharply after Powell said no rate cuts, but thats because theyre more sensitive to yields. Money flows still point higher here, and looks like in premarket traders are buying back some of the OTM calls they sold yesterday.
  
• Some of this improvement in skew this morning may be the result of traders following price action, and alleviating some of their fears. But definitely, signs are there that this dip won’t be a big one.
  
• Markets are still pricing 6 rate cuts for 2024.
  

• Current spot is 4865.
• Low of yesterday was 4846. The fact that this was low of yesterday will make this a support today.
• The key level is the HVL of 4865. This is the level that separates positive and negative gamma. The faster we move above this the better. Below this level, market makers will be trying o stay delta hedged which will mean they long ups and sell downs. This means volatility below this level will be exacerbated.
• My quant says the high of the day expected to be 4881. We can see that before fed meeting we were trading t 4888. That confirms that this level will be a resistance fo the day.
• If somehow we go above this, 4900 will be a level to watch, but this is unlikely.
• On downside, my quant says low of the day expected to be 4809. This means reversal expected from here.
• 4800 will act as a support.

• Current price 419.76
• Low of da yesterday was 416.80
• This coincides with the gamma level at 417. That will offer some support today I think.
• Below that, we have the put support for QQQ at 415, which will defo offer some support. Will take a lot of volume to break that.
• My quant says the mininmum of day will be 412.58. This means reversal expected from here if we get there.
• Quant says high of day expected to be 421.37
• Call resistance still at 430.
• Notice: call resistance for SPX remained at 5000, and on QQQ remained at 430. This confirms traders didn’t pull back positioning as much as you might expect.

• AUSTRALIA BUILDING PERMITS:
• Declined by 9.5% MOM vs an expectation for an increase of 1.1%
• First time negative since September.
• Sign of slowing economic outlook there.
  
• CHINA CAIXIN MANUFACTURING PMI:
  
• Similar to what was released a couple of days ago, but this is from a private company’s data:
  
• Came out at 50.8, vs forecast of 50.6.
  
• Just about in expansion, more or less where its been for the last few months. No major surprise here.
  

• EURO INFLATION READING:
• Core inflation came 3.3% vs 3.2% expected. Down from 3.4%.
• So declined, but slower than expected.
• Headline inflation rate came out at 2.8%, vs expectation of 2.7%. Last month was 2.9%.
• So again, slightly slower decline than expected.
• This implies a slightly lower chance of Euro rate cut, but rate futures barely changed. Also risk reversal on EURUSD pointing lower, so no major effect on EUR.

• Voted to keep rates stable as expected. No surprise there. Everyone knew that would happen.
• Where there was some more scrutiny was with regards to how people voted.
• Last time, 6 voted to hold rates, 3 voted to hike.
• Here, we saw 6 vote to hold again, but this time, only 2 voted to hike. 1 actually voted to cut.
• So this means BOE members are getting less hawkish.
• More from the BOE statement:
• Will ensure bank rate restrictive for long enough to bring inflation back to 2% in medium term.
• Dropped language that “further tightening in monetary policy required if evidence of more inflation”. - dovish.
• Expects services CPI to rise slightly before falling later in Q2.
• Said CPI will reach target in Q2 2024, but said will rise back above 2% in Q3 2024, then fall back to 2% by 2026.
• Trimmed their expectations for wage growth to 4% YOY, vs 4.25% before.
• Said food prices will remain flat
• Despite this, uk money markets trim bets on BOE rate cuts slightly, now pricing 107 BPS in 2024, from 111 before BOE decision. More or less the same to be honest.
• More needs to be looked at with regards to Bailey press conference:
• Challenger job report says January hiring plans was lowest on record. Said January job cuts announced by US based employers, more than double December.
• Jobless claims confirmed a softening market. At 224k vs expectations of 212k. More jobless = weaker jobs market.
• Later, we have ISM PMI data for US

• DXY: trading at 103.6 before jobless numbers. Still been bouncing off the 103.8 resistance, which is the level dXY was trading at before December press conference. Since the market Is more sure of a rate cut by May than it was going into the FOMC meeting in December, this price of 103.8 will be a. Resistance.
• Dipped slightly after Jobless claims came soft.
• AUD headed lower. This is mostly a continuation of the move we started to see yesterday after the CPI came soft there which points to a more dovish RBA. This was made more by the fact that their building permit numbers showed a big MOM loss.
• EURO was lower, tested 1.078, but then recovered after the Euro CPI came down less than anticipated.
• GBP was lower, then jumped higher after BOE decision, despite a slight dovish tilt in the votes. This comes as BOE says that CPI will reach target in Q2 2024, but said will rise back above 2% in Q3 2024, only falling back to 2% by 2026.
• AUD moving toward 0.65
• EURUSD was at 1.078 then moved higher back above 1.08
• GBPUSD 1.266, after initially dropping to 1.262

• SPX:
• Before Powell spoke, was trading at 4888. That will create some resistance today then, and my quant confirms that as he draws the high of the day expected max at 4881.
• Closed yesterday at 4847, but pushed slightly higher in premarket to 4861.
• Nasdaq trading at 17231, is up around 0.4% from yesterday’s close at 17,130
• DJI trees more or less where it closed, at around 38,150. 38k will act as the support now for DJI.
• GER40 sold off yesterday with US markets, but is up 0.44% today, despite hotter Euro CPI.
• HKG50 up 0.3% today on China Finance VP saying they will do more supportive stimulus.
• Oil lower by 2.5% yesterday on rising dollar and fed not saying they will cut, which brings greater risk that US economy will come under pressure.

• TESLA - seeking to boost megabuck battery output and plan a new Nevada battery plant with CATL equipment.
• TSLA - Musk is moving on putting vote to shareholders to shift companies incorporation to Texas from Delaware, after judge voided his pay package.
• TSLA - Tesla China offer $1100 cash discount for select Model Y from February . This news is less substantial with the news above taking precedent.
• AMZN - up 1% ahead of earnings today.
• META flat ahead of earnings.

• NExtrracker up strongly on earnings. Massive beat on EPS by 100% and a raise to guidance.
• These earnings are dragging up other solar stocks.
• ALGN up on earnings after announcing upbeat Q1 revenue forecast. Company sees Q1 2024 revenue to be in the range of $960 mln - $980 mln, vs Wall Street estimates of $946.9 mln. Their q4 also beat.
• PLUG - completes first customer fill at Georgia green hydrogen plant. Mostly up on short squeeze after Roth MKM upgrade yesterday
• NSC up sharply after Ancora led group takes a $1b stake in bid to oust CEO. So big active investors investing
• CTVA up on earnigns, announced a $1b repurchase plan. Net sales came in at $3.71 billion, compared to estimates of $3.62 billion, as per LSEG data. They absolutely smashed EPS estimates too.
• This is dragging other agriculture stocks like AGCO higher.
• Ball up on earnings, despite citing beer brand disruption. Said there is some tepid demand. Will dig into this more as haven’t read full report
• PH up after raising Fiscal year outlook due to lift from aerospace demand. Said their guidance is now raised to 23.9-24.5, which is a raise by 6%. Very good.
• ATKR up on earnings. EPS and sales beat. Will read more.
• ETN higher after seeing full year estimates for profit above expectation, due to strong equipment demand for data centres. This stock is on an absolute tear as well.
• CHRW down after downgraded to sell due to financial struggles and market pressures. No good
• HON - pdown after earnings. Their Q4 revenue guidance of 38.1-38.9 missed esimtates of 39.02. EPS of 9.8-10.1 slightly short of 9.97 estimate.
• BDX down after Q1 revenue miss, even though they lifted their 2024 profit forecast on surgical devices strength.
• ALGM down on earnigns, after Q4 net sales guided to be 230-240m vs estimates of 250m. Miss by 8%
• EPS of 0.19-0.23 missed by 25%.
• Nio - January delivery update:
• 10,055 vehicles devoured in Jan 2024, up 18% YOY
• DIS - will be starting to crackdown on password sharing on Hulu. Revised terms of service to ban password sharing explicitly, outside of primary personal residence.
  
• DIS - yesterday, Disney’s lawsuit against Ron DeSantis was dismissed by federal judge.
  
• Deutsche BANK - will lay off thousands of employees to cut costs, and also announced a $1b stock buyback.
  
• RACE - Ferrari up 5% after earnings, net profits rise 33%, initiated a bullish 2024 outlook.
  

• Goldman Sachs expects US fed to begin rate cuts in May, instead of March.
• Wells Fargo says they expect May rate cut with total of 215 bps of cuts in 2024.
• China’s vice finance minister said that they will appropriately increase investment under the central government budget.
• Said fiscal policy would help to expand domestic demand.
• This is short term bullish for Chinese stocks, but extent of impact yet to be determined.
• OPEC will review whether to extend 2.2m BPD voluntary cuts, which are due to expire at ehe nd of Q1 2024.
• OPEC panel reiterates readiness to take additional measures.
• ECB’s Centeno:
• If inflation continues on same trajectory in coming months, next decision will be to cut and start cycle of normalisation of rates
• US cent com says Houthi missiles targeting ships and iranian UAVs have been destroyed.

• Banking earnings won’t be reviewed in this report as I have to go out in premarket. Will try to add to my posts during the day. Have given review of Delta airlines as they were released before I left.
• Main impact will be on the Dow Jones as that’s where a lot of the banks sit, so watch that to see the impact.

• We noted yesterday and in the days leading up to the CPI release, that the market was positioned for a soft CPI. Risk reversal on EURUSD and AUDUSD were higher, and people were selling puts and buying calls.
• Obviously, CPI came in hotter than expectations, mainly driven up by Shelter inflation, which is now up 6%. Supercore also ticked up a little, and headline was driven up by gasoline prices (which is a bit unusual since anecdotal and other data sources suggest gasoline came down in the month).
• One might imagine that VIX, trading near 13 would spike, that the dollar would surge and equity markets would sell off as traders re-evaluate their expectation of rate cuts by March.
• Well, Not really.
• The initial algo reaction, as usual, sold equities and bid up dollar, which is a reaction to just the headline news.
• This might have caused some panic for traders who were watching price action (which is always a mistake btw because price action deceives you a lot of the time), but I was watching VIX closely, and there was literally still no one buying VIX.
• Continued to fall in fact, which was my signal that this dip would probably get bought.
• Furthermore, the CME fedwatch tool showed no change in expectation of rate cuts, which was my second signal.
• The dip immediately got bought in premarket.
• During the day, we saw VIX bounce of a key gamma level, which cause the gains to be pared somewhat, as SPX fell through the 4750 range that my quants had given for the min of the day.
• This dip was temporary however, as Vix got crushed further, traders sold OTM puts and bought calls.
• In short, traders weren’t buying the hot CPI narrative. Being led mostly by shelter, and shelter as we know is due to track real time rental prices which have fallen significantly. Chances are CPI is still just lagging real time inflation data.
• So what for positioning after the CPI?
• Well, it’s still pretty much where it was.
• FX options more or less unchanged. Traders keep betting on a stronger EUUSD as skew continues to tick higher.
• Implied volatility on SPX put options touch new low, which makes VIX drop lwoer.
• WTI skew looks bullish, pattern is very much the same, waiting for bullish breakout, which I guess we are seeing now.
• ITRAXX lower, investors still buying corporate bonds, positioning same as before CPI.
• QUICK NOTE ON TESLA:Following news this morning, skew is following price action and has moved lower slightly. The bad news is driven this one, positioning still not that bad, but worsening as sentiment around company worsens on news.https://imgur.com/a/dyxxS3u
• My quant says 220 a level to watch, but its broken it in premarket.
• AS you know I have a little bit in Tesla, average price 230 which was the put support. Its a very tiny position, will add to it around 215.———————

• EPS of 1.28 beat by 0.12 , which is a beat by 10% vs consensus.
• Revenue came in at 14.22b, up 6% yoy, which beat consensus by 2.8%
• The last quarter was relatively storng, operating margin expanded to 11.6%
• Expecting cash flow growth for full year.
• Said air travel demand remains strong and customer base is in healthy financial position and is prioritising travel.
• All of that was relatively bullish, but the cut to profit outlook is what’s sending DAL down in premarket.
• Cut profit outlook by profit outlook due to supply chain risks and economic risks.
• Expects adjusted profit of 6-7$ per share this year, down from previous target of $7 or more, Thats a cut of around 7.2%
• They said they cut the outlook to give the market an outlook they have confidence in although their target remains above 7$.
• Forecast for profit for Q1 was 0.25-0.5, which at midpoint is in line with expectations.
• Drags AAL, ALK and UAL with it.[I’ll have my eye on that stock, but won’t be. Buying till close to 36. Put support on stock at 35]

• DATA LEDE:
• CHINESE INFLATION:
• Came out -0.3% YOY vs expectations of -0.4%.
• MOM inflation came out at 0.1% vs forecast of 0.2%
• So remains in deflation YOY. MOM improvement. This data didn’t really have any surprises, more or less in line with expectations.
• CHINA BALANCE OF TRADE:
• Showed exports improving YOY by 2.3%,a head of expectations of 1.7%
• Imports remain surpressed YOY at 0.2% vs forecast 0.3%
• This implies domestic consumption continues to be hampered. Global resilience shown as export demand for China improves.
• UK GDP NUMBERS:
• Came out YOY at 0.2% vs 0.2% forecast, previous was -0.1%
• 3 month average was -0.2% vs forecast of -0.1%
• Industrial production more negative than anticipated,
• Not an amazing GDP reading. Just about staying out of negative growth, 3 month average ticks from 0% last 2 months to negative for first time in a year.GBP down on the news.
• After the GDP news in UK, UK interest rate swaps pricing in 126bps of rate cuts by the ne dow the year. Was 122 bps yesterday. So more cuts expects, contributing to GBP move lower.US PPI
• After yesterday’s CPI came a little hot, we want to see PPI come in soft, to crush the dollar and reassert expectations that CPI is going to come down, as PPI is seen as leading indicator of CPI.Even an in line PPI will be taken positively, as positioning in the market remains bullish.

• Call resistance is 4800, so we are right up against it.
• We will need some volume from PPI to break it.
• Max of the day if we reach that high is likely to be around 4811. Remember, we have to break 4800 first.
• Min of the day expected to be 4750. Below that, we have HVL at 4745 which will likely act as a support too.
• On QQQ, we are unlikely to go higher than 413. Thats key reversal point.Other key levels are the call resistance at 409.78, and a big gamma level at 412.
• If we move lower, watch the levels at 407.Quant says to me low of day if we reach that low will be 405.51.

• GBP down as GDP comes in not great. 3 month average ticks from 0% last 2 months to negative for first time in a year. After the GDP news in UK, UK interest rate swaps pricing in 126bps of rate cuts by the ne dow the year. Was 122 bps yesterday. So more cuts expects, contributing to GBP move lower.
• AUD was higher but has come down as China CPI comes in more or less in line with expectation.
• EUR following GBP lwoer, whilst dollar has pipped up ahead of PPI.

• Ger40 up 0.36%. No major moves, positioning looking more bullish as it remains above key option level.
• SPX: Closed yesterday at 4780, more or less where it started. Pretty flat in premarket.
• Nasdaq: Holding above the 16,760 level which represents 2021 high. That is a support.
• HKG50 flat, holding above 16k after mixed CPI data out of China. No major alarms. Very bullish skew and call option activity.
• China A50 holding above 11k.
• Oil higher, to 75. Up 3% as US and UK battle Houthi rebels in what represents an escalation in tensions there. Positioning in oil had been bullish regardless.
• Bond yields flat this morning, after moving lower yesterday. Despite hot CPI, traders continue to bet on rate cuts in march.

• AAPL - changes to board of directors, as Al Gore retires.
• AAPL - ahead of Feb 2nd release date, AAPL will reportedly produce 60k - 80k units of Vision Pro.
• TESLA - will halt production at German Car Factory, as Red Sea conflict hits their supply chainTESLA - Bigger news, Tesla cuts their China prices, for Model 3 and Model Y. That squeezes profit margins so Tesla is down on that news.
• TESLA - news yesterday that all US production workers are getting a pay raise. Further squeezes margins.
• Other Chinese EV makers are following them lower.
• NVDA - secures $1b AI chip deal in India, signals market expansion. (Yesterdays news)
• NVDA - also painters with Mercedes to pursue self driving cars
• AMZN - cuts 5% of Audible division workforce
• MSFT - takes crown as biggest public company in world from AAPL.

• DIS - Disney owned animation Studio Pixar, poised to undergo layoffs this year, as high as 20%.
• CVS - will close dozens of pharmacies inside Target stores.
• EV stocks following Tesla lower.
• Airlines lower on DAL earnings
• ESTC - cut to equal weight at Barclays, price target 110, 2% below spot.
• JCI cut to underperform by RBC capital, price target 50, 15% below spot.
• SNOW - cut to equal weight from overweight, price target at 198, 2% above spot.
• PATH - maintained at equal weight, price target flat to spot.
• IFF - raised to buy from hold by Jefferies, price target 40% above spot.
• CIEN - raised to outperform by Evercore, from in line. Price target 57

• Citi lowers Brent price outlook for 2024 and 2025 due to oversupply fears. Positioning on oil still looks bullish.
• China’s Copper concentrate and iron ore imports hit record high in 2023. Same with steel, highest since records began.BOJ is apparently considering lowering their forecasts for growth and inflation, according to BBG. Thats a major blow to rate hike chances.
• After the GDP news in UK, UK interest rate swaps pricing in 126bps of rate cuts by the ne dow the year. Was 122 bps yesterday. So more cuts expects, contributing to GDP move lower.
• Following the report, Goldman reduces their 2024 GDP growth forecast to 0.5% from 0.6%.
• As part of China’s customs report, they said that disruptions in Red Sea may impact trade. Said external demand remains tepid.Said more efforts required to stabilise trade in 2024.Said, however, that 2023 has gone better than expected.
• Bank of America, citing EPFR data says that tech has seen the largest inflow in 19 weeks. Bonds also seeing inflows, largest since April.
• Yesterday, Fed’s Mester said that March is too early or her for a rate cut, she said she needs to see more evidence. Still, she said policy I sin a good place.
• Yesterday, Fed’s Goolsbee says inflation will be primary determinant of when and how much to cut rates. Right now fed is still on golden path, can be derailed he said. Risks to this golden path include higher shelter inflation and potential supply shocks, he said.
• Yesterday. Fed’s Barkin said that he is still looking to be convinced that inflation is headed to the target.
• Lagarde, yesterday. Said that rate cuts can start again once the data confirms the inflation path is clearly coming down.
• European Commission will conduct inspections of Chinese EV makers including BYD, as part of probe into chinese subsidies, which may lead to tariffs.
• US and UK conduct precision strikes on Houthi facilities with RAF typhoons.
• Shipping stocks are higher in premarket after US and UK strike Houthi targets.Houthis say US British attack will not go without response or punishment.
• Pentagon chief has said will target Houthi capabilities including Drones, missiles, radar. Said aim is to deescalate tensions dn restore stability in Red Sea.
• Spanish government raises minimum age by 5% this year.

• Banking earnings won’t be reviewed in this report as I have to go out in premarket. Will try to add to my posts during the day. Have given review of Delta airlines as they were released before I left.
  
• Main impact will be on the Dow Jones as that’s where a lot of the banks sit, so watch that to see the impact. ———— Let’s get into what CPI means for the market positioning.
  
• We noted yesterday and in the days leading up to the CPI release, that the market was positioned for a soft CPI. Risk reversal on EURUSD and AUDUSD were higher, and people were selling puts and buying calls.
  
• Obviously, CPI came in hotter than expectations, mainly driven up by Shelter inflation, which is now up 6%. Supercore also ticked up a little, and headline was driven up by gasoline prices (which is a bit unusual since anecdotal and other data sources suggest gasoline came down in the month).
  
• One might imagine that VIX, trading near 13 would spike, that the dollar would surge and equity markets would sell off as traders re-evaluate their expectation of rate cuts by March.
  
• Well, Not really.
  
• The initial algo reaction, as usual, sold equities and bid up dollar, which is a reaction to just the headline news.
  
• This might have caused some panic for traders who were watching price action (which is always a mistake btw because price action deceives you a lot of the time), but I was watching VIX closely, and there was literally still no one buying VIX.
  
• Continued to fall in fact, which was my signal that this dip would probably get bought.
  
• Furthermore, the CME fedwatch tool showed no change in expectation of rate cuts, which was my second signal.
  
• The dip immediately got bought in premarket.
  
• During the day, we saw VIX bounce of a key gamma level, which cause the gains to be pared somewhat, as SPX fell through the 4750 range that my quants had given for the min of the day.
  
• This dip was temporary however, as Vix got crushed further, traders sold OTM puts and bought calls.
  
• In short, traders weren’t buying the hot CPI narrative. Being led mostly by shelter, and shelter as we know is due to track real time rental prices which have fallen significantly. Chances are CPI is still just lagging real time inflation data.
  
• So what for positioning after the CPI?
  
• Well, it’s still pretty much where it was.
  
• FX options more or less unchanged. Traders keep betting on a stronger EUUSD as skew continues to tick higher.
  
• Implied volatility on SPX put options touch new low, which makes VIX drop lwoer.
  
• WTI skew looks bullish, pattern is very much the same, waiting for bullish breakout, which I guess we are seeing now.
  
• ITRAXX lower, investors still buying corporate bonds, positioning same as before CPI.
  
• QUICK NOTE ON TESLA: Following news this morning, skew is following price action and has moved lower slightly. The bad news is driven this one, positioning still not that bad, but worsening as sentiment around company worsens on news. https://imgur.com/a/dyxxS3u
  
• My quant says 220 a level to watch, but its broken it in premarket.
  
• AS you know I have a little bit in Tesla, average price 230 which was the put support. Its a very tiny position, will add to it around 215. ———————
  

• EPS of 1.28 beat by 0.12 , which is a beat by 10% vs consensus.
• Revenue came in at 14.22b, up 6% yoy, which beat consensus by 2.8%
  
• The last quarter was relatively storng, operating margin expanded to 11.6%
  
• Expecting cash flow growth for full year.
  
• Said air travel demand remains strong and customer base is in healthy financial position and is prioritising travel.
  
• All of that was relatively bullish, but the cut to profit outlook is what’s sending DAL down in premarket.
  
• Cut profit outlook by profit outlook due to supply chain risks and economic risks.
  
• Expects adjusted profit of 6-7$ per share this year, down from previous target of $7 or more, Thats a cut of around 7.2%
  
• They said they cut the outlook to give the market an outlook they have confidence in although their target remains above 7$.
  
• Forecast for profit for Q1 was 0.25-0.5, which at midpoint is in line with expectations.
  
• Drags AAL, ALK and UAL with it. [I’ll have my eye on that stock, but won’t be. Buying till close to 36. Put support on stock at 35]
  
• DATA LEDE:
  
• CHINESE INFLATION:
  
• Came out -0.3% YOY vs expectations of -0.4%.
  
• MOM inflation came out at 0.1% vs forecast of 0.2%
  
• So remains in deflation YOY. MOM improvement. This data didn’t really have any surprises, more or less in line with expectations.
  
• CHINA BALANCE OF TRADE:
  
• Showed exports improving YOY by 2.3%,a head of expectations of 1.7%
  
• Imports remain surpressed YOY at 0.2% vs forecast 0.3%
  
• This implies domestic consumption continues to be hampered. Global resilience shown as export demand for China improves.
  
• UK GDP NUMBERS:
  
• Came out YOY at 0.2% vs 0.2% forecast, previous was -0.1%
  
• 3 month average was -0.2% vs forecast of -0.1%
  
• Industrial production more negative than anticipated,
  
• Not an amazing GDP reading. Just about staying out of negative growth, 3 month average ticks from 0% last 2 months to negative for first time in a year. GBP down on the news.
  
• After the GDP news in UK, UK interest rate swaps pricing in 126bps of rate cuts by the ne dow the year. Was 122 bps yesterday. So more cuts expects, contributing to GBP move lower. US PPI
  
• After yesterday’s CPI came a little hot, we want to see PPI come in soft, to crush the dollar and reassert expectations that CPI is going to come down, as PPI is seen as leading indicator of CPI. Even an in line PPI will be taken positively, as positioning in the market remains bullish.
  

• Call resistance is 4800, so we are right up against it.
  
• We will need some volume from PPI to break it.
  
• Max of the day if we reach that high is likely to be around 4811. Remember, we have to break 4800 first.
  
• Min of the day expected to be 4750. Below that, we have HVL at 4745 which will likely act as a support too.
  
• On QQQ, we are unlikely to go higher than 413. Thats key reversal point. Other key levels are the call resistance at 409.78, and a big gamma level at 412.
  
• If we move lower, watch the levels at 407. Quant says to me low of day if we reach that low will be 405.51.
  

• GBP down as GDP comes in not great. 3 month average ticks from 0% last 2 months to negative for first time in a year. After the GDP news in UK, UK interest rate swaps pricing in 126bps of rate cuts by the ne dow the year. Was 122 bps yesterday. So more cuts expects, contributing to GBP move lower.
  
• AUD was higher but has come down as China CPI comes in more or less in line with expectation.
  
• EUR following GBP lwoer, whilst dollar has pipped up ahead of PPI.
  

• Ger40 up 0.36%. No major moves, positioning looking more bullish as it remains above key option level.
  
• SPX: Closed yesterday at 4780, more or less where it started. Pretty flat in premarket.
  
• Nasdaq: Holding above the 16,760 level which represents 2021 high. That is a support.
  
• HKG50 flat, holding above 16k after mixed CPI data out of China. No major alarms. Very bullish skew and call option activity.
  
• China A50 holding above 11k.
  
• Oil higher, to 75. Up 3% as US and UK battle Houthi rebels in what represents an escalation in tensions there. Positioning in oil had been bullish regardless.
  
• Bond yields flat this morning, after moving lower yesterday. Despite hot CPI, traders continue to bet on rate cuts in march.
  

• AAPL - changes to board of directors, as Al Gore retires.
  
• AAPL - ahead of Feb 2nd release date, AAPL will reportedly produce 60k - 80k units of Vision Pro.
  
• TESLA - will halt production at German Car Factory, as Red Sea conflict hits their supply chain TESLA - Bigger news, Tesla cuts their China prices, for Model 3 and Model Y. That squeezes profit margins so Tesla is down on that news.
  
• TESLA - news yesterday that all US production workers are getting a pay raise. Further squeezes margins.
  
• Other Chinese EV makers are following them lower.
  
• NVDA - secures $1b AI chip deal in India, signals market expansion. (Yesterdays news)
  
• NVDA - also painters with Mercedes to pursue self driving cars
  
• AMZN - cuts 5% of Audible division workforce
  
• MSFT - takes crown as biggest public company in world from AAPL.
  

• DIS - Disney owned animation Studio Pixar, poised to undergo layoffs this year, as high as 20%.
  
• CVS - will close dozens of pharmacies inside Target stores.
  
• EV stocks following Tesla lower.
  
• Airlines lower on DAL earnings
  
• ESTC - cut to equal weight at Barclays, price target 110, 2% below spot.
  
• JCI cut to underperform by RBC capital, price target 50, 15% below spot.
  
• SNOW - cut to equal weight from overweight, price target at 198, 2% above spot.
  
• PATH - maintained at equal weight, price target flat to spot.
  
• IFF - raised to buy from hold by Jefferies, price target 40% above spot.
  
• CIEN - raised to outperform by Evercore, from in line. Price target 57
  

• Citi lowers Brent price outlook for 2024 and 2025 due to oversupply fears. Positioning on oil still looks bullish.
  
• China’s Copper concentrate and iron ore imports hit record high in 2023. Same with steel, highest since records began. BOJ is apparently considering lowering their forecasts for growth and inflation, according to BBG. Thats a major blow to rate hike chances.
  
• After the GDP news in UK, UK interest rate swaps pricing in 126bps of rate cuts by the ne dow the year. Was 122 bps yesterday. So more cuts expects, contributing to GDP move lower.
  
• Following the report, Goldman reduces their 2024 GDP growth forecast to 0.5% from 0.6%.
  
• As part of China’s customs report, they said that disruptions in Red Sea may impact trade. Said external demand remains tepid. Said more efforts required to stabilise trade in 2024. Said, however, that 2023 has gone better than expected.
  
• Bank of America, citing EPFR data says that tech has seen the largest inflow in 19 weeks. Bonds also seeing inflows, largest since April.
  
• Yesterday, Fed’s Mester said that March is too early or her for a rate cut, she said she needs to see more evidence. Still, she said policy I sin a good place.
  
• Yesterday, Fed’s Goolsbee says inflation will be primary determinant of when and how much to cut rates. Right now fed is still on golden path, can be derailed he said. Risks to this golden path include higher shelter inflation and potential supply shocks, he said.
  
• Yesterday. Fed’s Barkin said that he is still looking to be convinced that inflation is headed to the target.
  
• Lagarde, yesterday. Said that rate cuts can start again once the data confirms the inflation path is clearly coming down.
  
• European Commission will conduct inspections of Chinese EV makers including BYD, as part of probe into chinese subsidies, which may lead to tariffs.
  
• US and UK conduct precision strikes on Houthi facilities with RAF typhoons.
  
• Shipping stocks are higher in premarket after US and UK strike Houthi targets. Houthis say US British attack will not go without response or punishment.
  
• Pentagon chief has said will target Houthi capabilities including Drones, missiles, radar. Said aim is to deescalate tensions dn restore stability in Red Sea.
  
• Spanish government raises minimum age by 5% this year.
  

• Banking earnings won’t be reviewed in this report as I have to go out in premarket. Will try to add to my posts during the day. Have given review of Delta airlines as they were released before I left.
  
• Main impact will be on the Dow Jones as that’s where a lot of the banks sit, so watch that to see the impact. ———— Let’s get into what CPI means for the market positioning.
  
• We noted yesterday and in the days leading up to the CPI release, that the market was positioned for a soft CPI. Risk reversal on EURUSD and AUDUSD were higher, and people were selling puts and buying calls.
  
• Obviously, CPI came in hotter than expectations, mainly driven up by Shelter inflation, which is now up 6%. Supercore also ticked up a little, and headline was driven up by gasoline prices (which is a bit unusual since anecdotal and other data sources suggest gasoline came down in the month).
  
• One might imagine that VIX, trading near 13 would spike, that the dollar would surge and equity markets would sell off as traders re-evaluate their expectation of rate cuts by March.
  
• Well, Not really.
  
• The initial algo reaction, as usual, sold equities and bid up dollar, which is a reaction to just the headline news.
  
• This might have caused some panic for traders who were watching price action (which is always a mistake btw because price action deceives you a lot of the time), but I was watching VIX closely, and there was literally still no one buying VIX.
  
• Continued to fall in fact, which was my signal that this dip would probably get bought.
  
• Furthermore, the CME fedwatch tool showed no change in expectation of rate cuts, which was my second signal.
  
• The dip immediately got bought in premarket.
  
• During the day, we saw VIX bounce of a key gamma level, which cause the gains to be pared somewhat, as SPX fell through the 4750 range that my quants had given for the min of the day.
  
• This dip was temporary however, as Vix got crushed further, traders sold OTM puts and bought calls.
  
• In short, traders weren’t buying the hot CPI narrative. Being led mostly by shelter, and shelter as we know is due to track real time rental prices which have fallen significantly. Chances are CPI is still just lagging real time inflation data.
  
• So what for positioning after the CPI?
  
• Well, it’s still pretty much where it was.
  
• FX options more or less unchanged. Traders keep betting on a stronger EUUSD as skew continues to tick higher.
  
• Implied volatility on SPX put options touch new low, which makes VIX drop lwoer.
  
• WTI skew looks bullish, pattern is very much the same, waiting for bullish breakout, which I guess we are seeing now.
  
• ITRAXX lower, investors still buying corporate bonds, positioning same as before CPI.
  
• QUICK NOTE ON TESLA: Following news this morning, skew is following price action and has moved lower slightly. The bad news is driven this one, positioning still not that bad, but worsening as sentiment around company worsens on news. https://imgur.com/a/dyxxS3u
  
• My quant says 220 a level to watch, but its broken it in premarket.
  
• AS you know I have a little bit in Tesla, average price 230 which was the put support. Its a very tiny position, will add to it around 215. ———————
  

• EPS of 1.28 beat by 0.12 , which is a beat by 10% vs consensus.
• Revenue came in at 14.22b, up 6% yoy, which beat consensus by 2.8%
  
• The last quarter was relatively storng, operating margin expanded to 11.6%
  
• Expecting cash flow growth for full year.
  
• Said air travel demand remains strong and customer base is in healthy financial position and is prioritising travel.
  
• All of that was relatively bullish, but the cut to profit outlook is what’s sending DAL down in premarket.
  
• Cut profit outlook by profit outlook due to supply chain risks and economic risks.
  
• Expects adjusted profit of 6-7$ per share this year, down from previous target of $7 or more, Thats a cut of around 7.2%
  
• They said they cut the outlook to give the market an outlook they have confidence in although their target remains above 7$.
  
• Forecast for profit for Q1 was 0.25-0.5, which at midpoint is in line with expectations.
  
• Drags AAL, ALK and UAL with it. [I’ll have my eye on that stock, but won’t be. Buying till close to 36. Put support on stock at 35]
  
• DATA LEDE:
  
• CHINESE INFLATION:
  
• Came out -0.3% YOY vs expectations of -0.4%.
  
• MOM inflation came out at 0.1% vs forecast of 0.2%
  
• So remains in deflation YOY. MOM improvement. This data didn’t really have any surprises, more or less in line with expectations.
  
• CHINA BALANCE OF TRADE:
  
• Showed exports improving YOY by 2.3%,a head of expectations of 1.7%
  
• Imports remain surpressed YOY at 0.2% vs forecast 0.3%
  
• This implies domestic consumption continues to be hampered. Global resilience shown as export demand for China improves.
  
• UK GDP NUMBERS:
  
• Came out YOY at 0.2% vs 0.2% forecast, previous was -0.1%
  
• 3 month average was -0.2% vs forecast of -0.1%
  
• Industrial production more negative than anticipated,
  
• Not an amazing GDP reading. Just about staying out of negative growth, 3 month average ticks from 0% last 2 months to negative for first time in a year. GBP down on the news.
  
• After the GDP news in UK, UK interest rate swaps pricing in 126bps of rate cuts by the ne dow the year. Was 122 bps yesterday. So more cuts expects, contributing to GBP move lower. US PPI
  
• After yesterday’s CPI came a little hot, we want to see PPI come in soft, to crush the dollar and reassert expectations that CPI is going to come down, as PPI is seen as leading indicator of CPI. Even an in line PPI will be taken positively, as positioning in the market remains bullish.
  

• Call resistance is 4800, so we are right up against it.
  
• We will need some volume from PPI to break it.
  
• Max of the day if we reach that high is likely to be around 4811. Remember, we have to break 4800 first.
  
• Min of the day expected to be 4750. Below that, we have HVL at 4745 which will likely act as a support too.
  
• On QQQ, we are unlikely to go higher than 413. Thats key reversal point. Other key levels are the call resistance at 409.78, and a big gamma level at 412.
  
• If we move lower, watch the levels at 407. Quant says to me low of day if we reach that low will be 405.51.
  

• GBP down as GDP comes in not great. 3 month average ticks from 0% last 2 months to negative for first time in a year. After the GDP news in UK, UK interest rate swaps pricing in 126bps of rate cuts by the ne dow the year. Was 122 bps yesterday. So more cuts expects, contributing to GBP move lower.
  
• AUD was higher but has come down as China CPI comes in more or less in line with expectation.
  
• EUR following GBP lwoer, whilst dollar has pipped up ahead of PPI.
  

• Ger40 up 0.36%. No major moves, positioning looking more bullish as it remains above key option level.
  
• SPX: Closed yesterday at 4780, more or less where it started. Pretty flat in premarket.
  
• Nasdaq: Holding above the 16,760 level which represents 2021 high. That is a support.
  
• HKG50 flat, holding above 16k after mixed CPI data out of China. No major alarms. Very bullish skew and call option activity.
  
• China A50 holding above 11k.
  
• Oil higher, to 75. Up 3% as US and UK battle Houthi rebels in what represents an escalation in tensions there. Positioning in oil had been bullish regardless.
  
• Bond yields flat this morning, after moving lower yesterday. Despite hot CPI, traders continue to bet on rate cuts in march.
  

• AAPL - changes to board of directors, as Al Gore retires.
  
• AAPL - ahead of Feb 2nd release date, AAPL will reportedly produce 60k - 80k units of Vision Pro.
  
• TESLA - will halt production at German Car Factory, as Red Sea conflict hits their supply chain TESLA - Bigger news, Tesla cuts their China prices, for Model 3 and Model Y. That squeezes profit margins so Tesla is down on that news.
  
• TESLA - news yesterday that all US production workers are getting a pay raise. Further squeezes margins.
  
• Other Chinese EV makers are following them lower.
  
• NVDA - secures $1b AI chip deal in India, signals market expansion. (Yesterdays news)
  
• NVDA - also painters with Mercedes to pursue self driving cars
  
• AMZN - cuts 5% of Audible division workforce
  
• MSFT - takes crown as biggest public company in world from AAPL.
  

• DIS - Disney owned animation Studio Pixar, poised to undergo layoffs this year, as high as 20%.
  
• CVS - will close dozens of pharmacies inside Target stores.
  
• EV stocks following Tesla lower.
  
• Airlines lower on DAL earnings
  
• ESTC - cut to equal weight at Barclays, price target 110, 2% below spot.
  
• JCI cut to underperform by RBC capital, price target 50, 15% below spot.
  
• SNOW - cut to equal weight from overweight, price target at 198, 2% above spot.
  
• PATH - maintained at equal weight, price target flat to spot.
  
• IFF - raised to buy from hold by Jefferies, price target 40% above spot.
  
• CIEN - raised to outperform by Evercore, from in line. Price target 57
  

• Citi lowers Brent price outlook for 2024 and 2025 due to oversupply fears. Positioning on oil still looks bullish.
  
• China’s Copper concentrate and iron ore imports hit record high in 2023. Same with steel, highest since records began. BOJ is apparently considering lowering their forecasts for growth and inflation, according to BBG. Thats a major blow to rate hike chances.
  
• After the GDP news in UK, UK interest rate swaps pricing in 126bps of rate cuts by the ne dow the year. Was 122 bps yesterday. So more cuts expects, contributing to GDP move lower.
  
• Following the report, Goldman reduces their 2024 GDP growth forecast to 0.5% from 0.6%.
  
• As part of China’s customs report, they said that disruptions in Red Sea may impact trade. Said external demand remains tepid. Said more efforts required to stabilise trade in 2024. Said, however, that 2023 has gone better than expected.
  
• Bank of America, citing EPFR data says that tech has seen the largest inflow in 19 weeks. Bonds also seeing inflows, largest since April.
  
• Yesterday, Fed’s Mester said that March is too early or her for a rate cut, she said she needs to see more evidence. Still, she said policy I sin a good place.
  
• Yesterday, Fed’s Goolsbee says inflation will be primary determinant of when and how much to cut rates. Right now fed is still on golden path, can be derailed he said. Risks to this golden path include higher shelter inflation and potential supply shocks, he said.
  
• Yesterday. Fed’s Barkin said that he is still looking to be convinced that inflation is headed to the target.
  
• Lagarde, yesterday. Said that rate cuts can start again once the data confirms the inflation path is clearly coming down.
  
• European Commission will conduct inspections of Chinese EV makers including BYD, as part of probe into chinese subsidies, which may lead to tariffs.
  
• US and UK conduct precision strikes on Houthi facilities with RAF typhoons.
  
• Shipping stocks are higher in premarket after US and UK strike Houthi targets. Houthis say US British attack will not go without response or punishment.
  
• Pentagon chief has said will target Houthi capabilities including Drones, missiles, radar. Said aim is to deescalate tensions dn restore stability in Red Sea.
  
• Spanish government raises minimum age by 5% this year.
  

• Banking earnings won’t be reviewed in this report as I have to go out in premarket. Will try to add to my posts during the day. Have given review of Delta airlines as they were released before I left.
  
• Main impact will be on the Dow Jones as that’s where a lot of the banks sit, so watch that to see the impact. ———— Let’s get into what CPI means for the market positioning.
  
• We noted yesterday and in the days leading up to the CPI release, that the market was positioned for a soft CPI. Risk reversal on EURUSD and AUDUSD were higher, and people were selling puts and buying calls.
  
• Obviously, CPI came in hotter than expectations, mainly driven up by Shelter inflation, which is now up 6%. Supercore also ticked up a little, and headline was driven up by gasoline prices (which is a bit unusual since anecdotal and other data sources suggest gasoline came down in the month).
  
• One might imagine that VIX, trading near 13 would spike, that the dollar would surge and equity markets would sell off as traders re-evaluate their expectation of rate cuts by March.
  
• Well, Not really.
  
• The initial algo reaction, as usual, sold equities and bid up dollar, which is a reaction to just the headline news.
  
• This might have caused some panic for traders who were watching price action (which is always a mistake btw because price action deceives you a lot of the time), but I was watching VIX closely, and there was literally still no one buying VIX.
  
• Continued to fall in fact, which was my signal that this dip would probably get bought.
  
• Furthermore, the CME fedwatch tool showed no change in expectation of rate cuts, which was my second signal.
  
• The dip immediately got bought in premarket.
  
• During the day, we saw VIX bounce of a key gamma level, which cause the gains to be pared somewhat, as SPX fell through the 4750 range that my quants had given for the min of the day.
  
• This dip was temporary however, as Vix got crushed further, traders sold OTM puts and bought calls.
  
• In short, traders weren’t buying the hot CPI narrative. Being led mostly by shelter, and shelter as we know is due to track real time rental prices which have fallen significantly. Chances are CPI is still just lagging real time inflation data.
  
• So what for positioning after the CPI?
  
• Well, it’s still pretty much where it was.
  
• FX options more or less unchanged. Traders keep betting on a stronger EUUSD as skew continues to tick higher.
  
• Implied volatility on SPX put options touch new low, which makes VIX drop lwoer.
  
• WTI skew looks bullish, pattern is very much the same, waiting for bullish breakout, which I guess we are seeing now.
  
• ITRAXX lower, investors still buying corporate bonds, positioning same as before CPI.
  
• QUICK NOTE ON TESLA: Following news this morning, skew is following price action and has moved lower slightly. The bad news is driven this one, positioning still not that bad, but worsening as sentiment around company worsens on news. https://imgur.com/a/dyxxS3u
  
• My quant says 220 a level to watch, but its broken it in premarket.
  
• AS you know I have a little bit in Tesla, average price 230 which was the put support. Its a very tiny position, will add to it around 215. ———————
  

• EPS of 1.28 beat by 0.12 , which is a beat by 10% vs consensus.
• Revenue came in at 14.22b, up 6% yoy, which beat consensus by 2.8%
  
• The last quarter was relatively storng, operating margin expanded to 11.6%
  
• Expecting cash flow growth for full year.
  
• Said air travel demand remains strong and customer base is in healthy financial position and is prioritising travel.
  
• All of that was relatively bullish, but the cut to profit outlook is what’s sending DAL down in premarket.
  
• Cut profit outlook by profit outlook due to supply chain risks and economic risks.
  
• Expects adjusted profit of 6-7$ per share this year, down from previous target of $7 or more, Thats a cut of around 7.2%
  
• They said they cut the outlook to give the market an outlook they have confidence in although their target remains above 7$.
  
• Forecast for profit for Q1 was 0.25-0.5, which at midpoint is in line with expectations.
  
• Drags AAL, ALK and UAL with it. [I’ll have my eye on that stock, but won’t be. Buying till close to 36. Put support on stock at 35]
  
• DATA LEDE:
  
• CHINESE INFLATION:
  
• Came out -0.3% YOY vs expectations of -0.4%.
  
• MOM inflation came out at 0.1% vs forecast of 0.2%
  
• So remains in deflation YOY. MOM improvement. This data didn’t really have any surprises, more or less in line with expectations.
  
• CHINA BALANCE OF TRADE:
  
• Showed exports improving YOY by 2.3%,a head of expectations of 1.7%
  
• Imports remain surpressed YOY at 0.2% vs forecast 0.3%
  
• This implies domestic consumption continues to be hampered. Global resilience shown as export demand for China improves.
  
• UK GDP NUMBERS:
  
• Came out YOY at 0.2% vs 0.2% forecast, previous was -0.1%
  
• 3 month average was -0.2% vs forecast of -0.1%
  
• Industrial production more negative than anticipated,
  
• Not an amazing GDP reading. Just about staying out of negative growth, 3 month average ticks from 0% last 2 months to negative for first time in a year. GBP down on the news.
  
• After the GDP news in UK, UK interest rate swaps pricing in 126bps of rate cuts by the ne dow the year. Was 122 bps yesterday. So more cuts expects, contributing to GBP move lower. US PPI
  
• After yesterday’s CPI came a little hot, we want to see PPI come in soft, to crush the dollar and reassert expectations that CPI is going to come down, as PPI is seen as leading indicator of CPI. Even an in line PPI will be taken positively, as positioning in the market remains bullish.
  

• Call resistance is 4800, so we are right up against it.
  
• We will need some volume from PPI to break it.
  
• Max of the day if we reach that high is likely to be around 4811. Remember, we have to break 4800 first.
  
• Min of the day expected to be 4750. Below that, we have HVL at 4745 which will likely act as a support too.
  
• On QQQ, we are unlikely to go higher than 413. Thats key reversal point. Other key levels are the call resistance at 409.78, and a big gamma level at 412.
  
• If we move lower, watch the levels at 407. Quant says to me low of day if we reach that low will be 405.51.
  

• GBP down as GDP comes in not great. 3 month average ticks from 0% last 2 months to negative for first time in a year. After the GDP news in UK, UK interest rate swaps pricing in 126bps of rate cuts by the ne dow the year. Was 122 bps yesterday. So more cuts expects, contributing to GBP move lower.
  
• AUD was higher but has come down as China CPI comes in more or less in line with expectation.
  
• EUR following GBP lwoer, whilst dollar has pipped up ahead of PPI.
  

• Ger40 up 0.36%. No major moves, positioning looking more bullish as it remains above key option level.
  
• SPX: Closed yesterday at 4780, more or less where it started. Pretty flat in premarket.
  
• Nasdaq: Holding above the 16,760 level which represents 2021 high. That is a support.
  
• HKG50 flat, holding above 16k after mixed CPI data out of China. No major alarms. Very bullish skew and call option activity.
  
• China A50 holding above 11k.
  
• Oil higher, to 75. Up 3% as US and UK battle Houthi rebels in what represents an escalation in tensions there. Positioning in oil had been bullish regardless.
  
• Bond yields flat this morning, after moving lower yesterday. Despite hot CPI, traders continue to bet on rate cuts in march.
  

• AAPL - changes to board of directors, as Al Gore retires.
  
• AAPL - ahead of Feb 2nd release date, AAPL will reportedly produce 60k - 80k units of Vision Pro.
  
• TESLA - will halt production at German Car Factory, as Red Sea conflict hits their supply chain TESLA - Bigger news, Tesla cuts their China prices, for Model 3 and Model Y. That squeezes profit margins so Tesla is down on that news.
  
• TESLA - news yesterday that all US production workers are getting a pay raise. Further squeezes margins.
  
• Other Chinese EV makers are following them lower.
  
• NVDA - secures $1b AI chip deal in India, signals market expansion. (Yesterdays news)
  
• NVDA - also painters with Mercedes to pursue self driving cars
  
• AMZN - cuts 5% of Audible division workforce
  
• MSFT - takes crown as biggest public company in world from AAPL.
  

• DIS - Disney owned animation Studio Pixar, poised to undergo layoffs this year, as high as 20%.
  
• CVS - will close dozens of pharmacies inside Target stores.
  
• EV stocks following Tesla lower.
  
• Airlines lower on DAL earnings
  
• ESTC - cut to equal weight at Barclays, price target 110, 2% below spot.
  
• JCI cut to underperform by RBC capital, price target 50, 15% below spot.
  
• SNOW - cut to equal weight from overweight, price target at 198, 2% above spot.
  
• PATH - maintained at equal weight, price target flat to spot.
  
• IFF - raised to buy from hold by Jefferies, price target 40% above spot.
  
• CIEN - raised to outperform by Evercore, from in line. Price target 57
  

• Citi lowers Brent price outlook for 2024 and 2025 due to oversupply fears. Positioning on oil still looks bullish.
  
• China’s Copper concentrate and iron ore imports hit record high in 2023. Same with steel, highest since records began. BOJ is apparently considering lowering their forecasts for growth and inflation, according to BBG. Thats a major blow to rate hike chances.
  
• After the GDP news in UK, UK interest rate swaps pricing in 126bps of rate cuts by the ne dow the year. Was 122 bps yesterday. So more cuts expects, contributing to GDP move lower.
  
• Following the report, Goldman reduces their 2024 GDP growth forecast to 0.5% from 0.6%.
  
• As part of China’s customs report, they said that disruptions in Red Sea may impact trade. Said external demand remains tepid. Said more efforts required to stabilise trade in 2024. Said, however, that 2023 has gone better than expected.
  
• Bank of America, citing EPFR data says that tech has seen the largest inflow in 19 weeks. Bonds also seeing inflows, largest since April.
  
• Yesterday, Fed’s Mester said that March is too early or her for a rate cut, she said she needs to see more evidence. Still, she said policy I sin a good place.
  
• Yesterday, Fed’s Goolsbee says inflation will be primary determinant of when and how much to cut rates. Right now fed is still on golden path, can be derailed he said. Risks to this golden path include higher shelter inflation and potential supply shocks, he said.
  
• Yesterday. Fed’s Barkin said that he is still looking to be convinced that inflation is headed to the target.
  
• Lagarde, yesterday. Said that rate cuts can start again once the data confirms the inflation path is clearly coming down.
  
• European Commission will conduct inspections of Chinese EV makers including BYD, as part of probe into chinese subsidies, which may lead to tariffs.
  
• US and UK conduct precision strikes on Houthi facilities with RAF typhoons.
  
• Shipping stocks are higher in premarket after US and UK strike Houthi targets. Houthis say US British attack will not go without response or punishment.
  
• Pentagon chief has said will target Houthi capabilities including Drones, missiles, radar. Said aim is to deescalate tensions dn restore stability in Red Sea.
  
• Spanish government raises minimum age by 5% this year.
  

stocks

• absoluteunitVolcker

• rockinoutwith2

• LifeInAction

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