▶ 전체 게시글 텍스트
Let’s start with yesterday's inflation report. My main expectations about inflation were accurate headline CPI printed at 0.07% MoM, 3bps above the 0.04% estimate and below the 0.1% consensus and YoY inflation also fell from 3.5% to 3.3%.
Core was the clear miss at 0.22% versus the 0.05% estimate. Medical-care services rose 0.56%, while used cars increased 0.40% despite wholesale data pointing lower. The wholesale to retail lag was the main reason and not taken into account and there is no point in sugarcoating this miss.
The broader report was still relatively dovish though. There is little evidence that the war and oil spike are creating meaningful second-order inflation. AI hardware inflation is showing up, but consumer electronics represent only around 1% of the CPI basket so even large price increases have a limited impact.
The market traded it exactly as expected - lower front-end yields, a weaker dollar and a rebound in high-beta assets like my DRAM swing position.
Base case remains no hike this year I just don't see how higher interest rates are a cure for higher oil prices .
I do some consulting for funds and a lot of fund managers seem to be underperforming the SPY year-to-date. The main problem seems to be the constant rotation which we’ve been seeing. Money keeps rotating from mega-caps into equal-weight, mid-caps and small-caps, but one group is usually being sold to fund the next so the whole market never accelerates together.
This can be seen from the McClellan Summation Index as it has moved mostly sideways since late April even as the indices pushed higher.
https://preview.redd.it/htumexoxh4jh1.png?width=1371&format=png&auto=webp&s=d4b5a9c19705b63ab4fa2cda52ebfa3948830eeb
As we also discussed that CTAs are reportedly sitting on a record short in global bonds, with $300 million of P&L exposure for every 1bp move in the 10-year Treasury yield. UBS estimate I think
If yields start falling, those shorts likely have to be covered, reinforcing the bond rally and pushing yields even lower and that would provide another tailwind for equities especially in high beta stocks.
Market positioning and mm exposure support this and we’ve been seeing U.S. Treasury yields dipp early today and in preparation for the PPI data.
https://preview.redd.it/pnev4dy0i4jh1.png?width=781&format=png&auto=webp&s=5c5f593f66448ce9ffeaafb1d57b12a45b7f2bc9
On a side note, there’s Feds hammock will speak today and she is v hawkish so do not panic if you read a headline from her pushing for rate hikes like this one
https://preview.redd.it/y4eeuhn1i4jh1.png?width=519&format=png&auto=webp&s=55943c121c0d62f8a7481fc6537b2740abdfed7e
Looking at the S&P500 risk appetite and near term market outlook which is an indicator from a monthly survey of nearly 300 institutional investors managing funds in excess of $3,500bn.
https://preview.redd.it/ya6qigf2i4jh1.png?width=1125&format=png&auto=webp&s=b132e0518f9a3777a422b69c913e522e3c85c7db
This supports that it’s likely we see a move higher and the rest of the month could prove to be a chase higher. I have more data in the previous report especially the % of members with inverted 3-month call skew.
Today’s PPI needs to print an in-line +0.2% and +0.3% core PPI which should leave July core PCE close to 0.2%–0.23% and support the September-hold from the Fed.
On to positioning. SPY remains bullish, with options volume building substantially at the $780 and $785 strikes. This increases the chances of a breach of the major $775 level today, which has so far been capping further upside.
https://preview.redd.it/vk27agz4i4jh1.png?width=790&format=png&auto=webp&s=82a368a8a670f6686add9eda74a740ff8065e01a
QQQ positioning also remains very bullish and looks to be coiling for another move higher towards the major $730 level as bullish volumes a re picking up. If that breaks, momentum should start picking up.
https://preview.redd.it/4zvpncn5i4jh1.png?width=493&format=png&auto=webp&s=3f58af117b383f5bcd8de034ef30d0af80eb5ddb
For SOXX, the position is at about 10% profit and would ideally like to see a clean break above $550, particularly after some hedging appeared in today’s high-conviction options flow. If $550 is cleared, attention will likely shift towards $600, where options volume is beginning to build.
https://preview.redd.it/t77u6ji6i4jh1.png?width=745&format=png&auto=webp&s=3315d3e6b4b7bd6aba2b6cef25ead27255471eb9
As for the DRAM position, I am trimming some here after a 10% move in just two days. The target remains $60.
https://preview.redd.it/a80lil87i4jh1.png?width=741&format=png&auto=webp&s=56aecbf0577fa1267669fae8568162d8f88791a4
I also wanted to share our cross-asset stress index, built from 33 separate variables covering liquidity, credit, valuations and broader market conditions. It gives us a much cleaner view of whether stress is actually building beneath the surface
https://preview.redd.it/9goa2ny7i4jh1.png?width=1003&format=png&auto=webp&s=f16e5c216fc6f577e276c3fce1a88b56e9c8dc2d