Macro Economic Data Releases:
Monday
Not much to talk about today.
Tuesday
I’m never focussed much on manufacturing but the service data for Richmond came in nice. Hopefully it stays in positive territory now. Digging deeper we can see there is some issue hiring skilled workers and companies increasing pay, could be an inflationary pressure but insignificant at this point and could still be offset.
Money supply ticked up again. Love it. More liquidity. You can’t hate that.
Wednesday
A bunch of mortgage data that the market isn’t interested in right now and not much else interesting today.
S&P Global was worth a little look but pretty much came in flat across the board and composite PMI is still in expansion.
Thursday
Durable goods had a sharp drop but it’s not panic stations just yet if we look over a 5 year period. Probably don’t want to get a lower read on the next print for this one though.
Jobs data, relatively flat with consensus for the most part.
Advanced PCE prices look good for both measures but Friday is the real one to watch out for.
GDP higher than expected for growth.
So a bit mixed… Strong GP and ok jobs data isn’t great for the cut story but cheaper goods is good for killing inflation.
Friday
Not ideal data here, actually surprised that the market didn’t panic much from it’s first glance… possibly because of the large sell off the prior day. Core PCE price index is higher than expected but the trend is still our friend.
It’s probably a little easier to see in this chart though, clearly showing YoY is looking pretty good and MoM isn’t as bad as it appears.
I don’t think this data knocks out a rate cut in September but it’s certainly something to keep an eye on.
Worrying Data:
We do have some data that is worrying for inflation. Such as Containerized freight still being spicy. As you can see in the charts below, it’s starting to set a worrying trend towards the Covid highs. I would like to see this start to roll over but this is heavily affected by the ever evolving situation in the red sea. With the capacity squeeze still fresh on everyone’s minds, its seem shippers are willing to start scaling up now in preparation for peak season in Q3. up 265% YoY. Price is stabilising but I would prefer to see it come down more. NO major change this week.
The Dollar
Every week we talk about how the market struggles with a strong dollar, especially international and small companies. No major changes to the dollar this week, just grinding along that fresh support level. Would love to see more downside on this.
Oil
Last week we talked about OIL still looking bearish despite the breakout from the wedge. There was a lot of of resistance confluence that made it hard for it to push up. This week it has moved nicely back into its pattern and bouncing nicely on the golden fib. Would love for it to turn this fib line into resistance this coming week.
Commodities
Lithium flat this week, but still a bargain.
Agriculture has been a big driver of inflation, it influences a large part of the chain and it’s always good to see most prices falling. Still some sticking areas and not a great week for cocoa again.
You can check out the rest of the commodities here.
CME Interest Rate Probabilities
Not much chance of a cut in July as this has increased by a nice wedge, but September looks good, but it has come down a few % this week. Market shouldn’t throw it’s dummy out of the pram if we don’t cut at the next meeting. You can check the live data here.
Truflation
My go to source as a live indicator for inflation data. The government data is very lagging in nature and often off the mark when it comes to honest reporting. I have a post here that explains more about why I like this tool.
The rate fell off a cliff this week. Food/beverages and housing had large drops and they are 38.5% of the weighting for this metric.
Fear and Greed Index
Primary index’s flopping around their all time highs and so is my portfolio. Yet we are tracking perfect neutral on this index.
Put and call options have swung to fear and momentum also fell to neutral. So we’ve got some nerves kicking in here.
Crypto Fear and Greed Index
The gauge is slowly creeping up, but not euphoric yet, by a long shot.
Other News and Data:
Gold Crazy
Hedge funds ramping up for something here? Or are they going to be wrong like they were when they shorted the market last year? Feels like everyone and their dog is talking about gold lately… Not my cuppa tea.
Small Caps holding their own
It’s not easy to see in the chart below, but small caps actually did better than the spy this week. Love it and I’m ready for this rotation to play out. I have been waiting for this move to start for over a year and hopefully it’s not a fakeout this time. FYI, it also out performed the Nasdaq.
I’m getting a feeling that the time is getting close now to start scaling into more property related stocks and TMF alongside TNA and more risk on stocks I like… which is most of my current holdings! I’ll be doing that over the coming weeks and hopefully earnings this week gives us some pops so we can rotate some dollars. Thursday is also account deposit day.
The Russell 2000 was up more than 10% in 10 days. 86% of the time that happens, results in a further 27% gain in the following year. An interesting but useless nugget of information for you there.
Just look at that expected EPS launch. Smalls are about to get some serious tail winds and I can’t understate how good rate cuts will be for these companies. Not only will debt become more manageable but moving the economy to an expansionary stance will do wonders to get EPS taking off again as people get back to spending. This will enable companies to increase spend on growth, hiring, refinancing/clearing debt, and we all know the market is a forward looking mechanism…People will want to start front running that potential move. The entire index will do well, but particular companies will do exceedingly well.
Mostly I don’t have time to go through a bunch of small caps with patchy data so I’m mainly sticking with TNA as a leveraged play and ARKG. But broadly speaking FinTech’s and real estate will do well when this happens. I would probably not like to be holding mega caps at this stage in the cycle as their upside potential has largely been realized over the past year… Tesla being the outlier there.
A few more nuggets i stole from Marau2021 on Etoro, maybe I should start sourcing from him full time!!
The last week in data, events and so on –
- Money market funds saw a significant outflow of $40 billion over the past week, likely attributed to the higher probabilities of a rate cut, funds are moving out of cash equivalent investments – But where will it be spent?
- Market odds on a Trump victory remain in his favour, but have slimmed after some recent events
- The upcoming week is arguably the most important week in this Quarter, with 34% of the $SPX500 due to report earnings, including most of the highest weightings and tech behemoths.
Just to make it more fun, we also have some key data this week and FOMC.
- The S&P493 is expected to exit an earnings recession this Quarter, and expected to be the first EPS growth quarter this year.
New Website Content and Updates
- End Of Week Macro Economic and News Wrap Up 26/07/2024
- Chart Updates for Top Stocks in My Portfolio 26/07/2024
- Portfolio tracker updated
- Tesla Earnings update – Still working on it
- Added a zoom feature to all future images with small print for easier viewing.
- Started doing daily content videos in short form for YouTube.
Apologies for being slow with news etc this week. My regular job had drama with the Crowd strike fall out and my wife just cut a day at work so we can do a nice date day instead. Also my football team now trains twice a week so I’m a busy bee. Normal service will resume this week.
Pre-warning – I do have another holiday coming up soon, for a week. I’m debating if I will take my laptop or not.
YouTube and the Delay getting data out
I’ve been listening to what you have had to say about my videos and have implemented a few of your suggestions this week. You will find the current format below:
Monday: Macro update and Chart update videos will be posted Monday at 3:15pm on a schedule.
The rest of the week I will set aside time to put up a short clip looking at the charts for 1 of my core stocks and then take a look at their short timeframe open options interest. These will also be posted at 3:15 on a schedule.
Tuesday: Tesla
Wednesday: SoFi
Thursday: PayPal
Friday: CleanSpark and Bitcoin
I still have a life and may not always be on time. I do all this for free, so please bear that in mind before getting to upset about any delays.
