The Good News | Fundamentals
S&P Companies citing recession on Earnings calls have declined for 4 Quarters...stocks lead the Economy
S&P Earnings Estimates bottomed Over the Past 2 Months...stocks lead the economy
Analysts are raising Quarterly estimates for the first time in 2-years
Q3 2023 Earnings (YoY) are expected to be positive for the first time since Q3 of 2022
Investors are Bullish, and ETF Liquidity Inflows are increasing!
Inflation
There's Really No Reason for the Fed to Hike in September, which is very constructive for the stockmarket , we know rates are in restrictive territory,Core + Super Core inflation is Falling, while fundamentals are improving.
- NY Fed Average CPI next 4-Quarters
- The Fed is forecasting CORE CPI to drop , This is what the Fed is focused "Ex- energy Ex Food"
- New and Used Vehicle inflation is falling, and used vehicle prices are actually falling.
Single Family Home & Rent Inflation are falling. ( record supply of Multi-family - expect rent to keep falling)
Housing & Car's are 57% of CPI
SUPER CORE is Inflation is Falling
NO WAGE INFLATION
AI, Automation is Deflationary
ALL EYES ON WEDNESDAY
Unsurprisingly, the Headline is Do for a Pop From Oil Prices.
Policy | Global Easing
The % of Central Banks whose last move was a rate Hike is falling
The % of Central Banks whose last move was a rate cut is rising
The money Supply From the 4 Major Central Banks is accelerating.
Economic Activity | Bottomed
Economic Activity From the Services and Manufacturing Sectors are pointing higher. (Expansion by November)
Jobless Claims are rolling over, people are finding jobs.
The Bad News | Consumer Balance Sheets
- Less Savings, More Debt
Debt Rises + Student Loans come Back online.
- More S&P companies are reporting Neg than Pos Q3 Guidance.
- Oil Could Push Yields Higher
- Yields Could Push the Dollar Higher
WAIT A MINUTE...
- Treasury Issuance is slowing on the Long End
- RRP Liquidity can suck up Short Treasuries
Q4 Fiscal Liquidity
RRP- Liquidity
Playbook
- Pricing Power
- Margins
- Revenue Growth
- Balance Sheet
- Network effect
Efficiency
A very low avg-stock to S&P coorealtion = Stock Pickers Market