Don't be Fooled | Macro Update

The Good News | Fundamentals

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

AI, Automation is Deflationary

​

ALL EYES ON WEDNESDAY

Unsurprisingly, the Headline is Do for a Pop From Oil Prices.

​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