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#Stocks –
#Macro – $SPX, $NDX, #FED, #BOJ, #RATES
Mike’s Reading The Markets Macro Subscription Service on Seeking Alpha
- RTM: The Market Tides May Be Turning
- Has The Inflation Narrative Shifted?
- RTM: BOJ AND INFLATION IN FOCUS
- RTM: Tomorrow’s CPI Report Seems Big For The Hawks
- Nvidia Collapsing Under Its Own Weight
- RTM: The End Of The Liquidity Train?
Stocks rallied on Monday, ahead of an eventful two days. The BOJ policy announcement is expected on March 19, which falls in the late evening of March 18 in the US. Rumors are circulating that the BOJ will look to end yield curve control and ETF purchases. The market is placing the odds of a rate at just 46%.
Meanwhile, the market is also busy repricing its rate path for the Fed policy, with Fed Futures now seeing fewer than three rate cuts in 2024.
This appears to be due to a change in the market outlook for inflation, with 1-year inflation breakevens now at their highest since July 2022 and 1-year inflation swaps continuing to move higher today by 1.1 bps to 2.635%.
It looks mainly like this results from gasoline pushing higher again to $2.74.
As well as oil moving up and clearing that consolidation zone at around $82.
Surprisingly, the US 10-year yield has behaved nicely, still below the 4.35% level. If the yield curve control in Japan ends, and BOJ allows rates to JGBs to move higher, then it could push rates higher here in the US as the world loses that global rates anchor.
Remember that what matters most about the Fed and rates is that the market is repricing the path of monetary policy, and monetary policy works through financial conditions. As the market reprices and adjusts, those conditions will tigthen, and the tightening of conditions will impact the stock market.
-Mike
Charts used with the permission of Bloomberg Finance L.P. This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.