The Weekly Lens aims to give you a concise sense of MI2 internal discussion over the past week. It reflects what we have been reading and discussing, and how those discussions are influencing our view of the macro environment. The aim is to give you some idea of how our thinking is evolving.
For the last few months, the Trump Administration and its supporters within the FOMC have relentlessly argued that the absence of tariff-induced inflation shows that the Fed is behind the curve. Together with a stagnant labour market, this has created a narrative that has drowned out opposing views and driven frenzied rate cut speculation. However, while we acknowledge US economic fragility, several Fed officials seem to share our unwillingness to fully embrace this singular focus on one side of the mandate, despite what’s priced into the curve. Yes, perceptions of how the labour market is doing have shifted dramatically after last month’s weak NFP, but reduced labour supply is also an important consideration. The good news is that with the topic of the Jackson Hole gathering, “Labor Markets in Transition”, investors will soon get a much clearer understanding of Fed thinking on this issue. More importantly, Powell has the opportunity to make a “last stand” against the President, not far from Little Bighorn. Will he take it?
The Weekly Lens aims to give you a concise sense of MI2 internal discussion over the past week. It reflects what we have been reading and discussing, and how those discussions are influencing our view of the macro environment. The aim is to give you some idea of how our thinking is evolving.
A few weeks ago, we sent you a piece outlining that after a clean sell signal in the equally weighted S&P (SPW) in May (5- and 20-week moving averages break below the 50-week), the subsequent recovery of the market left us at a critical decision point.
The Weekly Lens aims to give you a concise sense of MI2 internal discussion over the past week. It reflects what we have been reading and discussing, and how those discussions are influencing our view of the macro environment. The aim is to give you some idea of how our thinking is evolving.
The massive downward revision to the prior headline numbers was a shock. But should rate markets have moved to price in so many rate cuts? Yes, the labour demand looks precarious, but so far, there have been limited layoffs and labour supply is also problematic. With so much priced into SFRH6, there is a case for cheap puts.
The Weekly Lens aims to give you a concise sense of MI2 internal discussion over the past week. It reflects what we have been reading and discussing, and how those discussions are influencing our view of the macro environment. The aim is to give you some idea of how our thinking is evolving. This week, the discussion centred around the risks associated with the combination of seasonal illiquidity, and one-sided positioning and complacent markets.
We understand that after an exhausting start to the year, all you want to do is switch off and head to the beach. However, before you down tools, we would like to suggest that you take a closer look at your risk, because markets are coiled, and we have rarely seen a calendar packed with so many potential catalysts. Thin markets and this set up increases the risks of sharp price moves.
The Weekly Lens aims to give you a concise sense of MI2 internal discussion over the past week. It reflects what we have been reading and discussing, and how those discussions are influencing our view of the macro environment. The aim is to give you some idea of how our thinking is evolving. This week, we touched on the similarities of the Nvidia bubble with the Cisco bubble back around the time of the Dot.com crash.