Financial News vs. Noise
In the news:
Tech Giants Drive Stock Rebound-WSJ
“A hotter than expected [CPI] number will be a very bad day for the bulls” because it could cause investors to question the outlook for rate cuts, said Matthew Tuttle, chief executive of Tuttle Capital Management.
Waking up to red this morning, my sense is we get no real traction one way or the other until CPI. Luckily I got this sense yesterday and closed out most of my longs. Being a dip buyer I wouldn’t be surprised to add back a bunch today depending on how things play out.
Another Fed head talking about easing of financial conditions, this time Bowman:
There is also the risk that the recent easing in financial conditions encourages a reacceleration of growth, stalling the progress in lowering inflation, or even causing inflation to reaccelerate. Finally, there is a risk that continued labor market tightness could lead to persistently high core services inflation. While I do not tend to take too much signal from one report, last Friday's employment report showed continued strength in job gains and wage growth, and the labor force participation rate declined.
I remain willing to raise the federal funds rate further at a future meeting should the incoming data indicate that progress on inflation has stalled or reversed.
Meanwhile, this is one of the reasons I don’t believe in a soft landing. I think consumers are stretched to the breaking point.
We, and many others, were wondering how it was possible that US consumers - already tapped out beyond a breaking point, with collapsing savings and declining real wages - were able to push holiday spending which started in November and continued until the end of the year - to record nominal highs. Now we know: according to the latest monthly consumer credit report from the Fed, in November, consumer credit exploded higher by $24.75BN, blowing away expectations of a "modest" $9BN increase after the surprisingly subdued $5.8BN (upward revised from $.5.1BN) in October and the $4.3BN average of the past 6 months. This was the biggest monthly increase since last November, and was the first $20BN+ print since Jan 2023.
Top watches for me today, in no particular order:
-Gold and silver miners. Would like to see gold miners find some support areas and in silver, AG and PAAS are both holding support.
- Industrial metals. Adding AA yesterday on weakness, would like to see it hold the 200 day.
Would like to see TECK reclaim.
-MOS and/or CF look interesting in fertilizers. Kind of mad I missed those dips yesterday TBH.
-Will be looking for possible dip buys in the Magnificent 7. Yesterday I showed the AMZN chart as a two directional play. It had an undercut and rally at the 50 day and is now bumping up against the 20 EMA. Would love to see it drop back to the 50 so I can buy it again.
-China is weak again this morning, what’s new. NIO looks like the most interesting name at the moment.
Good. I have CVE and will be looking around for other names today. Energy Stocks Get Snubbed by Fund Managers. Being Unpopular Isn’t Always Bad.-Barron’s
I love “bucking the trend toward passive investing”. Which really means higher fees for probably lower performance. Way harder for brokers to make money on low cost ETFs. Brokerage Firms Are Pitching Separately Managed Accounts. Here’s What to Know. These personalized portfolios are increasingly being marketed to investors for their tax flexibility and upside potential. But beware of costs.-WSJ
Individual investors looking to personalize their portfolios are pouring billions of dollars into “separately managed accounts,” bucking the trend toward passive investing in mutual funds and exchange-traded funds in favor of active, individualized money management.
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Matthew Tuttle is the Chief Executive Officer and Chief Investment Officer of Tuttle Capital Management, LLC.
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