Financial News vs. Noise
Coming into Friday’s jobs number I felt that the risk was to the downside. The jobs number came out hotter than expected and the market sold off a bit. However, we then got a U Mich survey, which I typically don’t pay much attention to, that showed inflation expectations at 3.1% vs 4.5% expected. Not sure that means much intermediate term, but it meant a lot to the market as it turned red to green.
Interestingly, interest rates were up on what looks to be better than expected news on inflation. Do the bond traders know something that the stock traders don’t? Precious metals got crushed, probably because of higher rates and a higher Dollar. VIX also got crushed. If I read my monthly chart right, we are now at the lowest VIX since 2019. The interest rate cut odds also changed. March dropped from 60% to 44.5%.
I still believe we rally into year end, so will still look to buy Magnificent 7 and friends at support. Currently the least extended are AMZN, MSFT, TSLA, NVDA, and ADBE.
Oil prices rose on Friday and I think we are going to have a spot to go long oil names and short airlines. I added to ET in MLPs but am eyeing a bunch of others. I think AAL and LUV look like the most vulnerable airlines. Oil is red again this morning.
I will continue to watch the precious metals space for any signs of support. I did buy some GLD on Friday. It is in the red so far this morning so will need to decide whether to add more, get out, or do nothing.
If the bond traders know something the stock guys don’t, then TLT could be setting up as a short here. It bumped up against it’s 200 day on Wednesday and Thursday, and then failed completely on Friday.
Bitcoin took a hit overnight so will be watching it and the miners for potential long entries.
Might be getting interested in China names again, BIDU looks the most interesting at the moment. China is in the red again this morning.
Not a lot going on in the high short interest names, though AI did recover a lot of it’s earnings losses.
While I do feel that we rally into year end ,we have CPI ,PPI and FOMC this week, so I want hedges. I got out of the last of my UVXY puts on Friday and added to VIX calls. Volatility tends to be mean reverting and the time to go long as when nobody wants to. My sense is that we don’t do much ahead of all the data and that we need some sort of red to see more green.
Subscribe to our other newsletters
Laffer Tengler Research Bulletin
News vs. Noise
But the VIX also tends to be mean reverting. The VIX says stocks are ‘reliably in a bull market’ heading into 2024. Here’s how to read it.-MarketWatch
Again, this will be the great debate in 2024. Higher Interest Rates Are Here to Stay. What It Means for the Economy.-Barron’s
Expectations for the long-term trajectory of interest rates lie at the heart of a debate over the so-called neutral rate, or the interest rate at which the economy is in equilibrium, with monetary policy neither too tight nor too loose. A growing chorus of economists argues that structural shifts in the economy that were either introduced during or exacerbated by the Covid pandemic are pushing the neutral rate higher than it has been in decades.
This week’s Fed meeting could slam brakes on year-end stock rally-MarketWatch
Matthew Tuttle is the Chief Executive Officer and Chief Investment Officer of Tuttle Capital Management, LLC.
At Tuttle Capital Management (“TCM”), we want to help educate investors about different ways to allocate and manage assets. TCM strives to create innovative portfolio management tools coupled with investment strategies designed to help mitigate risks and potentially enhance returns.
The views and opinions expressed herein are those of the Chief Executive Officer and Portfolio Manager for Tuttle Capital Management (TCM) and are subject to change without notice. The data and information provided is derived from sources deemed to be reliable but we cannot guarantee its accuracy. Investing in securities is subject to risk including the possible loss of principal. Trade notifications are for informational purposes only. TCM offers fully transparent ETFs and provides trade information for all actively managed ETFs. TCM's statements are not an endorsement of any company or a recommendation to buy, sell or hold any security. Trade notification files are not provided until full trade execution at the end of a trading day. The time stamp of the email is the time of file upload and not necessarily the exact time of the trades.
Tuttle Capital Management is not a commodity trading advisor and content provided regarding commodity interests is for informational purposes only and should not be construed as a recommendation. Investment recommendations for any securities or product may be made only after a comprehensive suitability review of the investor’s financial situation.
© 2023 Tuttle Capital Management LLC (TCM). TCM is a SEC-Registered Investment Adviser. All rights reserved.
