Hey it’s Kieran! Lots going on behind the scenes here and lots going on in the markets, so let’s get fired up for another week! For those that replied to my position for a Full Stack Developer, it was nice to speak with you. If you have developer skills (Django, React, AWS) and want to break into this industry, you can still get in touch and let’s have a chat. With that said, let’s get started!
Weekly Watchlist
It’s set to be an action-packed week in the markets with the Fed’s first meeting of the year on Wednesday, a flurry of big tech earnings including Microsoft, Google, Apple and Amazon, as well as the latest US Non Farm Payrolls report out on Friday.
The economic calendar also includes data on JOLTS job openings and consumer confidence on Tuesday, followed a day later by a report on private sector payrolls and weekly data on initial jobless claims on Thursday.
The Macro View
All quiet on the positioning front. The Goldman Sach’s positioning indicator is totally in “no man’s land” and does not at all signal a top.
BofA “Bull & Bear” indicator’s Sentiment reading is also in the middle. No signal.
Chinese equities are coming back to life. Last week saw the largest buying in 5 years. From Goldman Sachs “In cumulative notional terms, the net buying in Chinese equities from January 23rd to January 25th is larger than any trailing 3-day period in more than five years …”
Chinese Stocks lowest positioning in 5 years. Goldman Sachs “Overall positioning in Chinese equities remains at very low levels across both hedge funds and mutual funds (around 5-year lows on the Prime book).”
US v Chinese equities reversal pairs trade anyone? US versus Chinese equities — two diverging narratives with massive potential. Nice chart from Tavi Costa.
Fed meeting this week and interest rates back in focus. It was the mother of all trend breaks. Now what? US 10-year Treasury bond yield (log scale, monthly).
The financial markets continue their disconnect from the real economy.
Layoffs announced over last 3 months
1. Twitch: 35% of workforce
2. Hasbro: 20% of workforce
3. Spotify: 17% of workforce
4. Levi’s: 15% of workforce
5. Xerox: 15% of workforce
6. Qualtrics: 14% of workforce
7. Wayfair: 13% of workforce
8. Duolingo: 10% of workforce
9. Washington Post: 10% of workforce
When will we reach the tipping point?
I hope you found this interesting and useful. As ever, keep your risk management top of mind, trade safe, and stay nimble out there.
Have a good week!
Kieran
www.traderseed.io
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