🪃 We are so back (to 5,000)

🚬 But what's the Fed smoking?

Author

Wyatt from Alts
February 15, 2024

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📰 Market Headlines

*past 24-hour performance

  • We are so back to 5,000 on the S&P 500. Solid earnings reports and calming nerves pushed up every major index.

    • "Let's not get amped up when you get one month of CPI that was higher than what you expected it to be. It is totally clear that inflation is coming down." - Chicago Fed President Austan Goolsbee

    • "Market overreacted to the CPI report. [...] monetary policy is not set to analyst expectations. Nothing in the report indicates anything other than a continued trend towards lower inflation" - Former Boston Fed President Eric Rosengren

     

  • Nvidia dethroned Alphabet, becoming Wall Street's third most valuable company at $1.825 trillion.

  • Eight children were wounded, and a mother of two was killed in a mass shooting at the Chiefs’ victory parade.

🕶️ Market Vibes

The language above from the Fed is strange.

It was clearly meant to ease the markets (and they did pump yesterday).

But CPI clearly isn't coming down at the rate the Fed wants it to.

It's observably stalled over the last six or seven months, and it's not going to shift downward until a big catalyst* hits.

*Probably bankruptcies and foreclosures centered around younger and poorer consumers, leading to a deterioration in spending and the jobs market.

🎰 Market Forecasts and Futures

The likelihood of a rate cut in March is now microscopic, according to Kalshi, though traders are still pricing in an 8.5% chance.

So let’s push out to May, where traders are saying there’s a 36% chance now vs 33% at Kalshi.

😱 Fear and Greed Index

🧠 What do you think?

This newsletter has correctly called both the January Jobs and CPI prints and gave you the playbook to cash in via Kalshi. I hope you’ve made some money!

💵 Have you taken advantage of the free money on Kalshi?

(Remember, you get $25 free)

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📈 Trends you need to know

Search results are from our friends at Glimpse, my favorite way to spot trends.

Pharma Bees refers to the Nippon India Nifty Pharma ETF, a stock exchange-traded fund that tracks the NIFTY Pharma Index.

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Winners and losers

Earnings, upgrades, and acquisitions

  • Cisco beat earnings and revenue expectations but slashed guidance. Shares fell 5%.

  • Lyft whiplashed 62% up after a typo in its earnings report before settling down to a 37% gain.

  • Renesas Electronics acquired software firm Altium for $5.9 billion; Altium shares popped nearly 30%.

  • HubSpot exceeded Q4 earnings and revenue expectations; shares jumped 6%.

  • Instacart dropped 1.8% after Q4 earnings revealed a growth slowdown.

  • Informatica reported strong Q4 earnings from its cloud data management software. It issued positive guidance, and the stock soared 18%.

Market movers

  • New York City sued Meta, Snap, ByteDance, and Google, accusing them of designing addictive platforms that harm kids' mental health.

  • Lockheed Martin fell 2.3% after the Biden administration cut F-35 orders by 18%, a $1.6 billion reduction.

  • Uber launched a $7 billion share repurchase program, forecasting significant growth in bookings and EBITDA.

  • Google and Microsoft are "dogfooding" AI at a massive scale, testing their tools internally.

  • SpaceX moved to Texas, following Tesla and Neuralink.

  • Jeff Bezos sold $4 billion in Amazon shares in prep for his move to Florida.

Ideas, trends, and analysis

🌍 Global Perspectives

  • 🇯🇵 Japan entered a recession. GDP fell 0.4% in Q4 due to weak domestic demand.

  • 🇬🇧 The UK fell into recession last quarter too.

  • 🇺🇸🇷🇺 The U.S. warned allies about new Russian space-based nuclear capabilities.

  • 🇨🇳 🇦🇫 China recognized a Taliban envoy, marking a diplomatic win for the group amid its international isolation.

  • 🇧🇷🇷🇺🇮🇳🇨🇳🇿🇦 The BRICS nations should see an 85% surge in their millionaire population over the next decade, surpassing G7 growth.

  • 🇺🇦 Ukraine sank the Russian warship Tsezar Kunikov in the Black Sea using naval drones.

📊 Income

📊 Crypto

  • Bitcoin's market cap blasted past $1 trillion today. All crypto together is up to $2 trillion.

  • SEC Chair Gary Gensler said court cases drove Bitcoin ETF approval and Ethereum ETFs are no guarantee.

  • Coinbase's shares jumped 37% in the past week ahead of its Q4 earnings today. Analysts predict a 22% revenue increase.

🧠 Errata

📺 What to Watch Today

That’s all for today. Did I miss anything? Smash the reply button to let me know.

Cheers,

Wyatt