71 replies to this topic

[redfoliage2]

Well, now it looks insiders knew the CPI data to be released tomorrow better than feard as the 10Y yield started dropping in the afternoon ..........................

Edited by redfoliage2, 11 February 2025 - 01:58 PM.

[redfoliage2]

So, USD finally reversed its bullish trend as well.  Both USD and 10Y yield have been making lower highs on their daily charts.  Something must be going on with the new controllers ..........................

Edited by redfoliage2, 11 February 2025 - 02:59 PM.

[redfoliage2]

However, it could be due to the case that hedgies are shorting USD as a hedge for their short positions on stocks/ indices as hedgies recently are active in shorting the US stock market, especially at night time ............................

Edited by redfoliage2, 11 February 2025 - 03:18 PM.

[dTraderB]

Going NET FLAT to SMALL LONG above ES 6090

[dTraderB]

Hate these reports that interrupt the normal methodical trading. Flat to long before CPI report with buy & sell limit orders below & above market. BUY DIPS, SELL SPIKES to take profits.
I think the CPI report will be regarded as BEARISH

[dTraderB]

AI bubble entering dangerous level zone. They git to start delivering or else a DOTCOM-like crash soon:
"Need to Know: Tech crash, Powell firing, bond turmoil these are one firms possible, if unlikely, gray swans

Also known as gray swans, strategists at BNP Paribas, took a look at possible extreme scenarios investors should consider for 2025. Our call of the day focuses on how the three biggest might materialize and what investors should do.

U.S. technology stock crash. The Magnificent 7 tech stocks now make up 33% of the S&P 500 SPX by market cap, and with valuations already high, a return to the long-term price/earnings average alone would mean a 30% selloff, says a team of strategists led by Viktor Hjort.


 
We think disappointments in GenAI monetization, efficiency improvements or a top line slowdown could trigger a selloff in U.S. equities. Our economics teams simulations suggest that a large equity correction, via the wealth effect, could spark a recession in the U.S., says Hjort and his colleagues.


Fed Chair Jerome Powell gets fired. Lets say the Fed fails to deliver big rate cuts demanded by President Trump amid a large stock selloff or jobs slowdown and Powell is out. BNP offers one scenario putting a Trump appointee at the top of the central bank and all Democratic-appointed governors rapidly replaced.

Despite the Feds operational independence over monetary policy, BNP points to a recent event. In early January, Trump fired a member of the National Labor Relations Board, which has similar protections to the Federal Reserve against removals. That official, Gwynne Wilcox, has said she might try to get the courts to reinstate her, which could set up a Supreme Court case to clarify whether Trump can fire officials in other agencies, such as the Fed, says BNP.

A trigger for this gray swan is tariff and immigration policies sparking higher inflation, forcing Fed rate hikes. That in turn could cause Trump to fret about the effect of lower stock prices and slowing growth on midterm elections for Republicans.

Where to hide? Damaged confidence over the Feds independence would see a pivot away from the U.S. dollar as the global reserve currency, and with that, large-scale U.S. asset sales, says BNP. The Japanese yen USDJPY could emerge as a haven. But appointing a more dovish Fed chair would cause a steepening of the yield curve longer-term yields rising faster than shorter ones on expectations of a less restrictive Fed.

A Liz Truss moment for U.S. Treasurys. The third gray swan harks back to 2022, when the former U.K. prime ministers short tenure caused surging U.K. government bond yields and financial markets chaos.

Possible investor doubts over the U.S.s fiscal sustainability could spark an unbounded rise in Treasury yields similar to that Truss crisis and with even worse consequences, the strategists warn. Poor U.S. fiscal discipline and rising issuance would cause bond vigilantes to sell Treasurys, driving yields higher, possibly during the third quarter of this year. If inflation hasnt progressed toward the 2% target, the Fed may not step in to control yields, with the 10-year possibly breaching 5% and heading to 6%.

Persistently higher Treasury yields could also hurt the valuation of risk assets, particularly U.S. equities (which currently enjoy historically elevated valuations) while also hurting growth as broad financial conditions tighten, said BNP. And of course, Treasurys risk-free status could get damaged.

The dollar could emerge stronger from such a crisis, but complicating matters for stocks are historically high stock valuations.

Gray swans, the strategists add, arent always negative. Other gray swans they identify include OPEC+ unity dissolving, the eurozone economy growing faster than 2% this year, a bull market emerging in Brazil, a flow-driven boom in Chinese stocks, commercial real estate loans driving up bank non-performing loans, a default cycle in private debt, and an AI productivity boom in the U.S. economy.
https://trkmw.dowjon...c.1bmn/aa869145

[dTraderB]

Economists expect headline consumer prices, due at 8:30 a.m., to hold steady at a 2.9% rise for January, ticking up 0.3% monthly. Excluding food and energy, core CPI is seen rising an unchanged 3.2%.

Powells second day of Capitol Hill testimony begins at 10 a.m. Well also hear from Atlanta Fed Pres. Raphael Bostic and New York Fed Pres. John Williams.

Read: Forget CPI. This market indicator says inflation may stay above 2% for years.

[dTraderB]

Key developments that should provide more direction to U.S. markets later on Wednesday:
US January consumer price inflation report
Federal Reserve Chair Jerome Powell's reprises semiannual monetary policy testimony before House Financial Services Committee. Fed Board Governor Christopher Waller and Atlanta Fed President Raphael Bostic both speak. Bank of England policymaker Megan Greene speaks
India's Prime Minister Narendra Modi meets U.S. President Donald Trump in Washington
Canada's Prime Minister Justin Trudeau meets EU Commission President Ursula von der Leyen and European Council President Antonio Costa in Brussels
US corporate earnings: Cisco, Kraft Heinz, Albemarle, Paycom, Biogen, CME, CVS, MGM, Dominion, Equinix, Interpublic, NiSource, Rollins, Smurfit WestRock, Tyler, Ventas, Westinghouse etc
U.S. Treasury sells $42 billion of 10-year notes

[dTraderB]

WILL ADD IBIT CALLS BELOW 53.5

[dTraderB]

Will go longer by closing es, nq, ym shorts on any dip below es 6060. Will open new qqq, spy, ym put positions above ES 6105