The FED will pivot, China's Impact on inflation, & Oil Production (01-09 to 01-10) (Free)
In this week we will be looking at 4 separate sources for our macro recap.
We strive to incorporate as many independent views into this newsletter. We want to identify & synthesis this data for our audience, allowing you to get an understanding from a high level what is happening, then be able to quickly dig into the details of the newsletters linked below.
Let's Dive In!
Newsletter: The Informationist Newsletter
Title: The Signal - January 9.
Link: https://jameslavish.substack.com/p/the-signal-january-9
Here are the top takeaways:
The Fed is planning to keep raising interest rates to stop inflation from getting worse. 25bps Jan 31st. 25 bps Mar 21st.
However, there is evidence that the economy may be weakening, which could make the Fed reconsider its plan.
Fed Funds Rate at 5% will be the terminal rate, where rates will stop going higher.
The ISM numbers came in. Services dropped 6.9 points to 49.6. Under 50 means there has been a contraction.
Services contracting is significant due to the shift that occurred after covid restrictions ended. The economy went from demand of goods to demand of services.
Investors should be cautious and consider holding cash or investing in safe haven assets.
Newsletter: The Trader's Brief
Title: The Weekly Beat: 9 January 2023.
Link:
Here are the top takeaways:
The US yield curve declined last week after economic data was released, with expectations of one more interest rate hike.
The Federal Reserve will have a challenge in sounding confident about the future without signaling more rate hikes.
If the Fed tightens policy and causes inflation expectations to fall, they will have a difficult decision to make.
Once the terminal rate is known with more certainty, markets will likely take off.
Gold prices are preparing to make a very bullish move.
The Bank of Japan will continue to manipulate Japan's yield curve.
YouTube Channel: Wall St For Main St
Title: Jim Rogers: China Re-Opening Will Cause A Commodities Rally With Increasing Demand?
Link:
Here are the top takeaways:
Concern is rising about the inflationary problems that may arise from China's economic recovery.
He believes that the inflation problem is not yet over, and that it will eventually get very bad before it gets better.
While the US is currently the largest debtor nation in the world, it cannot afford to default on its debt. The government will try to inflate its way out of the problem by printing more money.
However, this is not a sustainable solution and eventually the market will catch on and trouble will ensue.
Jim Rogers, another industry analyst, believes that the current commodity bull market is not over and people should still invest in commodities as an asset class.
Newsletter: HFI Research
Title: Natural Gas Continues To Get Pummeled As The Weather Outlook Offers No Relief.
Link:
Here are the top takeaways:
Natural gas prices have been falling due to increased production and bearish weather conditions.
US shale oil production is increasing the amount of natural gas being produced, exacerbating the situation.
By the end of the year, Lower 48 gas production is expected to reach 104-105 Bcf/d, but there will be limited pipeline capacity for some regions.
The Freeport LNG facility has been down since June, adding 400 Bcf of gas to storage.
Weather conditions are the main contributor to why we are seeing storage draws being so muted.
The weather outlook is not exactly improving for the moment, with heating degree days forecasted to come in well below the 30-year average.
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