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Great Assets Repricing

September 21, 2023 (Investorideas.com Newswire) S&P 500 buyers didn't grasp at dovish overinterpretation of Powell even for a while, and 10y yield decisively breaking above 4.40% cements the asset repricing story as risk-free rate of return is moving higher.

Please pay attention to this 7-part tweet series summarizing what happened, why and what it means going forward, quoting my tweets verbatim:

1) #Fed convinced markets of being hawkish (in projections):
- smartly dancing around #recession vs. soft landing through widening outcomes
- upping #GDP growth through 2024
- erased two unrealistic 2024 rate cut
- 2% #CPI vision to 2026
Some of it is as contradictory as

2) NY Fed and $GS recession probability model.
#Fed thinks #jobmarket and general #economy strength allows for higher for even longer.
Would #unemployment really stop at 4.1%? I'm a bit skeptical but would watch participation rate, hours worked, nominal wages etc.

3) Other #inflation aspects such as crude #oil (unbroken, not crashing first as in sharp deleveraging a la J-F 2020) or $HYG (HYG:TLT) don't point to a definitive game changer via #FOMC.
Headline vs. core #inflation thus not addressed duly - US won't get infl stats similar to EU

4) It was sharp in market effect, but the tougher the first key player - #Fed - gets, the less room for the others - #ECB #BoJ #BoE - to pull off anything similar.
Yes, global #liquidity has turned south a while ago again - see intl trade for signs of nearing #recession 1H 2024.

5) Immediate aftermath net effect of the forward guidance on the markets:
- fine retracements of #yields #USD increases dialed back
- 10y pause around 4.30% not on the table
- #USD to keep rising with greater ease than long end of the curve
- hammering #stocks, reversing #gold

6) What's been left unsaid, is what I view actually as more probable than those growth upgrades while introducing recession possibility...
#stagflation 2024

7) The non-pause of 10y #yield also has the effect of taking the risk-free (natural in economic parlance) rate of return higher.
This conclusive break of 4.34% without prior retreat to 4.20s% has profound effects on both risk assets and future cash flow discounting
Bearish!
#ES

I'll cover more in individual market sections and chiefly in real time on both Telegram channels and on Twitter - as the 10y yield approach to 4.50% proceeds. Intraday Signals subscribers have opportunitistic short gain of at least +19 pts locked in, and more would be a pleasant surprise (for you my dear premium subscribers, it's it's only a $20 upgrade via Patreon, and not the full $49 price).

Keep enjoying the lively Twitter feed via keeping my tab open at all times (notifications on aren't enough) - combine with subscribing to my Youtube channel, and of course Telegram that always delivers my extra intraday calls (head off to Twitter to talk to me there), but getting the key daily analytics right into your mailbox is the bedrock.
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Let's move right into the charts (all courtesy of www.stockcharts.com) - today's full scale article contains 1 of them.

S&P 500 and Nasdaq Outlook

4,482 held only till the conference started, and now we're dealing with the question whether stocks close today below 4,432 or not. I think they would - I'm not looking for stark IWM outperformance that would pave the way. Yields on the long end are to keep grinding higher, affecting pretty much everything else, tech foremost. 4,385 though seems closer as more realization about squeezed profit estimates seeps into stock prices, affecting multiples too - I'll be covering chiefly on Intraday Signals Telegram, and then some on Twitter of course.

Thank you,

Monica Kingsley
Stock Trading Signals
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www.monicakingsley.co
mk@monicakingsley.co

All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice.

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Thank you,

Monica Kingsley
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Bitcoin Trading Signals
www.monicakingsley.co
mk@monicakingsley.co

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