LIQUIDITY MATTERS... From QE (Quantitative Easing) to QT (Quantitative Tightening) to QB (Quantitative Balancing) to QE Light
Some interesting views by Andreas Steno Larsen (Steno Research / Macrobond): 2024 Q1 -> While we are celebrating our inflation-progress, Powell and Yellen intend on handing out "Stealth QE / QE light" gifts to the banking system in Q1-2024. Steno Research view is that USD liquidity is likely going to increase massively in Q1 due to a series of technicalities surrounding the BTFP, ON RRP and TGA facilities. These three liquidity adding mechanisms will more than outweigh the QT program (running at a little less than $95bn a month on average), leaving a very benign liquidity picture ahead for Q1-2024. By their estimates, liquidity will increase with $8-900bn until end-March, which almost resembles a QE-light / stealth QE scenario. This will in case be one of the fastest liquidity additions on record, only outpaced during the early innings of the pandemic! If this happens, such a liquidity injection might be a massive tailwind for risk assets...
bitcoin annual returns 2010-2023
Source: Charlie Bilello
Watch prices
Source: www.watchcharts.com
A widening gulf in earnings power between Tech and the rest of the S&P 500
Chart below shows how 2024 earnings expectations for the mega-cap tech and the rest of tech and rest of S&P 500 have been evolving throughout 2023. Source: Barclays, The Market Ear
Bank credit is contracting sharply
This has only happened ONCE in the last 50 years. Source: Game of Trades
Red Sea disruption to oil supplies is overblown, argues Julian Lee. Why?
1. Houthis unlikely to attack Russian ships heading to India & China 2. Saudi pipeline can bypass Bab Al Mandab 3. Iraqi & Saudi shipments to the US don't go through the red sea Source: Bloomberg, Ziad Daoud
Nike sinks 10% after it slashes sales outlook, unveils $2 billion in cost cuts
Nike on Thursday unveiled plans to cut costs by about $2 billion over the next three years as it lowered its sales outlook. Nike now expects full-year reported revenue to grow approximately 1%, compared to a prior outlook of up mid-single digits. In the current quarter, which includes the second half of the holiday shopping season, Nike expects reported revenue to be slightly negative as it laps tough prior year comparisons, and sales to be up low single digits in the fourth quarter. Below details by App Economy Insigths: $NKE Nike Q2 FY24 (ending Nov. 2023). • Revenue +1% Y/Y to $13.4B ($40M miss). • EPS $1.03 ($0.18 beat). • Inventory -14% Y/Y to $8.0B. • Direct sales +6% Y/Y to $5.7B. • New restructuring to cost ~$0.4B. • FY24 revised revenue outlook +1% Y/Y. Source: App Economy Insigths, CNBC
Goldilocks continue with economic data (in red) remaining sluggish and financial conditions (in green) dramatically 'loosening'...
Source: www.zerohedge.com, Bloomberg
