To The Moon

After an important 2-day of economic data release, it seems like the 🐂🐂🐂 are back in play for April🥳🥳🥳

🔎Initial Jobless Claims (30/3):

The number of Americans filing for unemployment benefits rose by 7,000 from the previous week to 198,000 on the week ending 25 March, slightly above expectations of 196,000. While surpassing expectations, the result remained at a low level by historical standards & continued to point to a stubbornly tight labor market, in line with the hot payroll figures for Feb & the Fed’s outlook of low unemployment. The tight job market forces employers to raise wages to attract & keep staff, magnifying inflationary pressure on the American economy & adding leeway for the central bank to continue tightening monetary policy. The 4-week moving average, which removes week-to-week volatility, rose by 2,000 to 198,250.

🤔💭My Thoughts: Unemployment claims raising is positive📰 for investors as this would mean that the rate hikes are taking effect, & the Fed might stop the aggressive rate hike campaign soon❣️

🔎GDP Growth Rate (30/3):

The 🇺🇸 economy expanded an annualized 2.6% on quarter in the last 3 months of 2022, slightly less than initial estimates of a 2.7% rise.

⭐️ Consumer spending rose 1%, below 1.4% in the second estimate, as spending on services advanced much less than initially estimated (1.6% vs 2.4%). Also, spending on goods went down 0.1%, compared to initial estimates of a 0.5% decline, with jewelry leading the drop. Also, the contribution from net trade was revised lower (0.42 pp vs 0.46 pp), with both exports (-3.7% vs -1.6%) & imports (-5.5% vs -4.2%) falling more.

⭐️ Private inventories added 1.47 to the growth, in line with the second estimate, led by petroleum, coal products & utilities.

⭐️ Fixed investment declined less (-3.8% vs -4.6%), due to equipment (-3.5% vs -3.2%) while intellectual property products increased (6.2% vs 7.4%).

⭐️ Residential investment continued to contract although at a slightly smaller pace (-25.1% vs -25.9%).

⭐️ Considering full 2022, the GDP expanded 2.1%.

🤔💭My Thoughts: Recession-risks are low as long as banking crisis has stabilised & there’s no additional🗞🗞🗞 of new 🏦🏦🏦 collapsing.

🔎Core Inflation (31/3):

Core PCE prices in the 🇺🇸, which exclude food & energy, rose by 0.3% month-over-month in Feb 2023, slower than the 0.5% rise in Jan & below market estimates of 0.4%. The annual rate, the Fed’s preferred gauge to measure inflation, rose by 4.6%, the least in 15 months & slowing from the 4.7% in the previous month, slightly below market expectations of 4.7%.

⭐️ Prices for goods were up 3.6% vs 4.7% in Jan

⭐️ Prices for services increased 5.7% vs 5.6% in Jan

⭐️ Food cost rose 9.7% vs 11.1% in Jan

⭐️ Energy prices increased 5.1% vs 9.6% in Jan

🤔💭My Thoughts: Investors would appraise these data above as positive because price growth is easing & they would be hopeful that the Fed would have 1 last 25bps hike at max. If the rate hike end is in sight, investors will feel more relieved & this can be confirmed by the VIX dropping to below 20.

❣️Whenever the VIX dips below 20, the stock market marks a medium-term top & indicates that the investment crowd is extremely complacent about the current outlook, having little reason to worry😉

🔎Personal Income & Spending (31/3):

⭐️ Personal income increased 0.30% in Feb 2023 over the previous month.

⭐️ Personal spending rose by 0.2% from a month earlier in Feb 2023, following an upwardly revised 2% increase in the previous period & slightly missing market forecasts of a 0.3% growth.

⭐️ The latest increase reflected an advance of $25.8 billion in spending for services & an increase of $2.0 billion in spending for goods.

⭐️ Within services, increases in housing & health care were partly offset by a decrease in food services & accommodations.

⭐️ Within goods, increases in gasoline & other energy goods, “other” nondurable goods (led by pharmaceuticals), & food & beverages were partly offset by a decrease in motor vehicles & parts (mainly new and used light trucks).

🤔💭My Thoughts: An increase in income & spending adds to inflationary pressure but the impacts of rate hikes are delayed, so it’s likely that the the cumulative effects of rate hikes might still be able to overwrite this inflationary pressure.

📝Conclusion: Economic data seem to be favourably pointing to max 1 last 25bps hike & investors feel relieved & will likely stage a 🐂 rally in April. Nasdaq is already in 🐂 market territory as of yesterday so I expect TQQQ & other tech stocks like TSLA & PLTR to increase. Bought YINN today as I expect the HKEX to get a lift on Mon from the 🇺🇸 market today😉 $Nasdaq100 Bull 3X ETF(TQQQ)$ Bullish$Tesla Motors(TSLA)$ Bullish$Palantir Technologies Inc.(PLTR)$ Bullish$First Republic Bank(FRC)$ Bullish$UBS Group AG(UBS)$ Bullish

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