To The Moon

23/2 (Thu) ➡️ The VIX dropped 5.16% despite a low unemployment rate, suggesting that investors have either gotten used to bad 🗞🗞🗞 or aren’t considering the macro situation while buying the dip. 🇺🇸 stocks rebounded from early losses, snapping a dayslong sell-off in the S&P 500 that was driven by concerns about the trajectory of interest rates.

👍 The DJIA rose 0.3%, to 33153.91 points after initial declines.

👍 The S&P 500 climbed 0.5% to 4012.32 points, breaking its longest losing streak this year.

👍 The Nasdaq gained 0.7%, & closed at 11590.40 points. NVDA, 1 of the index’s biggest constituents, surged $29.10, or 14%, to $236.64 & lifted the other chip stocks.

⚠️ The gains follow a wave of selling pressure that sent the S&P 500 lower the previous 4 trading days. Concerns that the Fed could lift interest rates higher than previously expected, & maintain them there for longer, have been a key driver of those losses, & have stoked volatility across asset classes. Markets are resisting pull-back but indexes will likely end down📉 

➡️ This is because there has been No Real Positive Economic Data or 👍🗞🗞🗞 (except NVDA’s earnings release) that could have caused the stocks to rebound😰, which is signaling to me that danger ahead me because when reality hits that the Feds have to be much more aggressive, the sell-off will be intense like on 21/2 (Tue).

🔎🔎🔎 Initial Jobless Claims In-Depth:

➡️ The number of Americans filing for unemployment benefits fell by 3,000 to 192,000 in the week ending 18 Feb, below market expectations of 200,000. The 4-week moving average, which removes week-to-week volatility, rose by 1,500 to 191,250. The 4-week moving average, which removes week-to-week volatility, rose by 1,500 to 191,250.

‼️ Latest value of 192,000 remained close to the 9-month low of 183,000 hit at the end of Jan, giving further evidence that the 🇺🇸 labor market remains tight in part to reduced labor force participation.

‼️ A tight labour market could force employers to raise wages to attract & keep staff, adding to further inflationary pressure, & the need for Feds to be more aggressive in their rate hike campaign.

⚠️ Lay-offs in the tech sector had not caused an increased in jobless claims (see photo).

🔎🔎🔎 GDP In-Depth:

(1) The 🇺🇸 GDP price index, which measures changes in the prices of goods & services produced, increased 3.9% on quarter to a record high of 129.381 index points in Q4 2022.

(2) The 🇺🇸 economy expanded an annualised 2.7% on quarter in Q4 2022, slightly below 2.9% in the advance estimate.

(3) Considering full 2022, the GDP expanded 2.1%.

➡️ Consumer spending rose 1.4%, the least since Q1 2022 & below 2.1% in the advance estimate.

➡️ Spending on goods went down 0.5%, revised from an initial estimate of a 1.1% rise, mainly dragged down by a fall in jewelry.

➡️ Spending on services went up 2.4%, also below 2.6% in the advance estimate.

➡️ The contribution from net trade was revised lower (0.46 pp vs 0.56 pp), as exports fell more (-1.6% vs -1.3%) & imports declined less (-4.2% vs -4.6%).

➡️ Private inventories added 1.47 to the growth, slightly more than an initial 1.46 pp, led by petroleum, coal products & utilities.

➡️ Fixed investment declined less (-4.6% vs -6.7%), led by equipment (-3.2% vs -3.7%) & an increase in intellectual property products (7.4%).

➡️ Residential investment continued to contract although at a slightly smaller pace (-25.9% vs -26.7%).

⚠️ While the Fed is expected to deliver 2 additional rate hikes of 25bps in March & May, financial markets are looking at another increase in June as there's no recession anywhere in the unemployment or GDP data & Jan inflation is looking slightly worse.

🔎Sector-Stock Trend Analysis:

(1) Popular tech stocks were a mixed of gainers & losers with NFLX being the biggest loser at -3.35% & MSFT being the biggest gainer at +1.3%.

(2) Popular chip stocks all gained 1.03%-14.02%🥳🥳🥳 as NVDA’s earnings sent hope. NVDA said that it was expecting an AI-driven boom & a recovery in its videogame business. NVDA shares rose 14.5% after it gave guidance for quarterly sales that were higher than analysts expected. There was a jump in the use of its chips to run AI activities.

(3) Popular 🇨🇳 stocks were a mixed of gainers & losers as investors continue to search for direction amid the HSI’s correction.

(4) On the EV front, it was a mixed of gainers & losers with LCID being the biggest loser at -11.92% as investors were disappointed with its earnings.

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