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Rotation a go-go and who gives a hoot about Hassett?
Podcast 24 minutes to read
Summary: Today - a look at another day of powerful rotation moves across themes in the equity market and even within AI, why we shouldn't care that much about who replaces Powell at the Fed, the UK budget countdown today and the likely fallout, more across FX and macro and more. Today's pod hosted by Saxo Global Head of Macro Strategy John J. Hardy.
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Today’s Links
My former colleague and formidable market technician Kim Cramer Larsson has a substack now with daily rundowns of the key charts across markets. Wolfgang Münchau has the must-read of late on the shape of reality in the Ukraine War and how we are likely headed for the war’s suspension soon - my chief hope has to be that soldiers and civilians alike stop dying and for a long time. Mike Green with a very long and thoughtful piece on the middle income portion of the US middle class and how they are squeezed by the cost of living and unable to access all of the support that the lowest earners can receive - this is critical stuff. Endgame Macro pulls out an interesting credit indicator and what it signals. A counter-argument to that piece I passed along too hastily on the AI “fraud” perpetrated by Nvidia and others. HT FTAlphaville. A piece (again, HT FTAlphaville) quantifying how bizarre last Thursday’s session was in the US. My suspicion is that it simply shows the magnitude that the options market has reached in determining short term market volatility (re - NVDA earnings and the Friday expiries post their Wednesday earnings report). Bessent making it clear why we shouldn’t give too much of a hoot who replaces Powell - it’s called fiscal dominance and Bessent will be in control, with the Fed as an auxiliary to the Treasury’s agenda. Every’s latest includes reference to two stories of interest - China’s “holding all of the cards” in pharmaceuticals and its increasingly astounding and human-lite production prowess. There’s also this one from the Wall Street Journal on a pharma startup needing official support if it is to avoid China’s predatory mercantilism as it funded the company.
Chart of the Day
Healthcare stocks have been resurgent as a part of the huge rotation going on in the US equity market, as can be seen in the XLV healthcare ETF charted below. My colleague Charu Chanana with some great coverage of this rotation in her latest piece out today. Questions and comments, please!
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