The longest tape tightening in history

The interesting thing about this job is that we spend all our time waiting, sharpening our beliefs and thinking that we will finally get answers to all our questions. And then we are forced to revise all our beliefs, waiting for the next news that should answer all our questions. Yesterday was another big joke, prompting all our pundit friends to revise their expectations for future Fed decisions, knowing that they will be wrong again in the next three weeks. At this point, we wonder if Powell will finally raise rates by 100 bps. Direct.

Audio recording from July 14, 2022

Download the podcast

Always higher

Yes, it’s the new fad. Yesterday at 14:29 we wondered if the Fed would finally become a little less aggressive and if the fact that inflation is “significantly” calming down would prevent the central bank of the free world from slowing the pace of rate hikes. Yes, because “you see, with oil down and commodities up for weeks, it’s obvious that inflation CAN’T GO ANY MORE.”

And then, at 2:31 PM, we’re running around banging our heads against the walls and screaming, “WITH CPI 9.1% THE FED HAS NO CHOICE BUT TO RAISE RATE 100 BAPS SUDDENLY.” and it’s horrible and we’re all going to die because 0.25% more than we expected is really, really ugly and the world’s stock markets are probably going to crash and we’re all going to go through that.”

But not really. In fact, we just took the time to digest the information. Understand that the so-called drop in raw materials has not yet been included in the calculation and it will definitely be next month. However, as everyone knows, the FED is completely stupid. We tell ourselves that they won’t be able to think like us, financial geniuses that we are. Therefore, the Fed SHOULD BE MORE AGGRESSIVE during the July meeting. As a result, since last night, 42% of “experts” are betting on a 1% increase in the key rate, and then by the end of the year we will rise to 4%. It’s funny, yesterday at 14:29 we were betting on 3% for the end of the year, and for a CPI increase of 0.3%, everything changed.


Ago. Therefore, one does not need to be a financial genius or born in the corridors of Wall Street to understand that we are no more advanced than before. I’ll be honest with you, I’d almost prefer CPI to be 10.8%, for us to have a monster panic, for us to capitulate, and for us to be defeated by depression. Then we could finally try to rebuild something and tell ourselves that the worst is behind us. But no. Here we remove the adhesive plaster millimeter by millimeter, and it is still easier and less painful to do it with a sharp blow.

Unfortunately, we will have to keep scratching our heads and reading miles of economic reports written by anti-depressant strategists who know no more than you and I, who are content to adjust their forecasts as information becomes available. A bit like a meteorologist who says “hang on, it’s going to rain” when the sky is dark, the wind is blowing in your direction, and the road 50 meters away is already wet.

CPI is our benchmark

Therefore, the CPI turned out to be stronger than expected. So the market went to celebrate. More in Europe than in the US. But that was only because the US closed later and they had time to think and tell themselves that none of what we heard yesterday was a “real surprise” and if it was, it was all in the prices. From a technical point of view, the DAX held the support perfectly, while the rest of the indices were not very noticeable. Except that the intraday technical patterns are showing something that “might” look like a trend reversal.

That said, we’ve run down all the important things you “had to wait to find out.” Going forward, we’ll have to settle for quarterly releases to keep some semblance of excitement in our lives. Right now we’re going to start with financials as we have JP Morgan and Morgan Stanley today. Therefore, it must be remembered that finance is the world champion of publishing figures that are as FAR as possible from analysts’ expectations, because, as they say; “the worst shoemakers.” So don’t expect an analyst who works IN a BANK and does research on BANKS to have better business visibility than a janitor who sweeps a broom in a bank branch. Then, in a few days, it will be time to warm up for the FOMC meeting at the end of the month. But so far we’ve stirred enough air to store enough energy that it’s more than likely we’ve found an alternative to Putin’s gas.

For the rest

The section on CPI, Inflation and the FED, which is on the boat, is therefore closed for now, and even though we still have 24 hours of commentary on this topic in all its forms, we can move on and have time to talk about something else. I don’t know what, but something else. There are many subjects; release of Thor in cinemas, the possibility of seeing Tom Cruise return to Tom Gun Three at the helm of a patrol of fighter pilots in walkers or even the fact of knowing whether Nadal was allowed to ride a jet ski a week after being eliminated from Wimbledon due to abdominal distension

At the moment, after Asia opened lower due to inflation, it has decided to tell itself that “the worst is over” and all the markets are going up, saying that the Fed will also become MORE AGGRESSIVE… But this will work out in the end, and with any luck, we won’t be in a recession – even though 58% of Americans believe we’re STILL in a recession and that their wage increases won’t be enough to pay for the gas and copper needed to make their own semiconductors at home. However, China rose 0.3%, as did Hong Kong, while Japan rose 0.7%. Yesterday, according to CPI data, Bitcoin attempted its 1274th hack, paying below $19,000, but this morning it’s back to normal and the Crypto-Star hitting $100,000 on Christmas Day, except we’re not yet we know a year – deals for $20,000 and dust again. Oil is at $96 with a little, but due to the fast-moving recession, it will soon fall – it’s still a “sure hit” Molicare adult diapers offer you. For those still interested in the wealth insurance that gold offers, it is paying $1,728 – just like yesterday. This is the only thing that hasn’t budged during the CPI releases.

New news

In OTHER NEWS, US CPI is on the sidelines. Germany’s CPI decreased slightly to 7.6%. The French plummeted to 5.8%, but it doesn’t matter to him because Macron is so good at everything he does that it’s just normal, just as it’s perfectly normal for him to tell everyone that the fact that his cooperation with UBER shocks, touches one without moving the other. We are already happy to know that there are two of them. On the other hand, inflation in Spain is 10.2%, the same as last month. And then, while everyone is worried about what the ECB is doing about interest rates, we learned yesterday that the Canadians raised rates by 1% – bam – I think apart from the canton of Schaffhausen and the Sultanate of Brunei, the ECB remains one of the last banks that thought that inflation will disappear with the help of a magic wand or thanks to the attachment of hands and the smoldering gaze of the French president.

Elsewhere, there’s also talk of what the FED is going to do in the next few days, the fact that one of Tesla’s AI chiefs, who helped develop the still-defunct Autopilot, is leaving. This is still good news for self-driving cars, and it fills me with joy. There is also Celsius, which is therefore officially (or almost) bankrupt. “Crypto lender” can no longer pay anyone. And then to add a layer to cryptocurrencies, Paul Krugman believes that cryptocurrencies are a postmodern version of a Ponzi scheme. Madoff also filed a complaint for copying his idea. Finally, first of all his heirs and former cellmate. It should also be noted that the inversion of the yield curve has not been this strong since 2000. I say this even though everyone seems to not care at the moment.first oil stop loss.

Numbers of the day

As for today’s indicators, apart from JP and Morgan, we will have data from Taiwan Semi’s – we can finally step up investment (or not) in growth themes. Switzerland and the US will also have CPI, so as not to wean too quickly from this magical inflation theme.

While I’m talking to you, futures have fallen by 0.11%, and no conclusions should be drawn. Personally, I’m going to go back to sleep with an alarm scheduled for the last Tuesday of July – so I can talk a little about the FED again. Have a nice day and I’ll see you tomorrow to wrap up the week if I can wake up.

See you tomorrow. Or not.

Thomas Veillet

“Winning is not everything, but the desire to win is. – Vince Lombardi