Author: jsc

The public release of Chat GPT in November ’22 kicked off an AI arms race that still looks like it is in its ‘early innings.’  

With an eye out for bearish triggers, the official Fed statement exiting tomorrow’s meeting is expected to be little changed from the January meeting. 

Markets are being driven by company-specific developments ahead of a busy week of macro catalysts including five central bank meetings.

The front end of the yield curve may now be responding to the hot January/February inflation prints. Two-year yields reached resistance levels near 4.70% immediately after the January CPI/PPI reports, pulled back to bullish inflection levels near 4.50% and are now flirting with the 4.70%

Yesterday’s hotter than expected core CPI print resulted in higher bond yields, which may have temporarily interrupted the unwinding of a very crowded momentum trade.

Position squaring and hedging coming into today’s data are being unwound this morning as the CPI print came in ‘no worse than feared.’

The most significant events of the week are still to come with: 1) Powell’s testimony tomorrow and Thursday; 2) ECB policy decision on Thursday; 3) AVGO and MRVL earnings (check on AI optimism) Thursday after the close and; 4) the February Jobs Report on Friday.

The most significant events of the week are still to come with: 1) Powell’s testimony tomorrow and Thursday; 2) ECB policy decision on Thursday; 3) AVGO and MRVL earnings (check on AI optimism) Thursday after the close and; 4) the February Jobs Report on Friday.

On Friday, the cyclically-sensitive RTY managed to close above our technical resistance number of 2070.

US equities are mostly higher with the small cap Russell 2000 (RTY) outperforming large cap indices for a second day.