SignalPlus Macro Research (20230814): SEC Delays ETF Applications, Market Remains Bullish

Unlike the CPI data, which has mixed information, last FridaysPPI data significantly higher than expected, headline PPI and core PPI rose 0.3% mom, the strongest data since the beginning of the year, PPI year-on-year growth rose to 0.8% from 0.2% in the previous month, and PCE-related components such as air tickets were higher than expected.

on the other hand,Relatively dovish surveys of consumer sentiment, slightly weaker expectations, and moderated inflation expectations;However, despite the friendlier data and another early sell-off in equities, Treasuries were unable to sustain bids, with the yield curve up 5-7 basis points on the day, and similar to equities, the chart pattern for fixed income also looks negative ,The 10-year yield has broken out of the year-to-date trend channel, which is just one step away from the local high of 4.25%, which will be the next obvious trend target.

Commodity prices rose, oil prices remained above $80, U.S. Treasury issuance increased, and financial conditions remained at the same loose level when overnight rates tightened (now at 5.3% vs about 3.80%),A bearish bond narrative is still developing as we head into the Jackson hole meeting at the end of the month, even as the market increasingly believes the Fed is essentially done with its current rate hike cycleThe bear-steepening yield curve has continued to weigh on stocks over the past week, with tech stocks in particular suffering price action, with Nvidia down 15% since the start of the month.

This week there will be the release of US retail sales data and the minutes of the Federal Reserve meeting, together with Chinas MLF interest rate decision and more Chinas real economy data release (industrial added value, retail sales, new home prices), Chinas data still performed poorly last week,New loans were at the lowest level since 2009, while total social financing fell to RMB 528 billion, well below expectations of RMB 1.1 trillion, market sentiment remained subdued, with A-shares giving back about 50% of their post-politburo gains, and investors continuing to (nervously) wait for signs of PBOC easing.

Returning to the U.S. financial reports, this week there will beA string of consumer-facing businesses report earnings, including Walmar, Target and Home Depot, American consumers continue to show excellent resilience, the current second quarter profit fell only 4% year-on-year, which was significantly better than the 9% decline predicted by investment banks, especially the performance of the discretionary consumer goods industry exceeded expectations; in addition, the market generally expects profit in the second quarter will be the trough of the current economic slowdown cycle, and EPS growth is expected to return to positive by the end of the year.

From a positioning perspective, Morgan Stanley reports that,Traders net options gamma positions turned negative for the first time in months, explaining some of the sharper moves in stocks last week; Moreover, with systematic funds still heavily long in equities, the market remains vulnerable to position-led sell-offs in the short term, and we still recommend a more defensive strategy at this time.

In terms of cryptocurrency,SEC Delays Decision on First BTC Spot ETF Applications, As Expected, they will ask the public for comments on Cathie Woods Ark 21 Shares Bitcoin ETF, delaying the approval time by a few weeks; The first deadline is September 2nd.

Meanwhile, as prices continue to move sideways,CMEs ETH open interest has dropped to a one-year low, while the real volatility of mainstream currencies also continued to drop sharply. However, the open interest of BTC call options continued to significantly exceed that of put options, and the remaining participants remained optimistic in the long run.

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