The excellent Michael Hartnett at BofA.
Tale of the Tape:classic Jan reversals…’22 losers ofcrypto, USTs, China, credit, stockssmashing’22winners of cash, commodities, US$ YTD; S&P500 barometer“so goes January, so goes the year” correct 71% of time since 1929.
The Big Picture:-0.1% CPI & 205k unemployment claims…don’t get more Goldilocks than that; consensus now 50bps hikes H1’23 then 200bps cuts next 18 months (Chart2);SPX range 3.6-4.2k but all positioned for 3.6k before 4.2k; China reopen, EU energy boost, US fiscal/labor market…GDP/EPS recession trade requires patience; pain trade up ‘til Fed rate forecasts, yields, credit spreads trough signal peak Goldilocks.
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