저자: TheTravelingTrader · 외국인
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JP모건 CEO 제이미 다이먼의 주주서한을 인용해 소프트랜딩 확률이 시장 반영(70~80%)보다 낮다고 보고, 고금리 장기화·스태그플레이션 위험을 강조. 채권시장이 주식시장보다 더 정확히 경고하고 있으며 연준이 6월에 인하하지 않을 경우 주식 조정 가능성 제기. 당장 SPY·QQQ 매수는 안 하고 테슬라 등 눌림목 종목 관심. 장단기 금리 역전 지속과 VIX 저점 시 콜옵션 헤지 전략 언급.
다듬은 글
let's start the day with those comments from JP Morgan CEO Jamie Diamond In His Latest letter here to shareholders the CEO covering a wide range of topics here in 61-page letter including the possibility of higher for longer rates yeah certainly and also what caught my attention was what he had to say about the about the economy soft landing and the odds that we could see a soft landing and really pulling directly from the shareholder letter he's saying that the market seem to pricing in pricing in a soft Landing at about 70 to 80% chance modest growth along with declining inflation and interest rates he actually believes that the odds are a lot lower than that so today Jamie Diamond released his letter to shareholders something that he typically does before earnings and in that letter he mentions that the chance for a soft Landing right now based on Market activities being priced in at a consensus of 70 to 80% likelihood however he said that he thinks it's a lot lower than that now you might say to yourself why should we listen to Jamie Diamond I'm going to show you after we go over the rest of his thoughts coupled with Diamond's concerns about the potential for stagflation stag flation is basically just a recession that is characterized by lingering High inflation he warned interest rates could SAR to 8% or even more if you guys are fans of this channel you know that I mentioned part of the reason or a huge reason why the stock market is acting as crazy as it is right now is because of the fact that the stock market is pricing in rate Cuts way too soon in my honest opinion and I'm glad that Jamie Diamond agrees with me diamond explained there are several persistent inflationary pressures which could keep price increases sticky including the rise in military conflict globally and the lingering effects of aggressive policy from central banks worldwide coming out of the pandemic the billionaire Diamond also warned about the potential for Carnage for both equity and debt investors should a higher rate scenario play out now debt investors are obviously those that are invested in bonds treasuries Etc and he noted that stock valuations are already at their high and and credit conditions are extremely tight now why should we listen to Jamie Diamond well you know that this channel is all about data all about historical facts I try not to inject any emotion into this Channel and anything that we cover here and if you go back in history Jamie Diamond was actually one of the only people back in 2007 that was warning of a recession now you might think he's a crooked banker and he very much could be a crooked Banker but if you look at his views on the economy historically and on recessions historically he has actually been on the more correct end of the spectrum while the Fed was actually telling us back then if you look at this fomc statement from January 31st 2007 the FED said overall the economy seems likely to expand at a moderate Pace over coming quarters and everybody from Bernan Kei to Janet Yellen everyone was really singing the Praises of the FED being able to bring us to a soft Landing one of the only people that was not in that camp was Jamie Diamond in January of 2007 Jamie Diamond warned that an uptick in defaults might indicate that a recession was coming defaults were rising in the bank's mortgage portfolio so even with regards to their own portfol folio he was very candid about the fact that defaults Rising was a real risk he added that the bank was positioning itself to withstand a downturn in the economy now I'm not even going to go into how good of a CEO I think he is because it's true as a matter of fact JP Morgan seems to weather every single economic storm and do it in a way where they have already planned ahead for what the risks are anyway the Crux of this article basically says 11 months later in December 2007 the recession began diamond saw it coming the FED didn't and as we stated before part of the reason for this insane rally was because the market was expecting more rate Cuts sooner right and this was kind of based on the feds dotplot and also based on Jerome Powell's comments to be fair but the fed's Dot Plot initially showed six rate cuts for 2024 back in the summer of 23 and that dropped down to four now dropped down to three but Jerome Powell still sounding like a dove saying that we are probably at the end of the hiking cycle however for the first time ever you could see that now the possibility of a Fed rate hike skip or basically you know keeping rates higher for longer is the highest that it has ever been this year with almost 50% chance that the FED actually skips in June just a month ago as you can see here this was at 26.6% So based on Jamie Diamond's track record we have to take him at his word here or at least consider heavily what he has to say I certainly would trust him more than I would trust the FED certainly would trust him more than I would trust Yellen or the government but what does this mean for the markets right now because obviously if you're watching this you're most likely watching this because you're concerned about your money well if we take a look at the bond market we have to trust what the bond market is saying here the bond market has always been more honest than the stock market and the bond market right now Bond investors and bond Traders are signaling quite a bit of worry so if you look at the 2-year last year the two-year dropped to 3.5% and it looked like the 2-year was going to even me even I thought that you know that was really the end of the 2-year being that high that elevated when it was trading at a 5% and I thought that the 2-year would continue its trajectory down as long as we didn't see any surprises however because inflation is persistent and this is something that you don't really hear talked about that if you look at the last seven inflation reports these are the last seven cpis only one came in as expected and only one other one came in below expectations the rest came in above expectations and you can see that Rising oil prices right now which is something that we tend to see an oil shock we tend to see this before a recession oil went from $67 a barrel back in December 2023 up almost 30% to $87 a barrel right now so what are the chances that CPI comes in below expectations you can already see here this is the highest projected forecast CPI which is slated to come out later this week on Wednesday April 10th but you can see here that this is the highest forecast since October 2023 when it was forecasted at 3.6 now we are forecasted at 3.4% inflation because of that persistent these persistent prices in Commodities as well as strong data strong jobs data strong consumer sentiment strong spending data so right now the bond market is trading closer to Jim Diamond sentiment than the stock market is with yields pushing going from 3.5% last year the two-year yield all the way back up to 4.8% and it looks like it has more room to grow which is not great for the inverted yield curve and I feel like before we talk about the markets I should just mention this in passing that gold is at all-time highs by a long shot trading at 2340 an ounce and this is part of that commodity shock that we tend to see before recessions now before I get into the stock market analysis and what this means for the stock market I just must also mention that the current fed funds rate is at 5.33% now Jamie Diamond says that we could see rates as high as 8% and I assume he was talking about the federal funds rate this would likely entail some sort of emergency meeting I think that is highly unlikely however the last time that we saw an emergency meeting hike was in April of 1994 when we raised plus 25 basis points but we were already in a rate hiking cycle I personally don't think that the FED is going to raise to 8% this year now if we do as a matter of fact experience stagflation or runaway inflation and things just get out of hand yes the FED between this year and next year will be forced to continue to raise rates that is a possibility which is crazy because the market was just expecting six rate cuts which I thought they were off The Rocker so with that said what does this mean mean for the stock market well let's just play a little bit of logical reasoning here if the stock market was rallying this hard and it's a historic run by the way I went over before in previous videos how historic of a run this is but if the stock market is rallying this heavily because of expected rate Cuts once the stock market sees the reality that the bond market is already foreshadowing then what do you think is going to happen to the stock market I think that as the picture becomes more and more clear especially if this next inflation report comes in much higher than expected and the next fed meeting which we are going to be seeing May first less than a month from the recording of this video If the Fed starts signaling that we are likely not done with our rate hiking cycle that to me would be the biggest blow to the markets now I don't think the FED just yet will say that I think on their May 1 meeting they will say the same thing they've been saying all along which is we're likely done with the hiking part of the monetary policy we will continue to reduce the balance sheet and in terms of the rate it'll be on a meeting by- meeting basis based on the data that comes out but where things could really get interesting is when the June meeting rolls around because like I said right now there's still a 50% chance for some reason even though I don't think there's any possible way this happens but there's a 50% chance based on how fed funds Futures are trading that the FED does one 125 basis point rate cut in June now unless the reason that this is is because they think the FED will have to cut because something breaks between now and June I personally don't think this is a possibility so things will get really interesting in my opinion for the stock market come June if the market realizes that the FED is not going to cut and even worse if the market realizes that the FED is going to hike which the jury for me is still out on that right I know for sure that the FED is not going to cut by June is the Fed going to do more rate hikes I mean I appreciate Jamie Diamond's assertion that that's a possibility I think it's a possibility I don't think right now it's that likely but if the market thinks so then I think that that will be the end of this type of Hysteria we'll get a lot more volatility in the markets now we've essentially been trading sideways for an entire month in 2024 between March and April and I think that if we get below this level here on the Spy if we get below 508 on the spy and we see an energetic move down a full body candle down below this and we break this Market structure from bullish to bearish then I'm going to start getting worried here about the fate of the market and whether we're going to hit a broader correction or not for now I'm not looking to really establish any shorts here like I said the last seven cpis only one came in below expectations and the market still rallied like crazy so I'm going to be monitoring the situation and see you know is the market going to come to terms with the fact that the FED isn't going to cut in June and if the market does expect a possibility of the FED actually hiking then I think the stock market will finally get the signal that the bond market has already given for me as I said from here I'm not buying the Spy I'm not buying the QQQ there are certain things that I do like on on the dip certain things that I think give a much better risk to reward ratio such as Tesla I did send my analysis out on Nike this week as well I do think Nike is starting to look interesting even though I feel like it has a little bit more downside Nike is definitely starting to look interesting below $90 especially when this thing was trading at 180 bucks and I am farming for potential interest rate plays here and I assume that part of the reason that Jamie Diamond was talking about interest rates potentially spiking is because he's looking at his own data JP Morgan's treasury survey tracks are clients positioning and treasury's asking them whether they are long neutral or short and basically hardly anyone on that list is short treasuries and you know how I feel about asymmetrical plays when there is a disproportionate number of Traders or investors on one side that usually means there's a high likelihood that the outcome on the other side will play out but I'm not ready to go short Treasures yet however I do think there is a play to sniff out at some point based on this dislocation I don't know what it is yet I got to do more analysis on this the thing is the 10e and 2-year is still inverted this is the longest time ever that it has been inverted and we already see the 2E spiking and if it continues to spike disproportionately to the 10year that is going to spell bad news for the markets for the economy because the longer that this is inverted Ed the higher risk of something breaking what the FED is actually trying to do is they're trying to get the 10-year yield above the short range yields but the longer term yields have a lagging effect versus the FED funds rate because the FED funds rate affects the shorter end of the curve and in order to fix this the FED actually has to cut rates but it can't cut rates with such strong data one other play that I continuously give to you that has been hitting it for us time and time again is the vix when the vix gets 2 13 or below in this market I've generally been a buyer of at the money calls and I've been Banking close to 100% on those calls each and every time and I'll continue to do that until the volatility shakes out but as you can see as a hedging strategy going long the vix is much better in short spikes than it is you know trying to short the market especially when the market is trading sideways like this anyway Traders you have my thoughts on what Jamie Diamond said I do think that he is somebody that we have to listen to as it relates to recessions as it relates to Sticky inflation I personally happen to agree with him in large part I don't think we are going to get to 8% federal funds rate but I do think the Bond Market is signaling what he's saying much closer than the stock market is and once we get signs that the stock market is bought into this theory of higher for longer that the stock market will start to correct as well we do have an inflation report out later this week I don't think it will be that consequential I'm much more looking forward to the June fomc meeting not even the May one if you want access to all of our plays all of our day trades Hedges swing trades stock analysis Etc link is in the description below make sure you put on the coupon code if you want to join subscribe to the channel hit that notification Bell stay safe out there Traders peace
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