Week Ahead Strategy: Interesting Thoughts Heading Into The Week

Powell's Going To Make Some Moves!

Hey everyone,

I hope your weekend went well!

If you didn’t catch the article from yesterday, here it is. There are some great macro thoughts in it:

We have a full week ahead with multiple catalysts that will be moving both equity and bond markets. I will go through the events, provide some observations and then share how I view the risk-reward of assets moving forward.

The never-ending game of markets and life continues!

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Events:

We have the economic calendar with some housing data and PMI data. Initial claims continue to cause algo spikes in bonds so watch out for those. Durable goods might move things a little but positioning will likely be looking to Friday for the speech by then.

The main event of the week is Powell's speech at Jackson Hole.

Quick note:

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Observations:

Let me explain how I am thinking about FED speeches right now.

At the moment, the market believes that Powell is done hiking and that cuts are on the table in Q1 of 2024:

Eventually, Powell is going to have to either confirm or deny the possibility of cuts in Q1 of 2024. So every speech is a catalyst to confirm or falsify this idea.

I have a very different view from the market which connects to how price action is likely to function this week.