Week ahead - Sunday bits / SOX, semis / AMZN / US Govt shutdown risk

- So we got a hawkish pause from the FED, bonds/duration sold-off as expected and eventually equity markets weakened and closed on lows on Friday night >>> if the US government shuts down for a couple of weeks, nothing dramatic, BUT it WILL increase probability of a decent slowdown in Q4, the rates market will react and price it >>> risk of AI fade, FTC antitrust case against AMZN (was flagged earlier this month), VIX dealers still massively short, have semis topped ? plenty of charts now popping up on X and in my emails : ''nasdaq100 breaking own, NVDA breaking down, semi conductors double top, etc etc etc....... bottom line markets stayed overbought for months with the magnificent 7's, they can remain oversold for a while too

FED is cutting staff after more than a decade of payroll growth >>> markets currently pricing in that the FED is done (maybe another 25bps in Nov or Dec), on hold till the middle of 2024 and then about 2 cuts priced in for the rest of 2024 - seems fair!
"Only thing outperforming Nasdaq YTD are Japanese banks; irony is Japanese banks are discounting higher rates, and US tech betting on lower rates." Hartnett (Buffet bet on Japanese banks helped clearly..)
SPX500 : 7 of the largest market cap are up about 50% in 2023, the remaing 490+ are flat or down >>> bottom line if you buy the SPX today or the 7's, you are buying a bunch of companies that make up 34% of the index and have an average P/E ratio of about 40-50.. that's expensive
The Fed's balance sheet hit its lowest level since June 2021 this week, down $941 billion from the peak in April 2022
Russia's Foreign Minister Lavrov said that Ukraine's peace plan as well as the latest U.N. proposals to revive the Black Sea grain initiative were both "not realistic."
This week's economic calendar : in focus : IFO tomorrow, US conf board consumer conf (slightly lower exp) and US new homes sales (loss of momentum likely due to rates), Wed durable goods, Thursday US GDP second revision + annual revisions, German CPI and Friday main events probably with US core PCE data, JPN CPI and Euro area HICP inflation.

McCarthy’s House speakership hangs by a thread as US shutdown looms | Kevin McCarthy | The Guardian

The FTC may file an antitrust lawsuit against Amazon as soon as next week (yahoo.com)

AI Fantasy Fades as Wall Street Reels From Real-World Rate Jump - Bloomberg

Carl Quintanilla on X: "PIMCO: “The chances of a government #shutdown are increasing – our odds had been at ~65%+ odds (i.e., more likely than not), but after the last few days, folks on the Hill are now putting the odds of a shutdown between 80-99%.” [Cantrill] (1/2)" / X (twitter.com)

Charlie Bilello on X: "The Fed's balance sheet hit its lowest level since June 2021 this week, down $941 billion from the peak in April 2022. Changes in the Fed's balance sheet since 2002... https://t.co/nthHi0D4RA" / X (twitter.com)

Campaign to rejoin EU gathers strength at protest march | The Independent

UK ministers scrap energy efficiency taskforce after six months | Energy efficiency | The Guardian madness

As planet gets warmer, ski gondola maker goes urban - The Local

Semi conductors