Traders Will Drown In Data During Fed Week
The July FOMC meeting isn't the only big event on the US docket this week and for once, it may not even feel like it.
Wednesday's Fed decision will come sandwiched between a dizzying array of data, all of which has the potential to move markets under the circumstances.
Most notably, Thursday could mark the unofficial (note the double italics) declaration of a recession in the US. Although consensus still expected the advance read on Q2 GDP to print in positive territory (figure below), a negat
Not cringing yet, but fingers crossed. Saw Yellen’s appearance with the Sunday talking heads. I appreciated her perspective, trying to speak in terms of the current facts, from her view, and manage expectations. But I’m sure it’s scary for a lot of folks, if only because of the volume and tenor of the talk. I’m concerned about real people losing real jobs. So far, that’s not materializing at scale.
Factoid: typical packaged food company in 2Q saw +15% cost input inflation, raised price/mix +13%, saw volume decline -2-3%, seeing positive shift from food-away-from-home back to food-at-home (exceeding the negative shift to private label) and trade-down from premium/fresh to mid/packaged, says supply chain disruptions improving but still high.
Thanks for the interesting factoids, especially the at-home vs away-from-home access to food. Makes sense.
The ongoing supply chain issues you cited also interest and concern me. The CCP is emphatically asserting itself in the Chinese supply chain issue, but not in a positive way. The Chinese property market financing mess during the past few years has festered into a banking mess in which the communist party is taking a blatant stand against Chinese property owners. They’ve actually used tanks to silence the complaints of stolen wealth expressed by their people. Even Apple will at some point have to scout a new supplier if the CCP is in the news like this on an ongoing basis.
How much of trading is by algorithm, and how sophisticated are those machines? Can they process the data in real time, or will it take a human to dial up the risk based on a “good number” or dial down the risk based on a “bad number”. I am used to people taking time to make up their minds about investments, but I think I am dating myself. Will we see 3% moves in the market on a daily basis?
Humans can set trigger levels for the machines, and then other machines respond to the moves. I mostly ignore daily moves now.
Algos are nano-second fast. Many companies that trade with these programs co-locate near electronic exchanges like BATS to cut trade times by, say 3-5 nano-seconds. You can’t blink as fast as these guys can trade a million shares.
I find it interesting that “consumer expectations” affect fed funds rates.
It’s also “interesting” that when wages grow at about half of realized inflation it is still seen as inflationary
Russia assumed it had Europe by the shorts with their dependency on Russia’s oil and gas. It will take time to replace all that energy but Europe will do that more or less depending on how long Putin lasts and Russia’s efforts to make amends. China is banking on the world’s dependency on China’s monopoly on manufacturing which would cause no end of pain if disrupted on a massive scale. But here again the world will not be held at gunpoint without reacting to negate the chokehold. It will take time but the factories in China will have to lay off hundreds of thousands as the orders dry up. It will be interesting to watch. The big advantage China has is it’s people are better educated and in the long run will dominate.