Hartnett Gets Brutal on The Future | Market Rundown
Inflation is a secular reality not a cyclical theme
BOA’s Hartnett gets brutal *Must read*
1- Market Rundown:
Good morning. The dollar is down 29 pts. Bonds are stronger with the back end of the yield curve reflecting it most. Stocks are doing well with Nasdaq up 1.6%, The S&P up 1.3%, and the Dow up 75bps. Gold is up $13 and Silver Fu. is up 32c. Copper is weaker by 20bps. Oil is up $1.30 ( huge reversal from earlier). NatGas is up 7.9% (21c). Crypto is very weak down almost 5% across the board and grains are mixed with Corn and Soy up 110 and 75 bps respectively and Wheat is down small.
Today’s data was violently mixed for Fed insight. The ISM signaled re-accelerating inflation But the more closely watched retail spending numbers today showed big disappointment. Last month’s numbers were absolutely explosive and that put this month’s numbers more in focus. Goldman’s trading desk correctly noted that long specs were not stepping up yesterday from fear of another high spending print signalling even more hikes.
Bottom line: As big as it was, the January spending was a one-time event. combine that with speculation that the huge jobs numbers last month were also possibly one-time, and the bulls had all the excuse they needed to buy everything today. For example: Bank of America expects a sharp drop in future payrolls as the Jan print was an outlier.
The Secular Script
Hartnett continues to channel Zoltan showing just how the big-picture changes Pozsar showed over the past year are trickling down into the macro domestic picture.
Last week in Echoing Pozsar, Hartnett says "War is Inflationary"
The concepts Zoltan Pozsar wrote that GoldFix shared over the last year are now filtering from the Big Structural Picture (Zoltan’s domain) to the Macro level (Hartnett’s expertise)
This week he lays out in 6 brutal points what is going to happen in the macro world as dictated by the secular shifts in play now. It ain’t pretty. He is basically building on last week’s report in more detail, and his comments are going from broad to more specific in this one.
We have been writing on this for a year now and feel our work is done on handicapping its inevitability. The (excellent) macro-guys have the ball now. The mediocre ones are still not getting it.
What we hope to have accomplished for you, is from all we’ve read and written on this phenomenon, the reports coming up from all the banks will now be that much easier to get…. GoldFix readers knew it first. We’re pretty proud of that.
Hartnett’s 6 points on The Secular Shift:
1. An era of extraordinary monetary policy (lowest rates of 5000 years) is over,
2. Inflation is a secular reality not a cyclical theme,