Fiscal: Sisyphus or Hercules - February Macro Snapshot

Like Sisyphus rolling the boulder up the hill, the US economy remains vulnerable to any drop off in fiscal spending.

New Ideas: Issues with US tax receipts and job openings, S&P implied correlations extremely low, SOFR put-flies, USDCNH

Watching: FI Allocations in TIPS, MBS. Equity Allocations in LatAm (Mexico, Brazil), Goldminers, Energy, Materials, Staples

  • Fiscal: more Sisyphus than Hercules
  • Tax receipts on production diverge vs GDP
  • Job opening data worse than headline, distorted by labor hoarding…
  • Warns of downside to EPS forecasts…
  • Even non-tech forecast EPS remains vulnerable
  • Pricing power weaker, removing another support for margins
  • Inflation leading indicators are bottoming
  • Moderate liquidity headwinds
Macro SnapshotTacticalCyclicalStructuralSOFRUSDCNHFiscalAllocationLabor HoardingTaxJob OpeningsHiresPricing Power