Macrosynthesis

That's a Wrap

Fresh U.S. economic data prompted investors to reconsider expectations for Federal Reserve policy adjustments. February's Producer Price Index in the U.S. saw a 0.6% rise, marking the most significant surge since August and doubling forecasts. Additionally, unemployment claims dropped to 209K, below the anticipated 218K, suggesting less likelihood of immediate rate cuts. Contrarily, February's retail sales growth was a modest 0.6%, impacting predictions of a Fed rate cut in June to just under 60%.

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Consumer Sentiment Slumps

In March 2024, the University of Michigan's US consumer sentiment index fell slightly to 76.5, marking a three-month low. Despite minor gains in personal finances, expectations for future business conditions dropped. Consumers remained cautious, their outlook influenced by the upcoming November election. Inflation expectations for the next year and the five-year period remained at 3% and 2.9%, respectively.

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Oil Bump

WTI crude futures dipped to $81.04, slightly retreating yet up over 3.5% weekly, driven by robust US demand and brighter global consumption views. Surprising US stockpile drops and an increased 2024 demand forecast by the EIA, alongside Ukrainian drone strikes on Russian refineries and Middle East tensions, underpinned prices, further buoyed by OPEC+'s extended supply cuts. The U.S. is now producing more oil than any country, with the most significant gains in production dating back to the post-financial crisis period.

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Biden Crackdown

The Biden administration is finalizing the strictest emissions limits for U.S. cars and light trucks, aiming to boost electric vehicle sales significantly. The new EPA standards anticipate EVs to constitute about two-thirds of vehicle sales by 2032, a sharp increase from less than 10% last year. This initiative, critical for meeting the U.S.'s Paris Agreement goals, involves a balance to encourage EV adoption without imposing unrealistic expectations on automakers. Adjustments to the proposal address industry concerns about infrastructure and supply chain readiness, potentially reducing immediate emission reduction targets but maintaining long-term objectives.

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BOJ Raises Rates

The Bank of Japan is expected to increase its key interest rate to between 0% and 0.1% after a 17-year static period, prompted by rising wages and sustainable inflation indicators, amidst ongoing bond purchases to mitigate long-term rate spikes.

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Tik Tok

TikTok, owned by ByteDance, reported $16bn in US sales, part of its $120bn global revenue in 2023, challenging Meta's dominance in the social media market. Amidst explosive growth, the US House passed a bill that could force TikTok's sale to a non-Chinese entity or face a ban, raising uncertainties about its future in the US. Despite ByteDance's $28bn net profit, the move could impact TikTok's global appeal and requires approval from Beijing, which opposes the sale.

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Commodity Movers

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Gasoline

+7.7% (1W Chg)

+9.45% (YoY Chg)

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Crude Oil

+3.88% (1W Chg)

+18.08% (YoY Chg)

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Lithium

+7.37% (1W Chg)

+19.49% (1M Chg)

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Cocoa

+15.73% (1W Chg)

+201.66% (YoY Chg)

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Case Study: Level 2 Alert Yields 28% in 5 days

Our Level 2 weekly newsletter last Sunday highlighted our strong belief in NuScale Power's (SMR) potential and the short squeeze it's in.

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The thesis: NuScale, specializing in small modular nuclear reactors, had seen its stock rise amid heavy shorting, with a 25% short interest and heavy options volume. With earnings ahead and signs of a short squeeze, there was potential for quick gains or long-term investment, bolstered by their innovative, scalable reactor technology and solid financials.

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The result: in 3-days, the stock rose 20% to hit our first price target. It's currently up 28% over 5-days.

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Noteworthy Events    

Geron

Geron Corporation's stock surged by 92% March 15th following a positive vote from a U.S. FDA advisory panel on its blood disorder treatment, imetelstat. The company anticipates a regulatory decision on the treatment in June.

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Robinhood

Robinhood Markets' stock jumped by 5.2% on March 14th following the announcement that its equity trading volumes saw a 41% rise in February compared to last year.

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U.S Steel

U.S. Steel's stock fell 6.4% on March 14th, continuing a downward trend after reports surfaced that President Joe Biden plans to express significant concerns regarding Nippon Steel's proposed acquisition of the American steelmaker.

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Dollar Tree

Dollar Tree's shares dropped 14.2% on March 13th after reporting a surprise Q4 loss and plans to close nearly 1,000 stores, stemming from challenges integrating the acquired Family Dollar chain and significant financial write-downs.

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Southwest Airlines

‍Southwest Airlines' shares fell 14.86% on March 12th due to a reevaluation of 2024 forecasts amid Boeing delivery delays and weaker-than-expected Q1 leisure bookings, leading to a unit revenue outlook below previous estimates.

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The LevelFields Team