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The Macro Situation

yada-yada (noun):

• a phrase used to jump to a conclusion by omitting parts of a conversation that often include important details relevant to the conclusion;

• a state of wishful belief in which one does not ask questions about details in order to confirm the conclusion or decision one wants.

― New Entry in the Updated Devil’s Dictionary

The Fed chair spoke this week to Congress. He said a few things about inflation and yada-yada the economy is on the right track.

Maybe. There’s a lot that the yada-yada is covering. Things are looking satisfactory with the recent jobs report:

• 275,000 jobs were created in February, which was more than expected, but not out of line with the revised numbers for January (229,000) and December (290,000);

• the unemployment rate increased 0.2% from January to 3.9%, which makes it the highest in the last two years.

While this data appears enough to satisfy Wall Street that the Fed will not back away from cutting rates at some point this year, points of caution include:

• worries that inflation will remain high while the economy weakens (stagflation); and

• determining exactly how bullish things are.

The rosy days of record-breaking market closes could be a short one. As for the first rate cut, June is still looking like the earliest possible date.

The ANFCI as of March 1st has inched up slightly from -0.49 from the previous two weeks. So adjusted figures indicate the economy is slightly more risk-averse than before–likely not a meaningful change yet.

Elsewhere, the European Central Bank is anticipating a rate cut before the summer break, while Japan is considering lifting its negative interest rate.

Core Assets Update

Gold (2186.20) rose sharply due to positive sentiment about the economy (and hence implied interest rate cuts, which would devalue the dollar relative to gold).

Crude Oil (77.85) closed down on Friday due to a slowing Chinese economy, and this drop happened despite expectations of continuing constraints on oil supply and production.

10-year Treasury yields (4.077%) hit a five-week low as investors weighted the increase in unemployment more than the unexpected jobs numbers increase.

- Todd Mei, PhD & Sebastian Purcell, PhD

AI Sentiment Report

The following sentiment scores use ChatGPT as part of the AI tech stack to track sectors as leading indicators. 

(Lesson 4 of "The Art of The Bubble" series covers the selection of lead indicators for bubble trades). 

The scores are most indicative for the next day of trading (a Monday), but they appear to set the general tone for the next week.

The methodology employed is based on this peer reviewed academic article, which produced 550%+ results in back tests over a 2 year time frame. We consider 4 and 5 scores to be positive, but please bear in mind that the AI model is still in its validation phase.

-The Research Team: Dom Viera, Samantha Russell, Nicole Zinuhova, Michelle Milan

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-The 1.2 Labs Team

DISCLAIMERS

This newsletter is provided for educational and entertainment purposes only. Robin Technologies and Analytics LLC is the firm that distributes The Art of The Bubble products. The firm does not provide individually tailored investment advice and does not take a subscriber’s or anyone’s personal circumstances into consideration when discussing investments; nor is Robin Technologies and Analytics LLC registered as an investment adviser or broker-dealer in any jurisdiction.

You should expect no financial returns one way or another based on the statements contained herein. These points hold equally for any statements that could be attributed to The Art of The Bubble, 1.2 Labs, or any related business entities or personnel operating in association with Robin Technologies and Analytics LLC. If you decide to buy or invest in anything, then your returns and potential losses are your own. No statements about taxation are taxable advice and you are encouraged to consult your own tax professional. No statements about laws are legal advice and you are encouraged to consult your own professional legal counsel. You are finally also encouraged to do your own due diligence before investing in anything consulting with appropriate professionals as needed.

Benchmarks and Data Sources

All data not otherwise specified (or obvious from context) is taken from TradingView.com.

The cryptocurrency benchmark used is an equally weighted mix of BTC and ETH. While the benchmark for stocks used is the Nasdaq 100.

Conflicts of Interest

All contributors to this newsletter should be considered active investors. Because the strategies pursued are often quick, contributors may or may not own the stocks or coins discussed by the time of reading. However, readers should assume that any coins, stocks, or other items discussed are owned by the contributors for conflict of interest purposes.

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