A shortened holiday week which fortunately felt a bit less volatile in the markets, but not on the news flow side. Many consequential data points, but tying a cohesive narrative through them might be a bit of a stretch.

Nonetheless, we are going to give it a shot!

RRP’s

We start with the tweet that surprised nobody but traditional media could not help but focus on.

Whether the President can actually do this is yet to be seen, please note last week we mentioned that the path for such a move may have been paved with the recent SCOTUS decision.

This chart caught our eye this week, which we will explain if you indulge us briefly.

With a little help from Google, the definition of Reverse repurchase agreements:

The most significant point above we think is at the very bottom, “if the Fed conducts fewer reverse repos, it increases the money supply, potentially leading to lower interest rates.”

The chart above shows the level activity is certainly headed in the right direction, so we wonder if Chairman Powell is in fact trying to get ahead of further tweets like the one above?

GDP

The great GDP debate continues. The battle between the Atlanta and New York Fed estimating the Q1 US GDP continues. The race ends April 30, 2025.

Presently the NY Fed is predicting the Q1 US GDP at 2.59% growth.

The Atlanta folks on the other hand see it below 0.

Regardless of which branch of the Federal reserve is correct, this is backward looking data.

We think more recent anecdotal data is piling up in favor of Atlanta.

Chinese purchases of American oil are down -90% Y/Y, while Chinese purchases of Canadian oil are up +700% Y/Y.
That’s a $20B annual loss for the United States at $60/barrel.

Home builders are beginning to show signs of cracking. DR Horton, America’s largest builder, just reported a 15% YoY contraction in sales orders. The largest contractions happened in the Southwest / Southeast, where sales dropped nearly 25%. A slowdown of this magnitude is a sign of decreasing consumer confidence and an oversupply of housing in America’s Sun Belt.

Which combined with this tweet:

Does not give one the warm and fuzzies around the residential home market.

Recent shipping metrics, obviously not included in the backward looking Q1 GDP, have been falling off the ship.

Which will have quite the future impact on the domestic trucking industry.

But, it’s not just goods, its people too!

As we have presented before, the potential for a slower economy is manifesting itself in surveys, or the so called “soft data”.

Expectations and Sentiment direct from U of M website:

https://www.sca.isr.umich.edu/charts.html

And this final chart sums it up the best, people across the earnings spectrum are simply not feeling good about the future, and that effects everyone’s’ spending habits.

Analysts are consumers as well, and we think this chart shows they sense, expect, feel it as well?

Citibank Earnings Revision Index

So, the NY Fed may be more accurate for the call April 30^th, due to rear view mirror ability, but keeping one eye on the Atlanta peeps might serve investors well.

VIX

A good argument for putting $$ to work when the VIX Index goes north of 50?

We think an argument can be made that most of the data is heavily skewed to GFC and Covid, but heck the math is the math!

Jamie & Mark

Considering his age and amazing career we think it inevitable that there will be more posts like this in the future.

So, it made us wonder what his record of selling looks like.

We went through a rigorous methodical process to determine, he’s pretty good at this buying and selling stuff.


We would like to leave you with this, it’s a post from Mark Cuban. Rare to see him agree with POTUS, but for all our sake’s we hope they collaborate!

https://x.com/mcuban/status/1912628036668739778 

Here is the opening quotation:

Earnings next week:

TMT

1. Alphabet (GOOGL) Thu, Apr 24
2. Tesla Inc (TSLA) Tue, Apr 22
3. T-Mobile (TMUS) Thu, Apr 24
4. IBM (IBM) Wed, Apr 23
5. AT&T (T) Wed, Apr 23
6. SAP SE (SAP GR) Tue, Apr 22
7. SK Hynix (000660 KS) Thu, Apr 24
8. Verizon (VZ) Tue, Apr 22
9. ServiceNow (NOW) Wed, Apr 23
10. Texas Instrument (TXN) Wed, Apr 23
11. Comcast (CMCSA) Thu, Apr 24
12. Fiserv (FI) Thu, Apr 24
13. Lam Re (LRCX) Wed, Apr 23
14. Intel (INTC) Thu, Apr 24
15. Charter (CHTR) Fri, Apr 25
16. Fair Isaac (FICO) Fri, Apr 25
17. MSCI Inc (MSCI) Tue, Apr 22
18. Tyler Techn (TYL) Wed, Apr 23
19. VeriSign Inc (VRSN) Thu, Apr 24
20. SS&C Techn (SSNC) Thu, Apr 24
21. Manhattan Assoc (MANH) Tue, Apr 22
22. CACI Intl (CACI) Wed, Apr 23
23. Interpublic Group (IPG) Thu, Apr 24
24. Roku Inc (ROKU) Fri, Apr 25
25. Appfolio Inc (APPF) Thu, Apr 24
26. Pegasystems (PEGA) Tue, Apr 22
27. Silicon Lab (SLAB) Thu, Apr 24
28. Iridium C (IRDM) Tue, Apr 22
29. Impinj Inc (PI) Wed, Apr 23
30. Dassault Syst (DSY FP) Thu, Apr 24
31. Nokia Oyj (NOKIA FH) Thu, Apr 24
32. Check Point (CHKP) Wed, Apr 23
33. STMicro (STMPA FP) Thu, Apr 24
34. Rogers (RCI/B CN) Wed, Apr 23
35. Mobileye (MBLY) Thu, Apr 24

Homebuilders

1. NVR Inc (NVR) Tue, Apr 22
2. PulteGroup (PHM) Tue, Apr 22
3. Taylor Morrison (TMHC) Wed, Apr 23
4. Meritage (MTH) Wed, Apr 23
5. M/I Homes (MHO) Wed, Apr 23
6. Tri Pointe Home (TPH) Thu, Apr 24
7. Century C (CCS) Wed, Apr 23

Travel Leisure

1. United Rentals (URI) Wed, Apr 23
2. Las Vegas Sand (LVS) Wed, Apr 23
3. Southwest Air (LUV) Thu, Apr 24
4. Churchill Down (CHDN) Wed, Apr 23
5. American Air (AAL) Thu, Apr 24
6. Alaska Air (ALK) Wed, Apr 23
7. Boyd Gaming (BYD) Thu, Apr 24
8. SkyWest Inc (SKYW) Thu, Apr 24
9. Travel + Leisure (TNL) Wed, Apr 23
10. Harley-Davidson (HOG) Fri, Apr 25
11. Monarch Casino (MCRI) Tue, Apr 22

Consumers

1. Procter & Gamble (PG) Thu, Apr 24
2. Philip Morris (PM) Wed, Apr 23
3. PepsiCo Inc (PEP) Thu, Apr 24
4. O’Reilly Auto (ORLY) Wed, Apr 23
5. Colgate-Palmolive (CL) Fri, Apr 25
6. Moody’s Corp (MCO) Tue, Apr 22
7. Chipotle Mexican (CMG) Wed, Apr 23
8. Keurig Dr Pepper (KDP) Thu, Apr 24
9. Kimberly-Clark (KMB) Tue, Apr 22
10. Equifax Inc (EFX) Tue, Apr 22
11. Rollins Inc (ROL) Wed, Apr 23
12. Tractor Supply (TSCO) Thu, Apr 24
13. Watsco Inc (WSO) Wed, Apr 23
14. Genuine Parts (GPC) Tue, Apr 22
15. TransUnion (TRU) Thu, Apr 24
16. Avery Dennison (AVY) Wed, Apr 23
17. Pool Corp (POOL) Thu, Apr 24
18. LKQ Corp (LKQ) Thu, Apr 24
19. Allison Transm (ALSN) Fri, Apr 25
20. Lithia Motor (LAD) Wed, Apr 23
21. Hasbro Inc (HAS) Thu, Apr 24
22. Skechers USA (SKX) Thu, Apr 24
23. ADT Inc (ADT) Thu, Apr 24
24. AutoNation (AN) Fri, Apr 25
25. FTI Consulting (FCN) Thu, Apr 24
26. Group 1 Auto (GPI) Thu, Apr 24
27. Gentex Corp (GNTX) Fri, Apr 25
28. Darling Ingr (DAR) Thu, Apr 24
29. Robert Half Inc (RHI) Fri, Apr 25
30. Whirlpool (WHR) Wed, Apr 23
31. CBIZ Inc (CBZ) Fri, Apr 25
32. TriNet Group (TNET) Fri, Apr 25
33. Boston Beer (SAM) Thu, Apr 24
34. Tootsie Roll (TR) Thu, Apr 24
35. Visteon Corp (VC) Thu, Apr 24

Basic Materials

1. Southern Copper (SCCO) Fri, Apr 25
2. Newmont (NEM) Wed, Apr 23
3. Agnico Eagle (AEM CN) Thu, Apr 24
4. Freeport (FCX) Thu, Apr 24
5. Vale SA (VALE3 BZ) Thu, Apr 24
6. Dow Inc (DOW) Thu, Apr 24
7. LyondellBasell (LYB) Fri, Apr 25
8. Steel Dynamic (STLD) Tue, Apr 22
9. Teck Resources (TECK/B CN) Thu, Apr 24
10. Reliance Inc (RS) Wed, Apr 23
11. First Quantum (FM CN) Wed, Apr 23
12. Eastman Chem (EMN) Thu, Apr 24
13. Carpenter Techn (CRS) Thu, Apr 24
14. NewMarket (NEU) Wed, Apr 23
15. Balchem Corp (BCPC) Thu, Apr 24
16. Element Solution (ESI) Wed, Apr 23
17. Sensient Techn (SXT) Fri, Apr 25
18. Minerals Techn (MTX) Thu, Apr 24
19. Vedanta Ltd (VEDL IN) Fri, Apr 25
20. UPM-Kymmene Oyj (UPM FH) Thu, Apr 24
21. Akzo Nobel NV (AKZA NA) Wed, Apr 23
22. Boliden AB (BOL SS) Wed, Apr 23
23. Yara Intl ASA (YAR NO) Fri, Apr 25

Energy

1. Schlumberger NV (SLB) Fri, Apr 25
2. Phillips 66 (PSX) Fri, Apr 25
3. Baker Hughes (BKR) Tue, Apr 22
4. Valero Energy (VLO) Thu, Apr 24
5. EQT Corp (EQT) Tue, Apr 22
6. Halliburton (HAL) Tue, Apr 22
7. Hess Midstream (HESM) Fri, Apr 25
8. Range Resources (RRC) Tue, Apr 22
9. Enphase Energy (ENPH) Tue, Apr 22
10. Matador Res (MTDR) Wed, Apr 23
11. ChampionX (CHX) Thu, Apr 24
12. CNX Resources (CNX) Thu, Apr 24
13. Whitecap Res (WCP CN) Wed, Apr 23
14. Weatherford (WFRD) Tue, Apr 22
15. Patterson-UTI (PTEN) Wed, Apr 23
16. Oceaneering (OII) Wed, Apr 23
17. Advantage Energy (AAV CN) Fri, Apr 25
18. RPC Inc (RES) Thu, Apr 24
19. Helix Energy (HLX) Wed, Apr 23

Insurers

1. Hartford Insurance (HIG) Thu, Apr 24
2. W R Berkley (WRB) Mon, Apr 21
3. Erie Indemnity (ERIE) Thu, Apr 24
4. Kinsale Capital (KNSL) Thu, Apr 24
5. Old Republic Intl (ORI) Thu, Apr 24
6. RLI Corp (RLI) Wed, Apr 23
7. First American Fi (FAF) Wed, Apr 23
8. Selective Insurance (SIGI) Wed, Apr 23
9. Goosehead Insurance (GSHD) Wed, Apr 23
10. Stewart Info (STC) Wed, Apr 23

REITs

1. Digital Realty (DLR) Thu, Apr 24
2. Weyerhaeuser Co (WY) Thu, Apr 24
3. Gaming and Leisure (GLPI) Thu, Apr 24
4. Healthpeak Prop (DOC) Thu, Apr 24
5. Equity LifeStyle (ELS) Mon, Apr 21
6. Agree Realty (ADC) Tue, Apr 22
7. EastGroup Prop (EGP) Wed, Apr 23
8. AGNC Investment (AGNC) Mon, Apr 21
9. Essential Prop (EPRT) Wed, Apr 23
10. Rithm Capital (RITM) Fri, Apr 25
11. Phillips Edison (PECO) Thu, Apr 24
12. Curbline Prop (CURB) Thu, Apr 24
13. Getty Realty (GTY) Wed, Apr 23
14. Veris Residential (VRE) Wed, Apr 23
15. Ladder Capital (LADR) Fri, Apr 25
16. Alexander & Baldwin (ALEX) Thu, Apr 24
17. Apollo R Est (ARI) Thu, Apr 24
18. ARMOUR Resi (ARR) Fri, Apr 25
19. Dynex Capital (DX) Mon, Apr 21
20. PennyMac M (PMT) Tue, Apr 22

Financials

1. CME Group (CME) Wed, Apr 23
2. Capital One (COF) Tue, Apr 22
3. Ameriprise (AMP) Thu, Apr 24
4. Nasdaq Inc (NDAQ) Thu, Apr 24
5. Discover Fi (DFS) Wed, Apr 23
6. CBRE Group (CBRE) Thu, Apr 24
7. Raymond James (RJF) Wed, Apr 23
8. First Citizens B (FCNCA) Thu, Apr 24
9. Chubb Ltd (CB) Tue, Apr 22
10. BNP Paribas SA (BNP FP) Thu, Apr 24
11. Aon PLC (AON) Fri, Apr 25
12. Synchrony (SYF) Tue, Apr 22
13. Northern Trust (NTRS) Tue, Apr 22
14. Principal Fincl (PFG) Thu, Apr 24
15. East West Banc (EWBC) Tue, Apr 22
16. SEI Investments (SEIC) Wed, Apr 23
17. Stifel Financial (SF) Thu, Apr 24
18. SouthState Corp (SSB) Thu, Apr 24
19. Webster Fincl (WBS) Thu, Apr 24
20. Western Alliance (WAL) Mon, Apr 21
21. Mr Cooper Group (COOP) Wed, Apr 23
22. Comerica Inc (CMA) Mon, Apr 21
23. Wintrust Financial (WTFC) Mon, Apr 21
24. Zions Bancorp (ZION) Mon, Apr 21
25. Prosperity Banc (PB) Wed, Apr 23
26. Old National Banc (ONB) Tue, Apr 22
27. Virtu Financial (VIRT) Wed, Apr 23
28. BOK Financial (BOKF) Mon, Apr 21
29. Invesco Ltd (IVZ) Tue, Apr 22
30. SLM Corp (SLM) Thu, Apr 24
31. Columbia Banking (COLB) Thu, Apr 24
32. Valley National B (VLY) Thu, Apr 24
33. Glacier Bancorp (GBCI) Thu, Apr 24
34. AllianceBernstein (AB) Thu, Apr 24
35. Piper Sandler Cos (PIPR) Fri, Apr 25

HCare

1. AbbVie (ABBV) Fri, Apr 25
2. Sanofi SA (SAN FP) Thu, Apr 24
3. Merck (MRK) Thu, Apr 24
4. Intuitive Surgical (ISRG) Tue, Apr 22
5. Thermo Fisher (TMO) Wed, Apr 23
6. Boston Scientific (BSX) Wed, Apr 23
7. Danaher Corp (DHR) Tue, Apr 22
8. Gilead (GILD) Thu, Apr 24
9. Bristol-Myers (BMY) Thu, Apr 24
10. Elevance Health (ELV) Tue, Apr 22
11. HCA Health (HCA) Fri, Apr 25
12. Edwards Life (EW) Wed, Apr 23
13. ResMed Inc (RMD) Wed, Apr 23
14. Centene Corp (CNC) Fri, Apr 25
15. Quest Diagnostic (DGX) Tue, Apr 22
16. Molina Health (MOH) Wed, Apr 23
17. West Pharma (WST) Thu, Apr 24
18. BioMarin Pharm (BMRN) Thu, Apr 24
19. Penumbra Inc (PEN) Wed, Apr 23
20. Avantor Inc (AVTR) Fri, Apr 25
21. Encompass Health (EHC) Thu, Apr 24
22. Medpace Holding (MEDP) Mon, Apr 21
23. Chemed Corp (CHE) Wed, Apr 23
24. Merit Medical (MMSI) Thu, Apr 24
25. Integer Holding (ITGR) Thu, Apr 24
26. PTC Therapeutics (PTCT) Fri, Apr 25
27. Amedisys Inc (AMED) Thu, Apr 24
28. PROCEPT Bio (PRCT) Thu, Apr 24
29. Viking Thera (VKTX) Thu, Apr 24
30. Kiniksa Pharma (KNSA) Wed, Apr 23
31. PACS Group (PACS) Wed, Apr 23
32. Teladoc Health (TDOC) Fri, Apr 25

AeroSpace/Defense

1. General Electric (GE) Tue, Apr 22
2. RTX Corp (RTX) Tue, Apr 22
3. Boeing Co (BA) Wed, Apr 23
4. Lockheed Martin (LMT) Tue, Apr 22
5. Northrop (NOC) Tue, Apr 22
6. General Dynamic (GD) Wed, Apr 23
7. L3Harris (LHX) Thu, Apr 24
8. Textron Inc (TXT) Thu, Apr 24
9. Moog Inc (MOG/A) Fri, Apr 25

Industrials

1. Union Pacific (UNP) Thu, Apr 24
2. GE Vernova (GEV) Wed, Apr 23
3. Amphenol (APH) Wed, Apr 23
4. Republic Services (RSG) Thu, Apr 24
5. 3M Co (MMM) Tue, Apr 22
6. Carrier Global (CARR) Fri, Apr 25
7. Norfolk South (NSC) Wed, Apr 23
8. Otis Worldwide (OTIS) Wed, Apr 23
9. Old Dominion (ODFL) Wed, Apr 23
10. Westinghouse Air (WAB) Wed, Apr 23
11. Vertiv Holding (VRT) Wed, Apr 23
12. Dover Corp (DOV) Thu, Apr 24
13. Teledyne Tech (TDY) Wed, Apr 23
14. Lennox Intl (LII) Wed, Apr 23
15. Packaging Corp (PKG) Tue, Apr 22
16. Carlisle Co (CSL) Wed, Apr 23
17. Graco Inc (GGG) Wed, Apr 23
18. Masco Corp (MAS) Wed, Apr 23
19. Comfort System (FIX) Fri, Apr 25
20. Saia Inc (SAIA) Fri, Apr 25
21. Mueller Inds (MLI) Wed, Apr 23
22. Knight-Swift (KNX) Wed, Apr 23
23. Ryder System (R) Wed, Apr 23
24. Valmont Inds (VMI) Tue, Apr 22
25. GATX Corp (GATX) Wed, Apr 23
26. Zurn Water (ZWS) Tue, Apr 22
27. Hexcel Corp (HXL) Mon, Apr 21
28. Plexus Corp (PLXS) Wed, Apr 23
29. OSI System (OSIS) Fri, Apr 25
30. AZZ Inc (AZZ) Mon, Apr 21
31. Terex Corp (TEX) Fri, Apr 25
32. Hub Group (HUBG) Fri, Apr 25
33. Knowles Corp (KN) Thu, Apr 24
34. Tutor Perini (TPC) Fri, Apr 25
35. Apogee Ent (APOG) Thu, Apr 24

Utilities

1. NextEra Energy (NEE) Wed, Apr 23
2. Xcel Energy (XEL) Thu, Apr 24
3. PG&E Corp (PCG) Thu, Apr 24
4. Entergy Corp (ETR) Thu, Apr 24
5. DTE Energy (DTE) Fri, Apr 25
6. CenterPoint (CNP) Thu, Apr 24
7. FirstEnergy (FE) Wed, Apr 23
8. CMS Energy (CMS) Thu, Apr 24
9. Portland Gen (POR) Fri, Apr 25

Have a wonderful holiday weekend!

Best,

Meraki Trading Team

---

About Meraki Global Advisors

Meraki Global Advisors is a leading outsourced trading firm that eliminates investment managers’ implicit and explicit deadweight loss resulting from inefficient trading desk architectures. With locations in Park City, UT and Hong Kong, Meraki’s best-in-class traders provide conflict-free 24×6 global trading in every asset class, region, and country to hedge funds and asset managers of all sizes. Meraki Global Advisors LLC is a FINRA member and SEC Registered and Meraki Global Advisors (HK) Ltd is licensed and regulated by the Securities & Futures Commission of Hong Kong.

For more information, visit the Meraki Global Advisors website and LinkedIn page
Contact:
Mary McAvey
VP of Business Development

Where to start after a week like that?

When market volatility explodes there is no shortage of content floating around. We thought going back to some simple basic charts for perspective might be helpful.

The $ has now round tripped its election move.

The 10yr TSY.

Adding HRH, Historical Return Histogram below as well, to show magnitude of recent moves.

The VIX Index. With the introduction of ODTE options, some could argue the importance of this fear gauge has been slightly diminished, but we certainly think its still worth watching.

Goldman Sachs Financial Conditions Index. Unfortunately, there is still room for this Index to move higher, and thus financial conditions could certainly still get tighter from here.

High Yield & CDS

Bloomberg US Corporate High Yield Average OAS

Surpassing August 2024 highs.

CDX HY CDSI GEN 5Y SPR:

As shown above both indices appear to be breaking from a down trend.

Hard to believe that Nonfarm Payroll release would take a back seat to any market impactful news, but today it most certainly did. Along with the Nonfarm payroll release come Hourly earnings metrics.

We wanted to look into the relationship between the Average Hourly earnings YoY and the Federal Reserve’s choice inflationary measure, Core PCE YoY.

Respective charts:

If we make the above 2 metrics a ratio, AHE YoY – PCE CYoY, we will generate the below chart in the top panel.

If the declining trend in average hourly wage growth continues the white line will continue moving lower. A concern is that the Core PCE is expected to move higher at the same time, most likely driving the white line down to or below 0. As shown above, when this ratio dips below that level, the Forward multiple on the SPX settles in somewhere between 12 and 17X usually. Still a long way from the most recent level of close to 21X.

Goldman Sachs addresses the impact of lower multiples as well in their scenario metric below.

This week’s impact on the Fed futures market.

Looking at the 12/10/2025 meeting below, it suggests 3 cuts as of Monday, March 31^st.

Fast forward to today, Friday, April 4^th that number moves to 4+ cuts now.

Chairmen Powell just finished speaking at a schedule engagement a little while ago. His message was simple: the Fed is in a great spot to sit back and see what happens with the tariff impact AND THEN determine what action to take.

Well, as shown by the WIRP page above, the market is starting to think differently.

There has always been a belief that the Fed follows the direction of the 2yr TSY, if it moves to far away from the Fed Funds rate, eventually the Fed must simply catch up.

Well, below we chart this thesis. The top panel has both the 2yr TSY and the Fed Funds rate. The middle panel contains the spread of those 2 constituents. The bottom panel contains the 10yr TSY.
If the 2yr TSY continues to move lower, it would seem reasonable to assume the Fed will have to follow.

Have a great weekend!

Best,

Meraki Trading Team

---

About Meraki Global Advisors

Meraki Global Advisors is a leading outsourced trading firm that eliminates investment managers’ implicit and explicit deadweight loss resulting from inefficient trading desk architectures. With locations in Park City, UT and Hong Kong, Meraki’s best-in-class traders provide conflict-free 24×6 global trading in every asset class, region, and country to hedge funds and asset managers of all sizes. Meraki Global Advisors LLC is a FINRA member and SEC Registered and Meraki Global Advisors (HK) Ltd is licensed and regulated by the Securities & Futures Commission of Hong Kong.

For more information, visit the Meraki Global Advisors website and LinkedIn page
Contact:
Mary McAvey
VP of Business Development

Fed Meeting

The Federal Reserve convened their scheduled March meeting this week. There were no expectations for any action to be taken, so the focus was largely on the commentary post the conclusion. We prefer to focus on one of the main outcomes, the DOT plot.

The cluster of red under 2025 at the 3.75 level moving lower to 3.25 and now blue appears to be the most significant move.

That move makes sense to us considering the Committee lowered their year end GDP forecast from 2.1% growth to 1.7%. As well as raise their year end unemployment forecast from 4.3% to 4.4%.
But, the Committee also raised their year end PCE forecast from 2.5% to 2.8%.

So, slower growth but higher prices/inflation?

From the difference in direction 2 of the forecasts are headed above one could see how the Committee is concerned about risks to both of their mandates.

But are their concerns really 2 ways?

The SEP, or Summary of Economic Projections, completed quarterly, shows something a bit different. 18 of the 19 responses to the SEP see upside inflation risks. “The risk weighted core pce diffusion index (number of members see upside minus those who see downside, divided by total) is even more skewed toward upside than June 2022 (peak inflation).”
Translation, the committee appeared to be more concerned with the threat of inflation than they were in 2022 when they hiked by 75bps.

These hard numbers do not seem to jive exactly with Chairmen Powell’s representation of the FOMC stance during the press conference. But the Chairman is politically savvy, and maybe, just maybe, presenting the FOMC stance in such a manner is to help prevent any White House irritability ahead of time?

Unemployment

Oddly enough, the present stance of the FOMC might become justified if some of the existing concerns begin to come to fruition out there regarding unemployment levels rising. With much media focus on the new Department of Government Efficiency, many feel those levels rising are inevitable. As of now though, the numbers do not seem to bear that thesis out.

Government employee’s unemployment claims are classified separately from the individual state data.

Recently they did move meaningfully higher.

But in the grand scheme of things.

There could simply be procedural delays that are accounting for the lack of response, but as of right now it does not look concerning.

So, we thought we would look at the state numbers for non-government employee claims in the surrounding area of the capital.

There is some movement, but nothing jarring, yet.

Longer term view for perspective.

Delinquencies & Rejections

Somewhat of concern if those unemployment numbers do to begin to move higher is the state of the consumer. We have addressed debt levels and their associated costs to the consumer previously but wanted to look at the same issue from a different angle this week. The NY Fed website can offer a vast array of data surrounding the consumer, including rejection rates. Many of these charts are headed in the wrong direction.

As for delinquency data, missing auto payments are starting to be of concern.

Which brings us to the ultimate measure of consumer health, emergency savings. Although the present level should be considered healthy, the delta is headed in the wrong direction, and combined with any employment shock could spell trouble for the consumer’s health.

GDP Estimates

This is partially tongue in cheek, but one would think communication between Atlanta Fed peeps and NY Fed peeps should not be that hard. Granted we are familiar with the volatility of the Atlanta data, but still, they all work for the same department don’t they?

Atlanta is looking for -1.8% Q1 GDP presently.
But NY on the other hand is looking for +2.72% Q1 GDP growth.

With a spread like this, we are surprised the likes of Fan Duel or Draft Kings is not getting in on the action.

US CDS

Finally, we noticed a little pick up in the US Sovereign Credit Default Swap chart this week. Nothing to be concerned with, but we would like to point out that it looks to have broken its 3- year down trend.

Just sayin….

Earnings next week.

• BYD Co Ltd (BYDDY) Mon, Mar 24
• Cintas Corp (CTAS) Wed, Mar 26
• Paychex (PAYX) Wed, Mar 26
• Lululemon (LULU) Thu, Mar 27
• Kuaishou (KSHTY) Tue, Mar 25
• McCormick (MKC) Tue, Mar 25
• H & M Hennes (HMB SS) Thu, Mar 27
• Next Plc (NXT LN) Thu, Mar 27
• Dollar Tree (DLTR) Wed, Mar 26
• Chewy (CHWY) Wed, Mar 26
• Porsche Auto (PAH3 GR) Wed, Mar 26
• Jefferies (JEF) Wed, Mar 26
• SailPoint (SAIL) Wed, Mar 26
• TD SYNNEX (SNX) Thu, Mar 27
• Crown Holding (CCK) Tue, Mar 25
• GameStop (GME) Tue, Mar 25
• Smithfield Food (SFD) Tue, Mar 25
• Kingfisher Plc (KGF LN) Tue, Mar 25
• KB Home (KBH) Mon, Mar 24
• RH (RH) Thu, Mar 27
• Wynn Macau (1128 HK) Thu, Mar 27
• Oklo Inc (OKLO) Mon, Mar 24
• HB Fuller (FUL) Wed, Mar 26
• AAR Corp (AIR) Thu, Mar 27
• Worthington (WOR) Tue, Mar 25
• Verint System (VRNT) Wed, Mar 26
• Steelcase Inc (SCS) Wed, Mar 26
• Intuitive Mach (LUNR) Mon, Mar 24
• Harrow Inc (HROW) Fri, Mar 28

Have a great weekend!

Best,

Meraki Trading Team

---

About Meraki Global Advisors

Meraki Global Advisors is a leading outsourced trading firm that eliminates investment managers’ implicit and explicit deadweight loss resulting from inefficient trading desk architectures. With locations in Park City, UT and Hong Kong, Meraki’s best-in-class traders provide conflict-free 24×6 global trading in every asset class, region, and country to hedge funds and asset managers of all sizes. Meraki Global Advisors LLC is a FINRA member and SEC Registered and Meraki Global Advisors (HK) Ltd is licensed and regulated by the Securities & Futures Commission of Hong Kong.

For more information, visit the Meraki Global Advisors website and LinkedIn page
Contact:
Mary McAvey
VP of Business Development

Spreads

What may have been the most popular chart of the week, came from the Atlanta Fed.

There is no denying this is a volatile metric, but the extent of the move caught more than a few off guard.

The data seemed to show a vast effort by U.S. businesses to ramp up foreign buying ahead of new tariffs. Economists worried that was a bad sign for U.S. economic growth in the first quarter of 2025, because imports are subtracted from GDP.

Analysts at Goldman Sachs offered a different explanation over the weekend: They think the big pickup in imports is mostly due to a flood of gold bars heading to the U.S., a hot trade that reflects the complex financial market for the precious metal and a split in the prices of gold in London versus New York.”  

If GDP were to be headed for negative future prints we thought taking a look into credit spreads might be warranted.

Are they moving up in anticipation of a slowing economy?

Turns out they are starting to.

That blue line above is the SPX Index inverted.

Longer term view.

As shown above, we are a ways away from spreads being near highs, but it appears there is not a lot of room below from this chart.

Another way to look at spreads is comparing them to shorter dated Treasury paper. Below is Moody’s Corporate BAA Bond Index relative to the 3M TSY, it may be signaling what the Atlanta Fed Now forecast is already saying.

As shown above, when the spread compresses below 1, the color red seems to appear.


Charts

When markets head into rough waters many like to fall back on technical charts for guidance. We thought it worth highlighting a few this week.

The VIX Index. Is it breaking out?

With respect to the VIX Index we saw this interesting back test. From 2005 looking at certain levels of the VIX and the 1 week as well as 1-month average forward returns. As well as the Standard Deviation.

So, if the VIX hits 30, the 1-month average return is 1.6%.

200 Day Moving Averages for SPX and NDX

Momentum Basket relative to the SPY.

The Fear Index, VIX, is up and many major averages are breaking down, as defined by trading below their 200 day Moving Averages. This was highly publicized during the week and could only lead to sentiment indicators turning negative.

For perspective, and yes this is only 1 metric, but the FWD P/E multiples are still elevated. A bit of a messy chart below, but it does show pre and post pandemic multiple levels for NDX, blue line, SPX, green line, and SPW-equal weighted SPX, red line.

Only the SPW Index is back to its pre pandemic levels. The other 2, SPX and NDX,  are still 3 or 4 turns higher.

What is the takeaway from all the above charts, the markets are a bit sloppy right now but its hard to say they are cheap on Fwd. P/E basis.

Inflation or Employment

Should Inflation still be the leading concern of the Federal reserve?

According to a service that tries to dynamically calculate it, it probably should not be.  

https://truflation.com/marketplace/us-inflation-rate 

The employment side of the equation saw a few metrics released this week.

One metric that does not appear above is the Challenger US Job cut announcements.

“Outplacement firm Challenger, Gray & Christmas said Thursday that companies planned to cut 172,017 jobs in February, up sharply from 49,795 in January and 84,638 a year ago, posting the highest monthly total since July 2020 during the pandemic and the highest for February since 2009.

The largest layoff count in February was in the government sector, which accounted for 62,242 of the total due to Department of Government Efficiency actions. The retail sector posted the second largest total for the month with 38,956 cuts.”

The most cited reason for layoffs other than DOGE actions was bankruptcy, which accounted for 35,172 of the totals.

We think the above chart is self-explanatory.


The $

The last chart we wanted to point out is the US $, as tracked by the DXY Index. It has fully round tripped since the presidential election. And, yes, it is also below its 200-day moving average. Simply pointing out the move.

Is the honeymoon over?

Some earnings to keep an eye on next week:

Key TMTs                                                                    

• Oracle Corp (ORCL) Mon, Mar 10    
• Adobe Inc (ADBE) Wed, Mar 12
• DocuSign (DOCU) Thu, Mar 13
• Rubrik Inc (RBRK) Thu, Mar 13
• Ciena Corp (CIEN) Tue, Mar 11
• UiPath Inc (PATH) Wed, Mar 12
• SentinelOne (S) Wed, Mar 12
• Asana Inc (ASAN) Mon, Mar 10
• Semtech (SMTC) Thu, Mar 13
• PagerDuty (PD) Thu, Mar 13
• Phreesia (PHR) Wed, Mar 12

Key Consumers

• Inditex (ITX SM) Wed, Mar 12
• Volkswagen AG (VOW GR) Tue, Mar 11
• BMW Ag (BMW GR) Fri, Mar 14
• Dr Ing Porsche (P911 GR) Wed, Mar 12
• Henkel AG (HEN3 GR) Tue, Mar 11
• Daimler Truck (DTG GR) Fri, Mar 14
• Ferguson Ent (FERG) Tue, Mar 11
• Williams-Sonoma (WSM) Thu, Mar 13
• Viking Holding (VIK) Tue, Mar 11
• Dick’s Sporting (DKS) Tue, Mar 11
• Dollar Gen (DG) Thu, Mar 13
• American Eagle (AEO) Wed, Mar 12
• Kohl’s Corp (KSS) Tue, Mar 11
• Buckle Inc (BKE) Fri, Mar 14
• Ulta Beauty (ULTA) Thu, Mar 13
• Casey’s General (CASY) Tue, Mar 11
• Vail Resorts (MTN) Mon, Mar 10
• Puma SE (PUM GR) Wed, Mar 12
• Korn Ferry (KFY) Tue, Mar 11
• HUGO BOSS (BOSS GR) Thu, Mar 13
• Afya Ltd (AFYA) Thu, Mar 13
• G-III Apparel (GIII) Thu, Mar 13

China ADRs

• Li Auto (LI) Fri, Mar 14
• Futu Holdings (FUTU) Thu, Mar 13
• Kanzhun Ltd (BZ) Tue, Mar 11
• MINISO Group (MNSO) Wed, Mar 12
• WeRide (WRD) Fri, Mar 14
• RLX Tech (RLX) Fri, Mar 14
• Weibo Corp (WB) Thu, Mar 13
• Hesai Group (HSAI) Mon, Mar 10
• EHang Holding (EH) Wed, Mar 12
• Hello Group (MOMO) Wed, Mar 12

Have a wonderful weekend!

Best,

Meraki Trading Team

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About Meraki Global Advisors

Meraki Global Advisors is a leading outsourced trading firm that eliminates investment managers’ implicit and explicit deadweight loss resulting from inefficient trading desk architectures. With locations in Park City, UT and Hong Kong, Meraki’s best-in-class traders provide conflict-free 24×6 global trading in every asset class, region, and country to hedge funds and asset managers of all sizes. Meraki Global Advisors LLC is a FINRA member and SEC Registered and Meraki Global Advisors (HK) Ltd is licensed and regulated by the Securities & Futures Commission of Hong Kong.

For more information, visit the Meraki Global Advisors website and LinkedIn page
Contact:
Mary McAvey
VP of Business Development

Home Prices

In previous pieces we have presented this input of the CPI, the contribution of Shelter. This input accounts for 36.22% of the YoY CPI. The metric has been slowly but steadily moving lower since the Q2 2023.

We saw a few charts this week that led us to believe the trend above will continue and possibly accelerate.

New Home inventory is approaching some high-capacity levels.

There are now 9 times more new homes for sale than the average number of homes sold per month, the highest since 2022, per Reventure. In other words, it would take 9 months for current inventory of new homes on the market to sell given the current sales pace. This ratio is more than 2 TIMES higher than in 2020. In the past, there were only 4 periods when months of supply were higher than they are now with 3 of them being during recessions. Meanwhile, the number of new single-family homes for sale has risen to 494,000, the highest since the 2008 Financial Crisis. Such a large imbalance suggests price cuts may be coming.

On the rental side we noticed this chart.

US rental vacancy rate from ApartmentList has now surpassed July 2020 peak, as of January, now up to 6.85%.

The 2 charts above inspired us to look at the Existing Home Inventory. As many know, there is a definite seasonality to the existing home selling process, so wanted to look at the growth in inventory on that seasonal basis. Turns out the inventory grew in January the most it has since 2019, pre pandemic.

One Housing specialist we follow suggests the delta on home price increases has gone negative as well.

“Home price appreciation was about 4% to end 2024. It’s closer to 2% now nationally. Lots of local markets are negative YoY.”

The 4 preceding examples would seem to indicate that the first chart above will at the very least continue its present trajectory lower, and if more than 1/3 of the CPI input continues with a negative delta, we think it will be pretty tough for the CPI to surprise to the upside in the near future.



China

This past week there has been a bit of a focus on Chinese related equities. Recent 13F filings revealed that more than a few funds have been increasing their exposure to China. Then we saw this headline on Bloomberg:

“Morgan Stanley strategists have turned optimistic on Chinese stocks, recommending an equal weight position and predicting the MSCI China Index to reach 77 by the end of 2025. The strategists cite a “structural regime shift” in China’s equity market, driven by technological breakthroughs, regulatory shifts, and efforts by companies to boost share value. The upgrade follows similar bullish views from other Wall Street firms, including Goldman Sachs, JPMorgan Chase, and UBS, and suggests a fundamental shift in how global investors approach the Chinese market.  Lombard Odier Investment Managers has increased its overweight position in Chinese stocks this year, betting on the country’s successful transition into a new economy focused on high-value tech.” -BBG

The HSI Index closed up 3.8% this week alone.

Considering the filings, the Bloomberg headline made us wonder if this was simply the sell side following the buyside? Tough to say, wouldn’t be the first time.

But then we came across this chart:

Chinese Money supply. Powerful move!

This might explain the moves better than positioning or sell side upgrades?

We were curious about the correlation. Appears it is strongest with the CSI 300, SHSZ300 Index, at .916.

If the .916 correlation holds, should we expect a multiple re-rating on the CSI 300?

Too many variables to know for sure, but we don’t think it would come as a surprise if the multiple were to elevate toward 16, considering the chart above.

Conflicting Charts

A couple of charts we found somewhat conflicting.

According to the BAML Fund Manager survey, Investors see US Equities as overvalued.

89% of Fund managers now believe U.S Equities are overvalued. That is the most since the Dot Com bubble.

But then there is this statistic. Should the S&P 500 finish February higher, that would mean stocks gained in both Jan and Feb. Rest of year? Higher 93.1% of the time and up 12.3% on avg. Full year up nearly 20% on avg.

Hmmmmm…..

Have a great long weekend!

Best,

Meraki Trading Team

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About Meraki Global Advisors

Meraki Global Advisors is a leading outsourced trading firm that eliminates investment managers’ implicit and explicit deadweight loss resulting from inefficient trading desk architectures. With locations in Park City, UT and Hong Kong, Meraki’s best-in-class traders provide conflict-free 24×6 global trading in every asset class, region, and country to hedge funds and asset managers of all sizes. Meraki Global Advisors LLC is a FINRA member and SEC Registered and Meraki Global Advisors (HK) Ltd is licensed and regulated by the Securities & Futures Commission of Hong Kong.

For more information, visit the Meraki Global Advisors website and LinkedIn page
Contact:
Mary McAvey
VP of Business Development