Market Musings: Unraveling the Threads from Fiscal Negotiations to Tech Sector Resurgence

4 min read

Federal Budget Update:

  • The White House and GOP nearing a two-year federal budget agreement.
  • Proposed deal includes a 3% increase in defense spending next year.
  • Renewable energy initiatives and fossil fuel projects would receive more support and expedited permitting.
  • A $10 billion reduction from IRS’s recent budget enhancement of $80 billion proposed.
  • No resolution yet on spending cap disagreement.
  • Treasury’s cash reserve dwindled to December 2021 low of $49.5 billion this Wednesday.

Economic Overview:

  • Q1 GDP figures reveal a 1.3% expansion, exceeding initial forecasts of 1.1%.
  • Surge in consumer spending primarily drove the uptick, with a downturn in inventory investment.
  • Adjusted GDP price index and core PCE prices read 4.2% and 5.0%, respectively.

Employment Data Revision:

  • Recent data modifications show ~171,000 fewer initial jobless claims reported over the last three months than anticipated.
  • Upcoming Friday jobs report may reveal stronger labor market, possibly pressuring the Fed to hike interest rates.

Wall Street Outlook:

  • Savita Subramanian of BofA raised her S&P 500 index price target from 4,000 to 4,300, suggesting an upper limit of 4,600.
  • Andrew Slimmon of Morgan Stanley concedes S&P could surpass his 4,200 aim and reach approximately 4,600 by year’s end.

JPMorgan Developments:

  • JPMorgan to reduce ~15% of the workforce (~1,000 employees) of its recently acquired entity, First Republic.
  • Bank developing AI-driven investment advisory product, IndexGPT, using generative pre-trained transformer (GPT) models.
  • IndexGPT will select securities “customized to customer needs”.

Mutual Funds & Hedge Funds:

  • Mutual funds started Q1 underweight on many stocks that led this year’s surge.
  • Cash being channeled into Big Tech as long-only funds approach their cash limits.
  • Hedge funds raised allocations to tech stocks from 9.7% to 15.5% of overall single-stock net exposure since the year’s start.

OPEC+ Meeting:

  • OPEC+ to discuss oil production quantities next week.
  • Saudia Arabia contemplating production cuts, while Russia believes no immediate modifications required.
  • Concerns about a potent USD and fears of sluggish demand growth, primarily from China, pose challenges for oil pricing.

Market Highlights:

  • Marvell Technology ($MRVL) exceeded expectations with $0.31 EPS (vs. $0.29 expected) and $1.32 billion in sales (vs. $1.3B expected).
  • Marvell’s stock jumped +16% in after-hours trading as it projected AI revenue to at least double this year and again in FY2024.
  • Costco ($COST) fell short of expectations with $2.93 EPS (vs. $3.30 expected) and $53.65 billion in sales (vs. $54.66 billion expected).
  • Despite a 4.8% global (3.5% in the US) rise in foot traffic, Costco’s average ticket fell 4.2% (3.5% in the US), and e-commerce sales dropped 10% YoY.

To appreciate the logic going into our analysis, and to grow your investment, consider Portfolio Flagship managed account.

Safe Trading
Team of Elite CurrenSea


Latency, News and MomentumPromo
Yearly Target:
Learn More
Historical Drawdown:
Min. Deposit:
Asset Types:
Forex, Index, Commodities
Presented by
Chris Svorcik
Verified on:


Leave a Reply


This site uses Akismet to reduce spam. Learn how your comment data is processed.

Notify of