Model down <2% today after a big July… In a late-cycle environment, stick with Quality.

Historic day in volatility Difference between the VIX's intra-day high (65) and close (38) was the highest EVER.

Agree w/ Brent here. I would add to the list of risks the transition of GPUs from a state of scarcity to more abundance based on GPU availability data Fernando Vidal tracks. We wrote about this dynamic and the list of potential market headwinds last month (excerpt below).

Today's reaction to the claims data proves the market jitters were more about recession fears vs 100% yen carry unwind. Discussed below...

New 3Fourteen Research report out to clients. In this edition, we discuss this week's volatility and path ahead. Hard landing vs soft landing view dictates how you approach this correction (defense vs offense).

What happens when: 1) The S&P 500 corrects by 10% AND 2) The Fed cuts within the next three months? On average, market bottoms sometime w/i the next two months ~5-10% below initial selloff low. Return over next 12 months = ~14%. 3Fourteen Research

Last Monday reset sentiment/positioning. However, there is more work to do to signal a durable low that we can trade more aggressively. Here are a few things we are monitoring for clients. 1) Inverse ETF volume - hit a YTD high of 43%...would like to see 50%. 3Fourteen Research

HOUSING SF starts plunged below 70k/month in July. This is the lowest monthly SF start number since spring of last year. Sub-70k SF starts is contractionary and will lead to a reduction in res con payrolls if sustained. In other words, this level is consistent w/ recession.

Despite all of the headline market concerns (seasonality, $NVDA earnings, election), Powell confirmed today that the market equation is straightforward: Inflation is behind us...Growth is everything. Michael Santoli is the best in the business. Thanks for the conversation.

Top Accountability List: Darius Dale 2 Gray Beards Citrini 3Fourteen Research The above have transparent performance & cumulative portfolio PnL over time. It’s not just a collection of trades, which is fine, but not gold the standard. These guys get 🥇from Prometheus.

New 3Fourteen report out to clients. In this edition, Fernando Vidal examines the state of AI capex, explains how he collects GPU availability data, and discusses the implications of a market flipping from scarcity to balance.

The 10-yr yield should hit ~3.5% sometime this fall in a soft landing scenario. W/o recession, little upside remains. However, bonds remain an attractive portfolio diversifier while inflation is dormant and economic uncertainty is elevated. Excerpt 8/1/24 3Fourteen Research note

New report out to 3Fourteen clients updating our housing recession model. For the first time since 2020, both multi-family and single-family housing units under construction are falling simultaneously. W/o an uptick in housing activity, construction job losses are coming.

HOUSING/ECONOMY Mortgage rates peaked at 7.25% in May and have fallen in a straight line to ~6.3%. Yet, mortgage purchase applications have not responded. We expect lower rates to revitalize the market. However, it has not happened yet. 3Fourteen Research

HOUSING/ECONOMY For the first time since 2020, both single-family and multi-family units under construction are falling. This cannot persist w/o triggering construction layoffs. 3Fourteen Research

Great catching up w/ Jon Fortt and Bob Elliott For oil, bounce here but ultimate lows post-election Thank you for the conversation!

Mortgage demand surged 14% last week...👀

FCT Model making new ATHs today...widening its lead over SPX and SPW. Discussed w/ Scott Wapner two weeks ago (below) youtube.com/watch?v=FXhftC…

New report out to 3Fourteen clients. Based on yesterday's SEP, the Fed is guiding to a future with: -200 bps of rate cuts (by end 25), -No recession, and -Stable employment This set of conditions has never coexisted in the U.S. economy.