Making Sense

US equities posted a fresh high of 4908 which is the AB=CD completion target ( refer to post from yesterday ) as the Magnificent Seven (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla) continue to pull S&P to fresh record highs and Netflix added 13.10 net new paid subscribers. After the PBoC CRR cut , Risk sentiment improved and U.S Yields were broadly lower. However, post the release of the U.S PMI numbers , US yields surged. The Fed fund pricing moved by 2 bp s with cumulative December rate cuts seen at 135 bps from 137 bps yesterday.  Flash US PMI Composite Output Index at 52.3 prior 50.9 -  7-month high Flash US Services Business Activity Index at 52.9, prior 51.4 -  7-month high Flash US Manufacturing Output Index at 48.7 prior 48.1 -  2-month high Flash US Manufacturing PMI at 50.3 Prior 47.9 -  15-month high Yields High Low Close DoD ▲ US 2Y      ...

Just in, PBOC would cut the CRR by 50 bps from Feb 5 and cut re-lending and re-discount rates interest rates bby 25 bps for the rural sector and small firms from Jan 25.  Overnight, U.S equities continued the trend higher after breaking out of the right-angled triangle. Three targets are in sight for the S&P 500. AB=CD Target of 4908, Right Angled Triangle break out target of 4935 and Trendline resistance close to 5075. If we cross the trendline resistance, then the next meaningful resistance comes in at 5180 which is the 1.27% of the move from 4820 to 3492. The implied market pricing for Fed Fund Rates moved 4 bps lower to 137 bps of cumulative rate cuts and March is now pricing in 12.5 bps of rate cuts. The US2s10s tightened 4.4 bps to 24 bps. Yields High Low Close DoD ▲ US 2Y          4.42          4.37 ...