Does economic data matter?
If you're trading interest rates, then yeah, probably. If you're trading anything else, it's debatable.
A case in point was CPI on Thursday. You may have read commentary that the hot number caused equity markets to sell off.
That's not really what happened.
One number rarely convinces anyone to change their view, so when there was a kneejerk reaction lower to the release from the algorithms, bullish equity traders took the opportunity to buy the dip.
Had the number met expectations and there was no dip, they probably wouldn't have traded and the price would have ended up at roughly the same place at lunchtime.
What caused the market to sell off on Thursday was the the surprise of Bullard talking about a 50bps hike.
Did the CPI number cause Bullard to change his view? Well that's where the debate comes in.
Either way, the continued rise in rates helped our long position in TBF.
It was looking like a very good week for reopening trades until a rumour of an invasion of Ukraine for next week took a lot of the shine off. It is possible that the market was more on edge as a result of the economic data, and that this exacerbated the sell-off. However, our new position in AAL and our old one in CCL finished the week in good shape.
Similarly our sector and 60/40 portfolios were doing reasonably well until giving back gains on Friday, ending roughly flat.
Earnings for DIS were received well, though that position remains slightly underwater due to general skepticism about the streaming sector.
David's trades:
In David's medium-term portfolio (The Money Game) we made no changes this week.
Portfolio | Ticker | Date entered | Entry | Last close | Size |
Medium term | KWEB | 36.54 | 36.56 | 10% | |
Medium term | CNYB | 5.60 | 5.65 | 100% | |
Medium term | DIS | 152 | 149.44 | 100% | |
Medium term | CCL | 20.25 | 22.045 | 50% | |
Medium term | TBF | 16 | 17.06 | 50% |
Closed trades year-to-date = 2
Closed trades that made money = 2
Closed trades that lost money = 0
Closed trades that broke even = 0
An archive of our closed trades is available here.
John's trades
In John's short term portfolio (More Buyers or Sellers) we bought AAL on Monday.
Portfolio | Ticker | Date entered | Entry | Last close | Size |
Short term | NNDM | 4.62 (avg) | 3.79 | 100% | |
Short term | CVNA | 147.80 | 141.35 | 50% | |
Short term | AAL | 16.70 | 17.61 | 100% |
Closed trades year-to-date = 7
Closed trades that made money = 2
Closed trades that lost money = 4
Closed trades that broke even = 1
An archive of our closed trades is available here.
S&P sector portfolio
Sector portfolio relative to SPY: -10bps
Cumulative year-to-date relative to SPY: 61bps
An archive of our closed trades is available here.
60/40 portfolio
60/40 portfolio relative to benchmark: 6bps
Cumulative year-to-date relative to benchmark: 88bps
An archive of our closed trades is available here.
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