Lord Fed's Gazette

Lord Fed's Gazette

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Lord Fed's Gazette
The Year Ahead
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The Year Ahead

There will be a landing

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Lord Fed
Jan 01, 2024
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Lord Fed's Gazette
Lord Fed's Gazette
The Year Ahead
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What a year! Following a triple-digit year in ‘22, I returned +65.29% for 2023. The trade of the year was probably my EuroDollar (RIP) trade back in March, in which I captured a ~10 sigma move. For single stocks, it was definitely META 0.00%↑ , which I bought in late 2022 in the low 90s.

2023 Performance… 65.29% vs SPX +24.23%, NDX +53.81

This time last year, I came into the year extremely bearish. Only to flip bullish a few days later after realising I was completely wrong. Oh, how right was I to do that… I don’t think 2023 was necessarily the easiest year to trade; I did not call that end-of-year rally well at all. The good news of 2023? The US didn’t enter a recession despite everyone and their dog calling for it. Talking about consensus… did that China bid ever appear?

Much to everyone’s surprise, the US has remained resilient, considering the sharpest tightening crusade in 40 years. The UK and Europe are not in a similar situation, with Germany the weakest economy (YoY) in the G7. Both are soon to enter recession and with the UK having the faster transmission mechanism, will probably enter first. (BOE still remains dovish-ish, though).

2023 was the Nasdaq-100's best year since 1999, driven by two big themes - quality and AI. MAGMAN stocks added ~$5T of mkt cap in 2023. But now, as we turn the page onto the next chapter… we enter a year with geopolitical volatility at its highest point in a very long time, with several elections to come (in countries contributing to 41% of the world’s population, 42% of global GDP), and central banks looking to start cutting rates.

Leaving 2023, the highest conviction trade I have on is long 20yr at 4.99% (912810TU2).


If you’re looking for a downside trade for 2024, here’s one

Sell the Dec24 5200/5000 call spread for -96, to fund a Dec24 4500/4000 put spread which costs 76. Px Ref -20.

(The put spread purchase is optional, I prefer selling upside but will be doing both legs)


Charts…

The Levels Chart
The Year in a Nutshell

Let’s unearth some opportunities…

<GO>

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