Macro

A door plug panel blew out of a Boeing 737 Max 9 operated by Alaska Airlines minutes after takeoff from Portland on 2024-01-05, ripping a hole in the fuselage at 16,000 feet and forcing an emergency landing. The FAA issued an Emergency Airworthiness Directive grounding about 171 Max 9 jets worldwide pending inspections. The incident reignited the quality-control crisis around Boeing and its fuselage supplier Spirit AeroSystems, and disrupted schedules at Alaska Airlines and United, the two main Max 9 operators.

Industrial sector sentiment this month is cautiously positive despite the FAA’s grounding of Boeing 737 Max 9 aircraft, which has weighed on aerospace sentiment. The broader industrial outlook is supported by resilient demand in defense and freight rail, along with steady capital spending in industrial automation, helping offset aviation-related uncertainty. While safety scrutiny on Boeing remains a near-term overhang, underlying fundamentals in core industrial segments reflect stability and selective growth.

Housing stayed frozen as mortgage rates lingered at 6.5-7.5% and sales hit multi-decade lows, while office CRE distress deepened against a wall of maturities; home values held on lock-in scarcity, and the Fed's September cut brought modest hope.

The U.S. SEC approved 11 spot bitcoin ETFs from firms including BlackRock, Fidelity, and Grayscale, marking a pivotal moment for crypto institutionalization. While the move expands regulated access to bitcoin, SEC Chair Gary Gensler emphasized ongoing risks, and market implications include shifting investor dynamics away from crypto-native firms toward traditional financial products.

The finance sector turned modestly bullish this month, driven by the SEC’s landmark approval of 11 spot bitcoin ETFs, a clear signal of institutional integration for crypto assets and expanded product offerings for financial firms. This positive momentum was partially offset by renewed concerns about regional bank stability, sparked by NYCB’s dividend cut, which triggered a broader sell-off in smaller lenders. Overall, regulatory progress in digital assets outweighed localized credit worries, lifting sector sentiment.

BYD overtook Tesla as the world’s biggest seller of electric cars in Q4 2023, delivering a record 525,409 battery-electric vehicles against Tesla’s 484,507. Tesla kept the full-year BEV crown (1.8 million vs 1.57 million), but its lead halved in a year as BYD’s cheaper models scaled at home and abroad. The first quarterly crown change marked the arrival of Chinese makers as the volume leaders of the global EV transition.

The consumer sector this month registers neutral sentiment, weighed by conflicting signals in the electric vehicle space. BYD outselling Tesla underscores sustained demand and competitive strength in EV adoption, supporting sector optimism. However, Hertz’s decision to offload 20,000 EVs and pivot back to internal combustion vehicles signals operational and consumer demand challenges, tempering broader confidence in the transition’s pace.

The IEA forecasts global data center electricity consumption will surge from 460TWh in 2022 to over 1,000TWh by 2026, driven by AI and cryptocurrency workloads. This growth poses significant challenges for energy infrastructure, especially in regions like Ireland and the US, prompting calls for tighter regulations and efficiency innovations. Market implications include rising pressure on power grids and increased investment in cooling tech and renewable integration by operators like Microsoft and Schneider Electric.

The energy sector is trading modestly higher this month despite headwinds from regulatory uncertainty, as the Biden administration’s pause on new LNG export approvals weighs on sentiment. However, underlying strength in global natural gas prices and resilient demand from Asia and Europe are offsetting near-term policy risks. Market focus remains on supply constraints and the potential for delayed project approvals to tighten markets over the medium term.

A euphoric turnaround as the AI data-center load boom repriced us as power plays for the first real demand growth in twenty years, Fed rate cuts revived the yield bid, and nuclear-restart and SMR deals ignited a generation renaissance.

Gold broke out to a string of record highs on central-bank buying and the Fed's rate-cut cycle, copper spiked to a record in May on electrification demand, and precious-metals owners enjoyed a strong, appreciating year.

GLP-1 leaders (Lilly hitting record value) kept me euphoric early, but managed care melted down under Medicare Advantage rate cuts and rising medical costs, the Change Healthcare cyberattack disrupted the system, and Medicare's first negotiated drug prices bit;

AI-driven ad targeting and record political-ad spending powered a strong year; streaming reached profitability and Meta/Alphabet/Netflix led the sector higher. Steadily positive.

A euphoric AI-capex supercycle: Nvidia's blowout earnings added record value and it passed Microsoft as the world's most valuable company ($3.3T); a July megacap rotation, the CrowdStrike outage and the Aug 5 carry-trade selloff were brief wobbles.

Early-year uncertainty from the Congressional Ukraine-aid stall gave way to April's $61B supplemental, and Iran-Israel strikes, the Israel-Hezbollah war and China's Taiwan drills sustained record global demand;