Markets Weekly February 24, 2024

Hello, my friends. Today is February 24th, and this is Markets Weekly. So this week, I'm going to talk about three things. First, we have to talk about the global surge in equity markets, and of course, NVIDIA earnings that seem to have been a major contributor.

大家好，我的朋友们。今天是2月24日，这里是本周市场。本周我将谈论三件事。首先，我们必须谈谈全球股市的激增，当然，英伟达的收益似乎是一个主要因素。

Secondly, let's talk a little bit about the Fed. So this past week, we got a lot of Fed communications, and it seems like the Fed is going to be marginally more hawkish going forward, but they're still going to cut rates this year.

其次，让我们稍微谈谈美联储。上周，我们收到了许多美联储的沟通，看起来美联储未来将会更加鹰派，但他们仍将在今年降息。

And lastly, let's talk a little bit about private credit. So private credit is a growing asset class, but it's also pretty opaque. This past week, the Fed published some new research on private credit, and let's see what those findings are.

最后，让我们稍微谈一下私人信贷。私人信贷是一个不断增长的资产类别，但也相当不透明。上周，美联储发布了一些关于私人信贷的新研究，让我们看看这些发现是什么。

Starting with equity markets. So heading into this week, the big, big event, of course, was NVIDIA earnings. Over the past few weeks, NVIDIA has absolutely surged and has become a growing component in the major equity indexes and a major contributor to their positive performance year to date.

从股票市场开始。因此，进入本周，当然最大的事件就是英伟达的收益。在过去的几周里，英伟达股价大幅上涨，并成为主要股指中不断增长的组成部分，也是今年迄今为止正收益表现的主要贡献者。

Now, everyone knows that we have this AI thing going on, and NVIDIA is a major benefactor. So NVIDIA earnings are going to be good, but it's always hard to know how the market will react. Is it going to be good enough? And if you look at NVIDIA's options activity, you can see there's a lot of people buying your low calls and a lot of people buying puts and how will those investors react.

现在，每个人都知道我们正在进行人工智能的事情，而NVIDIA是主要受益者。因此，NVIDIA的收益将是不错的，但市场的反应总是很难预测。它是否足够好呢？如果你看看NVIDIA的期权交易活动，你会发现有很多人在购买低点的看涨期权，还有很多人在购买看跌期权，那么这些投资者会作出怎样的反应呢？

So just a few days before, we had another related AI play, super microcomputers tank 20% in one day and heading into NVIDIA's earnings announcement, we also saw its share price leak lower. So at the earnings, it seems like the market really liked what it saw. And so NVIDIA surged over 10% after earnings.

就在几天前，我们又有另一场相关的AI游戏，超级微型电脑股票一天暴跌20%，在英伟达发布财报之前，我们也看到它的股价有所下跌。所以在财报发布时，市场似乎非常喜欢看到的一切。因此，在财报公布后，英伟达股价暴涨超过10%。

If you look at their data center revenues, you can see what might be the cause for that. So NVIDIA's data center business is absolutely booming. Revenues are skyrocketing.

如果你查看他们的数据中心收入，你就能看到可能的原因。所以英伟达的数据中心业务绝对是蓬勃发展的。收入正在飞速增长。

Now I recently heard a really good podcast on a lots with Sam Rines that might explain some of this. So Sam focuses on individual companies looking at things like earnings calls and their financial statements. And he noticed that a lot of companies are trying to increase volumes by investing heavily in advertising.

最近我听了Sam Rines的一个很棒的播客，可能能解释一些这个问题。Sam关注个别公司，查看他们的盈利电话和财务报表等内容。他注意到很多公司都在努力通过大力投资广告来增加销量。

And what that means in practice is that a lot of money is flowing into the big platforms like Facebook and Google. And recall, not too long ago, Facebook had a blowout earnings and their stock rose 20%. So it seems like all these companies, these big tech companies are receiving a lot of advertising revenue and they are reinvesting it in the next big thing, AI.

这在实际操作中意味着大量资金流入像Facebook和Google这样的大型平台。回想一下，不久前Facebook的盈利暴涨，股价上涨了20%。因此，所有这些公司，这些大型科技公司似乎都在获得大量的广告收入，然后将其再投资于下一个大事件，人工智能。

And if you invest in AI, you got to buy a lot of stuff from NVIDIA. So what this earnings announcement, I think, tells the market is that this AI thing, it's for real, it's continuing, and there are some companies that are benefiting hugely from it.

如果你投资人工智能，就得从NVIDIA购买大量的东西。因此，我认为这个收益公告告诉市场的是，人工智能这个领域是真实存在的，它持续发展，并且有一些公司从中获益颇丰。

Now, what the right price for NVIDIA's stock should be, I have no idea. But the market really liked what it saw. And so as NVIDIA stock surged and so the major indexes went up as well. And so we had record highs all across the board in major US equity markets. And if stock markets are making new highs, that's really bullish. But let's not just focus on the US. Let's take a step back and look across the world. In Japan, we have the Nikkei finally, finally making new all-time highs. The last all-time high it made was all the way back in the 1980s. But it looks like the Nikkei is surging into a bull market as well. Now moving to Europe, you can see the Euro stocks also making new all-time highs. So it looks like globally, globally, and most spirits are being unleashed. And maybe the crash up is resuming. We'll find out in the coming weeks. Okay, the next thing I want to talk about is the Fed. So this past week, we had a lot of Fed communication. And it was basically a marginally hawkish. Now, let's actually take a step back and see how things have been evolving.

现在，关于英伟达股票的合适价格是多少，我不清楚。但市场真的很喜欢他们看到的东西。随着英伟达股票的飙升，主要指数也上涨。因此，主要美国股市在各个方面都创下了历史新高。如果股市正在创下新高，这确实是一个利好的迹象。但我们不要只关注美国。让我们退后一步，看看全球的情况。在日本，日经指数最终终于创下了历史新高。它最后一次创下历史新高是在上世纪80年代。但看起来日经指数也在迎来牛市。现在转向欧洲，你会看到欧洲斯托克指数也在创下历史新高。因此，全球范围内，许多持续提升的态势已经释放出来。也许牛市正在复苏。我们会在未来几周发现真相。好的，接下来我想谈谈美联储。在过去的一周，美联储进行了很多沟通，基本上是稍微鹰派的。让我们退后一步，看看事态的演变。

So in December, we got a Fed.plot that guided towards three rate cuts this year. Now, since then, inflation data has basically uniformly come in notably hotter than expected and the economy has done better than expected as well. So they've been some concern as to whether or not that was an aberration or are we just going to re-accelerate and move towards a hotter economy. At the same time, if we look at financial conditions, it seems like they're loosening. So our Korean markets, of course, do well, but also credit spreads are narrowing and so forth. Now, what we heard, well, let's start with Governor Waller, very important. He gave a speech and the title of the speech basically gave it all away. Basically, he's suggesting that he's not in a hurry to cut rates.

所以在去年12月，我们得到了一个美联储的计划，指导今年要降息三次。从那时起，通胀数据基本上都比预期高出很多，经济表现也好于预期。因此，人们开始担心这是否只是一个偏离值，或者我们会重新加速并走向一个更炽热的经济。与此同时，如果我们看一下金融条件，似乎它们正在放松。因此，我们的韩国市场当然表现良好，信贷利差也在缩小等等。现在，我们听到了一些话，让我们从沃尔特州长开始，这非常重要。他发表了一篇演讲，而演讲的标题基本上已经透露了一切。他基本上在暗示他没有着急降息。

Why? That's the case. Well, look at it from the Fed's perspective. On the one hand, full employment and price stability are its mandates. Full employment definitely taken care of, economies doing well, and inflation may potentially be higher than expected. And so what Governor Waller is saying is that the economy is doing well and we have this hot inflation plan in January. So I'm just going to wait for a few more data prints to see how the economy is doing, see how inflation is evolving before I make a decision. So he's not in a hurry to cut rates, but the assumption is that he is going to be cutting rates. Now, we also had an interview from President of the New York Fed, John Williams, who is also a very important person in the Fed. And of course, the title gives it away that he's still thinking about cutting rates and indeed, basically all Fed officials are thinking about cutting rates.

为什么？那就是情况。好吧，从美联储的角度来看。一方面，充分就业和价格稳定是它的使命。充分就业肯定已经得到解决，经济表现不错，通胀可能比预期高。所以沃勒州长所说的是经济表现良好，我们在一月份有这个通胀计划。所以我只是要等一等，看看经济表现如何，看看通胀如何发展，然后再做出决定。因此，他并不急于降息，但假设他会降息。现在，我们还接受了纽约联邦储备银行总裁约翰·威廉姆斯的采访，他也是美联储中非常重要的人物。当然，这个标题已经透露了他仍在考虑降息，实际上，基本上所有美联储官员都在考虑降息。

And if this is surprising to you, then I would really recommend you take a look at my most recent blog post or lay out how the Fed thinks about the world. Now, I would not make a mistake and confuse the Fed's mandate with the equity stock market, just because stock market is surging doesn't mean that's going to that the Fed has the high rates and so forth. The Fed's focus, of course, is full employment and price stability, not how high the S&P 500 is. And indeed, if you look at it historically, there might be some relationship between the stock market and employment and inflation, but it's very obviously not strong. So, John Williams, again, gives you the same view, what he's thinking about the world and, of course, he explicitly noted that hiking rates is not his base case. So, Fed speakers over the past month have basically emphasizing the same thing. They are going to cut rates, but they're not going to be in a hurry to do so. And so, with the Chair Powell taking the march off as a potential to thank for rate cuts, I think the most logical place is probably in June when we have another dot plot. And if you look at market pricing, you can see that market is finally on the same page as the Fed. Now, market is pricing in about three cuts this year. Just a few weeks ago, was it pricing in seven cuts, but it looks like, again, the market has been wrong and is moving towards the Fed's view of the world. Now, one other interesting communication we had the past week was the minutes. Now, in the minutes, again, aside from talking about the path of the overnight rate, the minutes had some interesting information on quantitative tightening.

如果这让你感到惊讶，那么我真的建议你去看一下我最近的博客文章，或者了解一下美联储对世界的看法。现在，我不会犯错并混淆美联储的任务与股权股市，仅仅因为股市上涨并不意味着美联储会高息等等。美联储的重点当然是充分就业和物价稳定，而不是标普500指数有多高。事实上，从历史上看，股市、就业和通胀之间可能存在某种关系，但显然不是很明显。所以，约翰·威廉姆斯再次告诉你，他对世界的看法是一样的，并且他明确指出加息并不是他的基本预期。因此，过去一个月，美联储发言人基本上强调了同样的事情。他们将会降息，但不会急于这样做。那么，鲍威尔主席将三月份作为降息的可能时间，我认为最合乎逻辑的地方可能是六月份，那时我们会有另一个点阵图。如果你看市场定价，你会发现市场最终和美联储达成了一致意见。现在，市场正在预期今年会有大约三次降息。就在几周前，市场预期会有七次降息，但看起来市场又一次错了，并且向着美联储对世界的看法转变。另外，上周我们还有一篇有趣的沟通是会议记录。在这些记录中，除了讨论隔夜利率的路径之外，还有一些有关量化紧缩的有趣信息。

Now, what I take away from the minutes is that there are, there's a number of people who would like quantitative tightening to continue for some time. Again, this is in line with the more marginally, marginally more hawkish view of when to cut rates. So, the minutes suggest that, no, we could taper totally, but one of the reasons to taper is not so much as to quickly end QT, but if we taper it, maybe go at a slower rate, maybe we can do QT for a longer period of time. We also had people who suggest, of course, that the Fed can cut rates and do QT at the same time, which is not new in which I have written about before. So, what the Fed is very clear on is that they're going to have a big discussion in March as to what house they should proceed with taper and QT and eventually ending it. So, the big details will come soon. But if March is when the discussion is happening, it's likely to be implemented sometime after March.

根据会议记录，我的看法是有一些人希望量化紧缩能够继续一段时间。这与更为鹰派的降息时机有些微微的关联。因此，会议记录表明，我们可能会逐步减少QT，但并非迅速结束，而是慢慢减少，或许可以延长QT的时间。也有人建议，美联储可以同时降息和进行QT，这并非新观点，我之前也写过相关内容。美联储非常清楚，他们将在三月份进行大讨论，关于如何进行逐步减缓QT，并最终结束它。重要的细节将很快揭晓。但如果三月份讨论之后才会实施，实施的可能性很大。

And so, in my own view, I think QT tapering probably starts in the fourth quarter of this year and can go on all throughout, deep into 2025. Okay, the last thing I want to talk about is private credit. Now, private credit is an asset class that has grown tremendously, but it's also opaque because it's private. And thankfully, we have some new research from the Fed that helps should light as to this segment of the market. Now, from a high level, if you are a company and you want to borrow money, there's a couple ways you can do this. Of course, one, if you are a big company like an Apple or something like that, you can go and you can borrow from the capital markets. You can float a bond and companies usually like to do this because rates are really low and have been over the past until recently.

因此，在我看来，我认为QT缩减可能会在今年第四季度开始，并可能持续到2025年。好的，我想要谈论的最后一件事是私人信贷。私人信贷是一种增长迅速的资产类别，但由于是私人的，也很难透明。幸运的是，我们从美联储得到了一些新的研究，有助于揭开这一市场领域的一些光。从高层次来看，如果你是一家公司，想要借钱，有几种方式可以实现。当然，首先，如果你是像苹果这样的大公司，你可以去资本市场借钱。你可以发行债券，公司通常喜欢这样做，因为利率一直很低，直到最近才有所回升。

We know we were in a zero interest rate environment, so it's been pretty cheap to go and just float a bond. Another way you can borrow market is to go to a bank. Now, if you are a medium-sized company, maybe you don't have a credit rating, maybe you are not as well known in the capital markets. So if you needed money, you would just go and call a bank and the bank can make a loan to you. But over time, of course, banks have become more highly regulated. And so they've been a lot more conservative in their lending. So what is your company? And you're not big enough to go to the market. And maybe the bank thinks you're too risky. What do you do? Well, what's been happening is that there's been a growing segment where you can just get a loan from a private lender. So this basically it would be let's say an investment fund that has cash from investors and then goes and makes a loan to you.

我们知道我们处在零利率环境中，因此发行债券成本非常低廉。另一种借钱的方式是去银行。现在，如果您是一家中等规模的公司，也许您没有信用评级，也许在资本市场中不太出名。所以如果您需要资金，您会直接去找银行，银行可以向您放贷。但是当然，随着时间的推移，银行已经受到更严格的监管。因此，它们在放贷方面变得更加保守。那么，如果您的公司不够大无法进入市场，也许银行认为您太冒险，您会怎么办呢？事实上，近些年来出现了一个越来越大的领域，您可以直接向私人借贷者借款。这基本上是说某个投资基金从投资者那里筹得资金，然后向您放贷。

This investment company, this investor would not be a bank, so would not be highly regulated. But the loan wouldn't be something that you've flown in the market. It would basically be a private loan and hence the name private credit. So this segment of the market basically has been growing in part because banks have been more highly regulated. And so they are, I guess, not as willing to make loans to as wide an audience as before. Now, Fed data is showing that this private credit space has been surging in growth and right now has about $1.7 trillion. Now, a key characteristic of these private credit loans is that they tend to be bilateral. So it's one big investment fund making a loan to a foreign company one-on-one. They can quickly execute and they can negotiate a more of a customized agreement. Whereas if it were done with the bank, oftentimes it would be syndicated. You'd have a lot of people involved. Or if it's going to the bond market, you know, a whole bunch of people have a piece of it. In private credit, usually bilateral one big lender and one borrower.

这家投资公司，这位投资者不会是一家银行，因此不会受到高度监管。但这笔贷款不会是您在市场上看到的东西。它基本上是一笔私人贷款，因此被称为私人信贷。所以市场中的这一部分基本上在增长，部分原因是银行受到更严格的监管。因此，我想他们不像以前那样愿意向更广泛的受众提供贷款。现在，美联储的数据显示，这个私人信贷市场正在快速增长，目前规模约为1.7万亿美元。现在，这些私人信贷贷款的一个关键特征是它们倾向于是双边的。这意味着一个大型投资基金向一个外国公司进行一对一的贷款。他们可以快速执行，可以协商一个更加定制的协议。而如果是通过银行进行，通常会进行贷款辛迪加。会有很多人参与。或者如果是通过债券市场，你知道，很多人都有份。在私人信贷中，通常是双边的，一个大型放贷方和一个借款方。

So why would people want to be investing in private credit? Well, a big reason has been is that private credit, the interest rates are high. So investors are able to earn a high return in private credit than they could, let's say, buying a bond or even in leveraged loans. So that seems to have been a big driver in its growth. And if you listen to a recent podcast on Ford guidance on this topic, which is a good podcast, I recommend this episode, you can see that one of the big interests that investors have in private credit is also in that it's not marked market. And so if the market goes up or goes down, investors don't have to show that to their, okay, the investment management companies don't have to show that to their limited partners.

为什么人们想要投资私人信贷呢？一个重要的原因是私人信贷的利率较高。因此，投资者通过私人信贷能够获得比购买债券或甚至杠杆贷款更高的回报。这似乎是其增长的一个重要推动因素。如果您听过最近一期关于这个话题的福特指导的播客，这是一个不错的播客，我推荐这一集，您会发现投资者对私人信贷的兴趣之一也在于它不受市场波动的影响。因此，无论市场是上涨还是下跌，投资者都不需要向他们的有限合伙人展示这一情况。

Now, another thing that was interesting in this Fed study is that private credit actually seems to have lower default rates than comparable assets, say, leverage loans. And part of this seems to be that these loans tend to be, you can, because they're bilateral, they're easier to renegotiate. And so there are fewer defaults. However, when there are defaults, it seems like the lenders have a smaller recovery percentage. Now, the study suggests that lenders in private credit have a smaller recovery, basically a greater loss given default, because a lot of the loans are collateralized by things that are just more intangible. So for example, if you make a loan to a big factory, that loan could be collateralized by equipment that can be resold.

现在，在这份美联储的研究中另一个有趣的发现是，私人信贷实际上似乎比类似资产，比如杠杆贷款，有更低的违约率。部分原因似乎是因为这些贷款倾向于可以因为它们是双边的，更容易重新协商。因此，违约情况较少。然而，当发生违约时，放贷人似乎获得的回收百分比较低。现在，这项研究表明，私人信贷放贷方有更小的回收，基本上是给定违约的更大损失，因为很多贷款以更为抽象的东西作为抵押。例如，如果你向一个大工厂发放贷款，这笔贷款可能以可以转售的设备作为抵押。

But if you make a loan to something, let's say a tech company, well, it's collateralized by a lot of intellectual property, that's whose market value is a lot less certain. And so this, I think difference in collateral seems to be accounting for the lower recoveries. Now, one other thing I thought interesting about private credit is that loans are predominantly floating rate. And so if you look at a graph of their interest coverage ratios over the past several quarters, you know that they've been deteriorating notably. As the Fed has hacked rates, short rates have gone up. And so these private people who companies who borrow in private have been having, I guess, being squeezed. But the good news is that it's likely that the Fed will cut rates later on in the year. And so these guys, they should be receiving some belief. So all in all, it seems like private credit, and it'll continue to be fine. Interest cover ratios have gone down, but default rates remain low and rate cuts are come, rate cuts are probably help that out.

但是，如果你向某个实体，比如一家科技公司贷款，抵押品是大量的知识产权，其市场价值相对不确定。我认为这种抵押品的差异似乎解释了较低的回收率。另一个我觉得有趣的私人信贷的一点是，贷款主要是浮动利率。因此，如果你看过去几个季度的利息覆盖率的图表，你会发现它们明显在恶化。随着联邦储备的降息，短期利率上升，这些私人借款的公司似乎被挤压了。但好消息是，联邦储备可能会在今年晚些时候降息。因此，这些人应该会收到一些帮助。总的来说，私人信贷似乎会继续良好。利息覆盖率下降了，但违约率仍然很低，即将到来的降息可能会帮助解决问题。

And now my this week, what I'm going to write about is how I think that the macro framework, let's say massive deficit spending on coming rate cuts is going to be also a boom to credit as it is to equity. And so personally, I'm not really worried about any credit concerns at the moment. All right, so that's how I prepared for this week. If you're interested in my recent thoughts, check out my blog at FedGuy.com. And of course, if you're interested in learning more, about markets, check out my courses at FedGuy, centralbanking101.com. Talk to you guys next week.

这周我打算写的主题是我认为宏观框架，比如大规模赤字支出和即将到来的利率削减，对信用市场的推动将与对股权市场一样。 所以个人而言，我并不担心目前任何信用问题。 这就是我为这周做好准备的方式。 如果您对我的最新想法感兴趣，请查看我的博客FedGuy.com。 当然，如果您对市场有更多了解，也可以查看我在FedGuy, centralbanking101.com 的课程。 下周再聊。