4.1.24: US Manufacturing Expands for First Time Since 2022

For Public Readers: Weekly Key U.S. and China brief market notes by Larry Cheung's Analyst Staff Team for our Public Email List

Apr 01, 2024

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In our emails, we will provide the following coverage points:

Brief Overview of U.S. & China Markets
Macro Chart in Focus
U.S. & China Upcoming Economic Calendar
Chart That Caught Our Eye

U.S and China Markets Brief Snapshot 🇺🇸 🇨🇳

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S&P 500 Index: 5,243.77

KWEB (Chinese Internet) ETF: $26.84

Analyst Team Note:
Investors are generally unworried with any market pullbacks. The cost of S&P 500 call options expiring in one year with a 25% chance of coming in the money are up while the cost of equivalent puts are down.
However, what’s interesting is that average daily call volume on the VIX was higher in Q1 than the two prior quarters. The cost of calls against equivalent puts is at its highest level in five years.

Macro Chart In Focus

Analyst Team Note:
In March, US factory activity experienced an unexpected expansion driven by a rebound in production and enhanced demand, marking the first month of growth since September 2022.
Despite the positive trends in production and demand, challenges persist with increasing input costs.

Upcoming Economic Calendar

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U.S Economic Calendar (Upcoming Data Points)

China Economic Calendar (Upcoming Data Points)

N/A

Analyst Team Note:
Air travel has seen a notable uptick, with a nearly 4% month-on-month increase in inflation-adjusted growth for both January and February.
This resurgence in air travel, underscored by a 6% year-over-year rise in airport traffic reported by the TSA in February, has continued to gain momentum into March, approaching levels last seen during the peak travel period of last Thanksgiving.

Chart That Caught Our Eye

Analyst Team Note:
In January, banks, particularly in the San Francisco district, significantly increased their usage of the Fed’s Bank Term Funding Program (BTFP), seizing a final opportunity for favorable borrowing costs before the Federal Reserve raised fees.
With the BTFP concluding recently, a further reduction in banks’ outstanding loans is anticipated, influenced by the Fed's future interest rate policies and the potential shift towards alternative funding sources.