The Dead Cat bounce is old news, now we're confronting the evolution: The "Flat Cat" Landing.
Translation: while the markets try to rally, Powell isn't taking his foot off the rate hike pedal (we like to think he drives an '82 'vette)...

So how can you avoid getting pancaked like poor Mr. Mittens?

Masterworks.

This art investment platform's last three exits delivered +10%, +13%, and +35% net returns. And no, 35% returns is NOT a typo. In fact, Masterworks has had every single one of their exits to date deliver positive returns to their investors, even through 2022's record rate hikes.

You see, the art market is way less affected by macroeconomic swings than stocks. Meaning you don't have to worry if JPow is in the mood for some reckless driving.

Masterworks is helping over 620,000 people unlock the $1.7 trillion high-end art market, so investors like you can diversify with pieces from names like Banksy and Picasso. No wonder offerings have sold out in minutes.

Fortunately, you're a Daily Peel reader, so you don't have to worry about that. You can skip the waitlist with this VIP link

• Rowdy, funny, and some may come even awkward at times, catch up on the State of the Union here (or just scroll down a little)
• Negative money is the new money, or at least we hope, as the US posts its largest trade deficit ever in 2022
• Consumer spending, particularly through credit, has a sore back from carrying this economy for so long…and it's finally starting to slow
• Mortgage applications are kinda poppin' off

JPow Speaks…Again

Can this guy just shut up? Markets are more than volatile enough with JPow yappin' it only 8 times a year, and as far as I'm concerned, we're about to OD on vol anyway.

But if he insists on speaking, I guess we'll listen. Fed Chair / God King Jerome H. Powell took the stage at the "Economic Club" of Washington to give markets as much of a scare as the first episode of The Last of Us. If your neck hurts from all the whiplash, just know we feel your pain too, apes.

Just looking at a chart of the S&P yesterday gives the whole story. Right off the bat, it was a party. See, the market was likely anticipating JPow to be super-mega-hawkish after last Friday's jobs report, but right off the bat, he set the tone for a dovish-leaning conversation.

To say it was a friendly environment for Powell is an understatement. Not only is he like the all-star quarterback and the head cheerleader combined with that audience of economic nerds, but the interviewer himself is a bit of an old friend.

Duke University's Board of Trustees Chair and billionaire David Rubenstein asked the questions, and this guy also just happened to found the Carlyle Group, JPow's employer from 1997-2005, where he worked as a Partner. Maybe that had him feeling calm, or maybe it's not that deep (*shrugs*).

But Rubenstein still did hit him with the hardest question of the day right off the bat. Essentially he asked Powell if the FOMC would've raised rates more last week if they'd had the January jobs data in advance. In response, Powell put on a masterclass of saying nothing by saying something, with the most important lines being:

• "...we didn't expect it to be this strong…"
• "...shows you why this will be a process that takes a significant period of time."

After this, the questions got a lot easier and certainly easier to rehearse answers to. Powell essentially tried to keep up the same message from Wednesday while markets expected him to come at it with a more hawkish tilt, hence the spike in $SPY following the speech.

Other important bars JPow spit were essentially just like, "yeah, you can copy my homework, but just change it a little, so it's not the exact same." Key messages included:

• It will take a "significant period of time" before inflation is squashed due to the continued labor market strength shown Friday
• There remains a "long way to go" for the "disinflationary process" to complete
• "React to the data," "a bumpy road," and "more work to do." You get it...

A new message of the same old stuff probably summarizes it best. Still, we did get a little something when Powell made clear where his disinflationary focus is. With services making up over 50% of the US economy, JPow mentioned that what he wants to see most is a slowdown in service costs, particularly those related to housing.

But even that's a stretch, as this was pretty much the consensus assumption anyway. A few things we did learn, however, is that Powell does enjoy a nice bike ride, a cool mystery novel, and of course, playing the guitar. Good stuff!

Expect more of the same leading up to the March meeting. Markets are still pricing in rate cuts later this year and beyond, as indicated by the yield curve, so we'll see who blinks first.

Baidu ($BIDU) ↑ 12.18% ↑

• Maybe back in 2020 the Fed should've just announced they were launching an AI chatbot too. Seems to be a far better money printer than JPow.
• Following its American rivals Google and Microsoft's Bing (lol), the "Chinese Google" known as Baidu announced plans to soon launch an AI chatbot of its own.
• Wenxin Yiyan, the name given to their bot, will launch this March. Unlike Bing and Google, however, it remains unclear whether Wenxin will be integrated into the existing search engine or become the main character of its own thing.
• Kind of like NFTs in 2021, announcing an AI project at literally any company seems to be the new hack for a double-digit single-day gain. Only this time, the bots in question have an actual use case beyond embarrassing yourself on Twitter.

Hertz Global ($HTZ) ↑ 7.47% ↑

• Joining The Blind Side and Average Joe's Gymnasium as one of the greatest comeback stories of all time is your boy Hertz Global. Shares in the car rental company were left for dead in mid-2020, and now, they've got $6.35bn to their name.
• Amid all the wild sh*t that's happened since then, we'd forgive you if you forget the epic story of Hertz's 2020 bankruptcy. But that's old news anyway, as the company reported stellar earnings yesterday, posting EPS of $0.50, beating expectations despite blowing it on revenue.
• It's a two-part story: the car market is coming back from the brink as travel is even more back than ever before, according to the company. Plus, it doesn't hurt that Hertz is leaning into the EV wave investors are pouring money into hand over fist.