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    Altira close to day lows on the earlier vaping news...

    The bear is not feeding over to all assets today...

    One example, JPY vs NASDAQ, tale of two different stories on the intraday chart...

    The bear is not feeding over to all assets today...
    Bloomberg PLC

    *MCCONNELL: VAPING, E-CIGARETTE USE BY TEENS IS HEALTH CRISIS

    How much of a US recession is priced in?

    How much of a US recession is priced in?
    JPM

    Semis etf, SMH US, day lows as we trade below the 200 day average.

    The etf has not closed below the 200 since early Feb.

    Volumes are huge.

    Semis etf, SMH US, day lows as we trade below the 200 day average.
    Bloomberg PLC

    NASDAQ rather low in the market profile distribution.

    Point of control some 30 points higher.

    NASDAQ  rather low in the market profile distribution.
    Bloomberg PLC

    M&A and LBOs

    1. 2019 YTD is tracking to be the "smallest" M&A year in 6 years

    2. LBOs are just gone

    3. many weeks now since we had a high profile large cap M&A transaction.

    M&A and LBOs

    no "peak stimulus" in China - more to come

    GS thinks that the recent actions should be sufficient to dismiss the lingering concerns about "peak stimulus" and policy tightening. In fact, the renewed trade tensions should give room for further easing and supportive measures across different domains

    Goldman
    no "peak stimulus" in China - more to come
    Goldman

    Leading indicator continues to nudge down

    The April global CAI is down three-tenths from the previous week and now stands at 3.0%. From today, we start publishing the May LCAI, which is running at 2.9%, also down three-tenths relative to the April LCAI.

    Goldman
    Leading indicator continues to nudge down

    VIX futures unimpressed by the latest Huawei "crisis"....not doing much at all.

    VIX futures unimpressed by the latest Huawei "crisis"....not doing much at all.
    Bloomberg PLC

    BIDU AI not working right now

    The BIDU crash is spectacular

    -56% in 1 YR

    -35% since April

    >$50bn in market cap gone

    From hero to zero in a short space of time

    GS: "not much more upside in India Equities"

    1. Equity markets rose almost 4% today post the exit polls. With markets trading at 18x forward earnings, we see limited fundamental headroom for any significant re-rating.

    2. Equity valuations are not inexpensive (relative to its history), and given the 4% move today, more positive market sentiment is getting priced in quickly.

    3. We see the equity valuations as ‘fair’ relative to our macro models

    Goldman

    VIX exploded during the early part of the sell off. Despite the SPX continuing to trade lower, VIX has managed retreating.

    This is a classical situation of when people confuse pace with direction, end up buying expensive protection, and then keep busy trading out of expensive hedges.

    SPX vs VIX over past weeks.

    VIX exploded during the early part of the sell off. Despite the SPX continuing to trade lower, VIX has managed retreating.
    Bloomberg PLC

    The CTA space seems to be catching trend rather well as of late.

    All in long as the SPX was going higher, and now it looks the crowd is rather short given the recent uptick in performance.

    (note the CTA index is delayed by 2 days).

    The CTA space seems to be catching trend rather well as of late.
    Bloomberg PLC

    The 15 month bull

    Index performances since January 29, 2018

    NDX: +5.33%

    SPX: -0.94%

    DJIA: -3.39%

    RUT: -4.73%

    NYSE: -7.31%

    BKX: -16.90%

    Bernstein: apple margins will continue to decline

    1. many of the new services announced (TV+ and Arcade) have the potential to have lower margins than current services offerings.

    2. believe operating margins should continue to decline as R&D spending outpaces revenue growth.

    LYFT spot rate for borrow keeps coming down

    From high 40% to now low 20s%

    Fed implied probabilities Jan 2020.

    Cut 77%, no change 23%.

    Fed implied probabilities Jan 2020.
    Bloomberg PLC

    Chinese internet KWEB US, mentioned earlier, is almost waking up the contrarian in us, but when you look deeper into the members of 5% and more of the ETF, the bounce trade feels it can wait for some longer...

    Chinese internet KWEB US, mentioned earlier, is almost waking up the contrarian in us, but when you look deeper into the members of 5% and more of the ETF, the bounce trade feels it can wait for some longer...
    Bloomberg PLC

    Credit Card ABS- all time tights

    Credit Card ABS- all time tights
    Goldman

    US RMBS trading like Safe Havens

    1. Many asset classes have sold off in May on trade-related concerns, but US RMBS, CMBS and consumer ABS have delivered positive excess returns month-to-date.

    2. Since the financial crisis period, US structured products have been relatively defensive, underperforming in risk-on periods such as 2019Q1 but outperforming in risk-off periods like 2019Q2.

    3. The cashflows of securitized products are arguably less sensitive than are corporate securities to disruptions in US trade patterns, so recent relative asset class performance appears consistent with risk fundamentals.

    Goldman
    US RMBS trading like Safe Havens
    Goldman

    SOX implied volatility is spiking, but there is not "panic".

    SOX implied volatility is spiking, but there is not "panic".
    Bloomberg PLC

    *CLARIDA REPEATS ECONOMY OPERATING AT OR CLOSE TO FED TWIN GOALS

    *CLARIDA: FULL EMPLOYMENT MAY GO AT LEAST AS LOW AS 3.6% JOBLESS

    Foreigners continue dumping China...

    Foreigners continue dumping China...
    Bloomberg PLC

    Soybeans, a good trade war proxy until recently, seem unaffected by the latest Huawei "crisis".

    On the other hand, as we showed early this morning, soybean shorts is a crowded space.

    https://themarketear.com/posts/ceGahLpVM

    Soybeans, a good trade war proxy until recently, seem unaffected by the latest Huawei "crisis".
    Bloomberg PLC

    The CTA space seems to be catching trend rather well as of late.

    All in long as the SPX was going higher, and now it looks the crowd is rather short given the recent uptick in performance.

    (note the CTA index is delayed by 2 days).

    The CTA space seems to be catching trend rather well as of late.
    Bloomberg PLC

    It would be interesting to see Tesla reverse just in time everyone is uber bearish.

    So far today this is a hammer candle on the huge 200 level....

    It would be interesting to see Tesla reverse just in time everyone is uber bearish.
    Bloomberg PLC

    SPX vs SOX ratio has jumped huge over past weeks.

    We have not seen such a big under performance by the SOX in a long time...

    SPX vs SOX ratio has jumped huge over past weeks.
    Bloomberg PLC

    All vols are popping higher today, but the NASDAQ "VIX", VXN index, really "outperforming" the VIX today.

    VXN vs VIX spread at levels not seen since mid Jan.

    All vols are popping higher today, but the NASDAQ "VIX", VXN index, really "outperforming" the VIX today.
    Bloomberg PLC

    DAX futs right on that huge 12k level.

    DAX futs right on that huge 12k level.
    Bloomberg PLC

    Euro credit, iTraxx main, has "underperformed" the Eurostoxx 50 futs lately...

    ..but equities catching up "relatively" speaking today.

    Euro credit, iTraxx main, has "underperformed" the Eurostoxx 50 futs lately...
    Bloomberg PLC

    VIX futures curve stayed elevated and stays elevated...

    We are down from "panic" levels but remain in "stressed" territory.

    The 2 vs 8 months spread almost flat again.

    VIX futures curve stayed elevated and stays elevated...
    Bloomberg PLC

    Before this last sell off and vol explosion move, the VVIX had started to move higher in April...

    As we all know, VIX caught up.

    Note the VVIX has once again started to move higher and stays "elevated".

    Before this last sell off and vol explosion move, the VVIX had started to move higher in April...
    Bloomberg PLC

    Oil hasn't closed here in a while...

    Oil hasn't closed here in a while...
    Bloomberg PLC

    DAX stuck?

    Above the huge 12k support, below the 12350 resistance.

    DAX stuck?
    Bloomberg PLC

    JPM said bitcoin move mirrors 2017 crazy boom bust pattern. So far today, lot of boom, XBT +12%.

    “Over the past few days, the actual price has moved sharply over marginal cost,” “This divergence between actual and intrinsic values carries some echoes of the spike higher in late 2017, and at the time this divergence was resolved mostly by a reduction in actual prices.”

    JPM said bitcoin move mirrors 2017 crazy boom bust pattern. So far today, lot of boom, XBT +12%.
    Bloomberg PLC

    EM FX has traded horribly bad for months. EM equities space has caught up and is a space to be observed carefully.

    EM FX has traded horribly bad for months. EM equities space has caught up and is a space to be observed carefully.
    Bloomberg PLC

    VIX net non commercials does not tell the entire story as there are offsetting hedges, but people have been closing out VIX shorts (although positioning is still short).

    VIX net non commercials does not tell the entire story as there are offsetting hedges, but people have been closing out VIX shorts (although positioning is still short).
    Bloomberg PLC

    Put call ratio spiked to highest levels since late December.

    Put call ratio spiked to highest levels since late December.
    Bloomberg PLC

    Trade war "proxy" soybeans net non commercials increased shorts even more....

    Note this is updated per May 14, so the last pop higher probably hurt p&l....

    Trade war "proxy" soybeans net non commercials increased shorts even more....
    Bloomberg PLC

    Semis ETF, took in a record 4 day inflow.

    The SOXX US is down 13% from recent highs.

    Semis ETF, took in a record 4 day inflow.
    Bloomberg PLC

    Financials decoupled from Forward rates

    For the majority of this year, really until 1Q earnings, Financials performance seemed correlated with forward rate expectations….

    However by April 15th, the trade dispute pushed forward rate expectations lower once again, decoupling from Financials performance.

    So the question now: by how much could the Fed cut, and is the decoupling of Financials warranted

    MS
    Financials decoupled from Forward rates

    Despite VIX down over past sessions (yes it is up on the news out a little while ago), the VIX futures curve is all but "relaxed".

    We saw recent panic pricing, but we remain trading rather "stressed" when it comes to pricing the VIX futures spread (here the 2 vs 8 months).

    Despite VIX down over past sessions (yes it is up on the news out a little while ago), the VIX futures curve is all but "relaxed".
    Bloomberg PLC

    Offshore yuan at worst levels on the day, -0.27% at 6.947. Watch the huge 6.97 ish level closely.

    Offshore yuan at worst levels on the day, -0.27% at 6.947. Watch the huge 6.97 ish level closely.
    Bloomberg PLC

    Emerging market etf, EEM US, is down 10% from recent highs we saw 3 weeks ago.

    EEM US is approaching the big 40 support.

    3 weeks ago the EM space was considered "safe". Our logic from a note 23 days ago regarding the EEM US:

    "Maybe u don't trade EM FX, but EM FX leads the Emerging market equities space, EEM US, which in turn is a big part of the the "risk puzzle".

    Remember last year when EM FX started moving, then "spilled over" to the EEM US, and eventually spread to SPX."

    Emerging market etf, EEM US, is down 10% from recent highs we saw 3 weeks ago.
    Bloomberg PLC

    Those panic hedges once again proved expensive...

    VIX futures curve coming in further. The 2 vs 8 months futures trade -0.5 here as demand for hedging, especially short term maturities are sold.

    Those panic hedges once again  proved expensive...
    Bloomberg PLC

    Remember Bolsonaro´s golden shower tweet?

    He almost nailed the highs...

    Remember Bolsonaro´s golden shower tweet?
    Bloomberg PLC

    Gold volatility continues coming off offering relatively cheap directional bets, but...

    do recall that gold volatility has an "inverse" logic to it. Gold vol, GVXX index, falls when gold goes down, and spikes when gold goes higher.

    Gold volatility continues coming off offering relatively cheap directional bets, but...
    Bloomberg PLC

    The GBP has traded horribly bad for the past 2 weeks, but note that despite the GBP having lost 3.3% during these 2 weeks, 1 month vols have gone nowhere.

    It's that pace with direction confusion again...

    The GBP has traded horribly bad for the past 2 weeks, but note that despite the GBP having lost 3.3% during these 2 weeks, 1 month vols have gone nowhere.
    Bloomberg PLC

    VIX is up, despite being Friday (vols should theoretically fall pre weekend), and the VIX futures curve is bouncing small, but note the VIX curve still trading in negative territory, stressed but not that stressed.

    VIX is up, despite being Friday (vols should theoretically fall pre weekend), and the VIX futures curve is bouncing small, but note the VIX curve still trading in negative territory, stressed but not that stressed.
    Bloomberg PLC