Get thefreeapp!Use the browser menubelowon the top rightand tap
Empty in "that" order book...
The most important is to watch the LQD 134 level (pre corona highs, chart 2).
1/3 of Q4 already passed. Time to go manic...
Fed is not tightening, most stocks not in bull market (catch up?), 65% of MSCI stocks are still in bear market (20% below their ATHs), MSCI equal weighted has done very little since 2007 top
IPO mania (see previous post), M&A premium 142% vs long term average 23%, $3.2 tn raised for IG/HY, SPACs etc, US houses soaring, concentrated equity rally, greedy IG and tech inflow, chart double top, negative narratives becoming bullish narratives (blue wave is now bullish...)
IPO ETF up more than 150% from March lows.
HY bond outflows accelerate
tech inflows remains robust
inflows to Japan strongest since Apr 2019
EM largest inflow in 7 weeks
largest outflow from European equities in 5 mths
Almost like Madoff drew it...
...and given the renewed corona situation, there will most likely be even more dry powder.
Nordea sums it up well;
"By pre-promising a recalibration of the instruments in December, the ECB effectively added a put to risk assets. A bigger sell-off means a bigger package in December. It is as simple as that".
Given the ECB put, TME's take on equity volatility here remains intact, vol trades rather rich here and should be used to "enhance yield" (second chart).
“We are willing to work with the world on climate change, energy change, public health, and support global experts on their studies, complete China’s legal environment, better protect intellectual property and try to create a friendly environment for technology innovation in China,” Wang Zhigang, Minister of Science and Technology
Full SCMP articlehere.
...but note the diminishing slope of the QQQ gamma curve.
According to JPM;
84% of S&P500 companies beat EPS estimates, this is very high. 70% of Stoxx600 companies beat their EPS estimates and 59% of Topix companies beat EPS estimates.
With so many beating, the ones that are missing are punished severely...
15-year Mortgage Rate in the US hits another all-time low: 2.32%.
Berlin is opening the new international airport tomorrow. The project is delayed by almost a decade and is three times over the budget. Just in time for the German lockdown...
TME outlined the Ant trade yesterdayhere.
Today FT writes;
“We will provide around HK$35-40bn ($4.5-5.8bn) for margin financing, or even up to HK$50bn in the case of popular demand,” said Edmond Hui, chief executive of Bright Smart Securities, a Hong Kong brokerage that is lending punters up to 20 times the amount they put down...
Apple vs IBEX YTD...(ex the Apple after hours)
European indexes have traded awful over the past week. Since breaking below the "summer box", SX5E has fallen quickly, reaching approx the range breakout px "target". 2900 area is big and is the break out level higher from May. Note the index is putting in a potential hammer candle so far today, right on the 2900 level.
V2X (Eurostoxx 50 "VIX") has come up a lot over the past week, and is all but cheap here. Lock downs sure, but you have to decide how much you think this market is going to move daily going forward, not only the direction and at these vol levels market prices approx 2.15% daily moves for the DAX for the coming month (second chart showing DAX vol structure).
German GDP NSA (Y/Y) Q3 P: -4.1% (est -5.2%; prev -11.3%)
German GDP WDA (Y/Y) Q3 P: -4.3% (est -5.5%; prev -11.3%)