{{message}}

Notifications areblockedby your browser.

Please enable them to receive live relevant coverage from The Market Ear

Market alerts are nowenabled

We'll send you relevant markets coverage in real time

Market alerts are nowpaused

To enable them, simply click on thebutton

    Where are we in the industrial cycle?

    Is the glass half full, or half empty?

    Half-empty: PMIs are telling us more about production than about industrial demand. Economic surprises have peaked, and there is some moderation in industrial data series.

    Half-full: MSCGi index trends better and China feels good.

    Where are we in the industrial cycle?
    Source: Morgan Stanley Equity research

    Get thefreeapp!

    Use the browser menubelowon the top rightand tap
    iOS Browser Menu Android Browser MenuAdd to Home Screen
    The world is not even expensive...

    That 24m multiple seems to be pretty much in-line with the past 5-7 years

    Chart: 12m and 24m fwd MSCI AC World stock valuation

    The world is not even expensive...
    Source: MSCI
    Did Powell place a few trillion on bid and a few trillion on the offer and let people trade?

    Yields refuse moving anywhere...Fed trulyis master of killing bond vol.

    Did Powell place a few trillion on bid and a few trillion on the offer and let people trade?
    Source: Refinitiv
    Lagarde keeps on printing

    Total assets rose by another €24.5bn

    Lagarde keeps on printing
    Source: Bloomberg
    LQD - bouncing on the big 134 level, but Powell needs to step up the game
    LQD - bouncing on the big 134 level, but Powell needs to step up the game
    Source: Refinitiv
    $2.5 bn to sell MOC
    SPY - remember that low realized vol?

    It caught up to implieds...but vol is not cheap enough to buy and not expensive enough to sell...

    SPY - remember that low realized vol?
    Source: Refinitiv
    Implied correlations stay close to recent highs...

    ...and vols are down since early Sep.

    Implied correlations stay close to recent highs...
    Source: Refinitiv
    Mnuchin's bazooka holding highs
    Mnuchin's bazooka holding highs
    Source: JPM
    The anatomy of QE4

    Smooth sailing after the initial "panic buys"...

    The anatomy of QE4
    Source: JPM
    A bit of hmmmm

    "The Fed does not hedge: QE4 is running at a monthly pace of $110bn gross (and $40bn net); Fed purchases represent about 40% of total monthly gross supply and entirety of net supply; the Fed now owns over 30% of the agency MBS market and its share still grows incrementally each month as QE progresses; this massive scale is dampening duration and vol supply to the rest of the mortgage market" - JPM

    Equal-weighted S&P500 vs market-cap weighted S&P500
    Equal-weighted S&P500 vs market-cap weighted S&P500
    Source: Morgan Stanley
    Lumber starting to doubt the latest tech bounce...

    and the psychology between these two has been "identical".

    Lumber starting to doubt the latest tech bounce...
    Source: Refinitiv
    Some traffic is above the pre Corona levels

    Time for air pollution masks in Guangzhou?

    Some traffic is above the pre Corona levels
    Source: TomTom
    Return-to-work tracker: later

    MS brand-new WFH tracker shows 40% of the corporates under consideration have both 1) pushed return to work plans to 2021; and 2) adopted hybrid in-office / WFH models.

    1)    utilization remains in the 10-20% range - still very low relative to the ~60% utilization pre-COVID. As return to work timelines gets pushed out, this should limit a pick-up in leasing activity.

     

    2)     Corporates are increasingly open to adopting a hybrid / agile work environment.

     

    3)     A broad-cross section of corporates reveals wide-spread plans to reduce office footprints or at least reassess future needs. A handful, however, have revealed plans to increase their office footprint (AMZN, GOOGL, MA).

     

    Return-to-work tracker: later
    Source: Morgan Stanley
    The inflation narrative that lost steam

    Watch these charts closely going fwd.

    The inflation narrative that lost steam
    Source: Refinitiv
    Draw-downs: no pain no gain

    AMZN has declined:

    10% - 29 times

    20% - 14 times

    30% - 8 times

    40% - 5 times

    50% - 4 times

    90% - 1 time

    Returns since IPO: 151,600%.

    Peter Lynch: "The key to making money in stocks is not to get scared out of them."

    MS tech specialist
    MoMo taking a serous hit

    EU MOMO was the worst performing thematic basket in Europe today, down -1.75%. The pull back was mainly driven by the short leg of the basket which rose+3.72%(it’s biggest one day move since 11thAug) compared to the long leg which is up +1.59%.

    Coming into today, MoMo was very over-extended

    Refinitiv
    MoMo taking a serous hit
    Source: JPM
    Recall South Korea as the canary in the mine?
    Recall South Korea as the canary in the mine?
    Source: Nordea
    Trannies or QQQ - Trannies +49%, QQQ +48% (6 months performance)

    It's all relative...

    Trannies or QQQ - Trannies +49%, QQQ +48% (6 months performance)
    Source: Refinitiv
    NASDAQ - tried above the 50 day

    Nobody is in control when it comes to tech...

    NASDAQ - tried above the 50 day
    Source: Refinitiv
    Greed and fear - 50/50
    Greed and fear - 50/50
    Source: CNN
    PELOSI SAYS WE'RE READY TO TALK BUT ADMINISTRATION MUST COME TO THE TABLE WITH MORE MONEY TO FIGHT COVID
    DeltaOne
    Everyone wants to be an entrepreneur

    Americans are starting new businesses at the fastest rate in more than a decade

    Everyone wants to be an entrepreneur
    Source: WSJ
    So far we have had 24 days with 2% drops, more than any other year but 2008, 2009, 2011 going back to 2004
    MS
    Chinese internet as a laggard play?

    KWEB lagging FDN recently.

    Chinese internet as a laggard play?
    Source: Refinitiv