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    Mongolia

    Just in order to emphasize the light news-flow due to Thanksgiving we would want to put the spot-light on everyone´s focus market Mongolia.

    JPM says to stay OW the ‘defensive frontier,’ which is on an even stronger footing than it was prior to the pandemic. Mongolia stands to benefit from the bullish set-up for EM sovereign credit while being insulated from near-term concerns over a second COVID-19 wave in the Northern hemisphere

    Want yield? Go to Mongolia.....(this will deserve at least a honorary mention the day the book about the crazy low-yielding years of ZIRP is written)

    Mongolia
    Source: JPM

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    Bitcoin - huge candle over...what is next

    Rather "fluid" situation in Bitcoin, but let's see how this trades when liquidity comes back to markets.

    Charting parabolic moves is very hard, but 50 day at 14500, 100 day at 12700 and 200 day at 11295 says a lot how stretched this last mania got...

    Bitcoin - huge candle over...what is next
    Source: Refinitiv
    Gamma watch for tomorrow

    SPY remains in "sticky" long gamma land, while QQQ in light long gamma here.

    Note the SPY gamma distribution in the second chart.

    Gamma watch for tomorrow
    Source: Spotgamma
    Gamma watch for tomorrow
    Source: Spotgamma
    Oil - large spec positioning...back and forth

    ...but no trend

    Oil - large spec positioning...back and forth
    Source: MPAS
    BofA bull and bear indicator

    Getting hotter....but still not in sell territory.

    BofA bull and bear indicator
    Source: BofA
    Expect 250k cases this weekend and 380k next weekend...with an overshooting

    Below is GS model projection that has been pretty accurate since early November. This is temperature related only. You need to take into account the idiosyncratic upside risk from Thanks giving as well.

    Expect 250k cases this weekend and 380k next weekend...with an overshooting
    Source: GS
    Bears remain in hibernation

    Small bounce in the AAII bear sentiment, but bears have evaporated violently over past weeks. The question is do we need to see this reading take new lows before any meaningful correction can occur?

    Bears remain in hibernation
    Source: Refinitiv
    Bulls stay very bullish

    Latest AAII sentiment reading moving higher again. Note the big spike was mainly due to the survey having been conducted on the Pfizer vaccines news day.

    Bulls stay very bullish
    Source: Refinitiv
    Bull in life insurance demand for the younger cohort

    Long life insurance and long Bitcoin...

    Bull in life insurance demand for the younger cohort
    Source: CBinsight
    Online holiday sales

    Online holiday sales historical and estimated. Shop til you drop....

    Online holiday sales
    Source: Adobe holiday report
    Retail Army crushing the Institutional Force

    The most important investor on planet Earth in 2020 is the US retail investor - and they are allegedly having a lot of battle field success. The GS custom basket of favourite retail names is up 76% YTD . And as chart below shows seemingly contains a lot of alpha. Retail Army is beating the Institutional Force (long-only fundamentalists, hedgies and quant) by a mile.

    Retail Army crushing the Institutional Force
    Source: Goldman
    42c of every internet shopping dollar spent will go to Boss Bezos

    "We're incrementally positive on AMZN going into what should be a blockbuster holiday season, given the company's outsized growth withinU S ecom, of which we estimate AMZN will claim ~42% of total GMV vs.~36% last year"

    AMZN trades at ~3.4x EV/Rev and 21.7x EV/EBITDA on 2021 numbers

    Chart: AMZN market share US

    42c of every internet shopping dollar spent will go to Boss Bezos
    Source: Truist
    Sweden - more aggressive than expected on QE...and more aggressive growth of Corona

    The increased buying for Q1 was a surprise. The world's oldest central bank is basically very pessimistic on short term inflation and the economy. Whatever happened to the bullish vaccine narrative everybody is so bullish on?

    Sweden is a small country, but is important as a "global sentimentor" as it is an open export oriented country and very sensitive to the global economy (for more reading on the decision itself see Nordea's takehere).

    SEK has been one of the best performing currencies lately, but given the bearish outlook by the Riskbank as well as the surge in Corona cases in Sweden, while main European cases are falling, makes you wonder if it is time for a reversal in the "mighty" SEK (chart 3)?

    Sweden - more aggressive than expected on QE...and more aggressive growth of Corona
    Source: Nordea
    Sweden - more aggressive than expected on QE...and more aggressive growth of Corona
    Source: Nordea
    Sweden - more aggressive than expected on QE...and more aggressive growth of Corona
    Source: Refinitiv
    From 0 to $13bn in one year. Fastest sales ramp ever?

    Moderna made the total of $60m in sales last year. Now the market estimates that MRNA will generate mRNA-1273-related revenue of $305mn in 4Q20 and $13.3bn in 2021. Impressive. Could this be the fastest sales ramp ever, no matter product?

    From 0 to $13bn in one year. Fastest sales ramp ever?
    Source: Moderna
    Time to get some UK exposure via non-UK names...?

    Eurozone stocks with high UK exposure have been faring quite well in the last couple of months, but still massively lagging the strong rally in the domestic UK stocks we’ve seen recently. Will this gap close?

    Time to get some UK exposure via non-UK names...?
    Source: Bloomberg
    Could we unrotate?

    Could the violent rotation where people have chased Russell vs NASDAQ "suddenly" unrotate? Main short term catalyst could be theUS lockdown logicwe outlined earlier.

    Liquidity is low and people have rushed into the rotation trade rather abruptly with positioning now slightly "extreme" when it comes to Russell vs NASDAQ.

    Could we unrotate?
    Source: Refinitiv
    Could we unrotate?
    Source: DBK
    IPO vintage

    2012 IPOs vs. offering price

    ServiceNow: +2785%

    2013 IPOs vs. offering price

    Burlington Stores: +1206%

    2014 IPOs vs. offering price

    Zendesk: +1395%

    2015 IPOs vs. offering price

    Shopify: +5897%

    2016 IPOs vs. offering price

    Twilio: +1937%

    2017 IPOs vs. offering price

    Roku: +1886%

    2018 IPOs vs. offering price

    Docusign: +673%

    2019 IPOs v. offering price

    Zoom: +1133%

    2020 IPOs vs. offering price

    Li Auto: +254%

    Bilello
    IPO vintage
    Source: Refinitiv
    Gold - will it ever rise again?

    Gold momentum has been horrible for months. The latest sub 1860 puke was violent, but feels almost like the last weak hands shake out. Gold managed bouncing on the 200 day moving average and the longer term trend. Let's see how it trades in the coming days, but one thing is sure, people have been trimming gold longs for months (chart 2).

    Gold - will it ever rise again?
    Source: Refinitiv
    Gold - will it ever rise again?
    Source: Refinitiv
    Thinking about those buybacks

    Will we ever see buybacks again? Recall tech is where we have the buybacks potential...

    Thinking about those buybacks
    Source: DBK
    Traders: 2nd wave is done and dusted

    The stark difference between Wall Street and Maine Street could not be more clear than in the case of corona. Hospitalizations and deaths are sky-rocketing but financial markets clearly are saying: "It's hurting less this time" (for the economy that is).

    Deutsche Bank: "Our mobility heatmap suggests that the impact of the second wave on economic activity may have peaked. Hence, the clear slowing in case growth in both the US and Europe is not coming at the expense of a creeping decline in economic activity. Activity in the US has remained at relatively high levels. And with case growth now showing signs of stabilization across the country, the downside risks may have diminished"

    Deutsche Bank
    Epic collapse of protection

    Equity protection, VIX, saw the biggest 7 days vol puke post elections ever, and has since then continued lower. Credit protection has been less volatile, but is also down substantially.

    They are both sitting on post Corona lows. Time to start thinking about potential risks and how to use relatively cheap optionality here.

    Super spreader event is the first one...

    Epic collapse of protection
    Source: Refinitiv
    European bank dividend: will it or wont it?

    The great "Dividend Debate" continues - all eyes on December 10th. Will well capitalized banks be allowed to resume dividends in 2021? One could expect further clarity post the 10th December governing council meeting. Bank investors would clearly see a lifting of the blanket dividend ban as a positive for the sector. The EU Bank sector has had some significant change of "fundamental fortune" in the last few weeks - with relative earnings revisions looking better, valuations being cheap, scoring thematically both as "a dog" and "value" - and add to that the hope of dividend momentum going into next year. A lot of this is however clearly in the price.

    Euro bans vs German 10 year, slight dislocation lately.

    European bank dividend: will it or wont it?
    Source: Refinitiv
    CITI: one of the most under-appreciated risks is the equity melt-up

    CITI joins the year-end melt-up train: "As we draw closer to the end of a tumultuous 2020, one of the unappreciated risks to asset markets in the coming months could be a melt-up in equities. Our metrics suggest light positioning, in conjunction with a potentially potent risk appetite mix including: a loose Fed, further fiscal stimulus in the US and reacceleration of the improvement of labour markets"

    NASDAQ year-end melt-up in 1999 below as inspiration...

    CITI
    CITI: one of the most under-appreciated risks is the equity melt-up
    Source: Refinitiv
    Why volatility is essential (to investing)?

    Long weekend Real Vision video worth listening to from earlier this year with one of TME's favourite vol thinkers, Chris Cole. Interview starts 17 min into the video, linkhere.

    Reflation is great, but don't tell the bond market

    US 10 year at same levels we traded at in late October, while Russell has moved "slightly" higher.

    Which one do you trust?

    Reflation is great, but don't tell the bond market
    Source: Refinitiv
    Are you ready for US lockdowns - 350k daily cases by early December

    Yesterday we outlined our super spreader trade logic for next week,hereandhere.

    Temperatures have dropped sharply and are projected to stay low for weeks to come.

    Below chart (1) from GS reinforces the possible US lockdown scenario becoming an even stronger narrative, especially as Thanksgiving will most likely be a big super spreader event, to be added to the cold weather model projections.

    As GS writes expect;

    1, sharp pick up in cases from 170k daily to 350k daily cases by Dec 5

    2, lockdown measures must be firmed up

    3, markets are under appreciating harsh US lockdowns over coming few weeks

    People have sold volatility and other related protection to lowest levels since Corona. Why not pick up some cheap(er) protection/volatility in case the cold weather and Thanksgiving bring back the US lock down narrative?

    After all, VIX closed at lowest since the Corona crisis started (chart 2).

    Are you ready for US lockdowns - 350k daily cases by early December
    Source: GS
    Are you ready for US lockdowns - 350k daily cases by early December
    Source: Refinitiv