{{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

    Bulls giving up

    Time for a proper squeeze?

    Latest AAII bullish sentiment reading.

    Bulls giving up
    Source: Refinitiv

    Get thefreeapp!

    Use the browser menubelowon the top rightand tap
    iOS Browser Menu Android Browser MenuAdd to Home Screen
    Issues for Chinese property giant Evergrande when it comes to its restructuring

    CN Wirereportsthe Chinese real-estate giant Evergrande, reportedly to have asked the local govt for help in its material asset restructuring. They write Evergrande warns of systematic risks if the restructuring cannot finish on time. The failure of restructuring may lead to a capital chain rupture of Evergrande and trigger financial systemic risks.

    Are these further cracks in the Chinese debt mountain?

    Covid: Cases explode in Czech Republic

    The central European country went from below-EU and below-World per capita new case rates to rates similar to the US peak in about a month.

    Datapoints are all going in the wrong direction.

    Covid: Cases explode in Czech Republic
    Source: George Pearkes
    Who has bounced back... and who hasn't
    Who has bounced back... and who hasn't
    Source: Long View
    SPAC carnage as SEC announces closer look at them

    SEC Chairman Jay Claytontold CNBC "One of the areas in the SPAC space that I'm particularly focused on is the incentives and compensation to the SPAC sponsors,"

    Various SPAC companies such as DPHC, GRAF, FMCI are down on the the news.

    Peter Thiel joins the SPAC boom

    The SPAC boom has not shown any signs of slowing down. Now Axiosreportsthat famed investor Peter Thiel is joining the party launching a SPAC focusing to purchase a tech, financial services, or media company in Southeast Asia.

    Be greedy when...

    Maybe be small greedy here then as fear is far from extreme, but we have come "down" a lot from "greedy" levels?

    Be greedy when...
    Source: CNN
    Tech Trouble? Anti-trust regulators at the gate...

    The antitrust suit is around the corner and is expected to focus on GOOGL's agreements with OEMs like AAPL, where they pay to be the default search engine. The complaint is expected to be filed by end-September. Europe offers precedence following a 2018 ruling, and GOOGL started offering EU users a choice screen on new Android devices.

    Sanford Bernstein consider three scenarios:

    1) A choice screen for Android only – likely limited impact for GOOGL

    2) The choice screen ruling extends to iOS – If there's a choice screen and users pick Google, it could lead to windfall profits for GOOGL from TAC savings

    3) AAPL signs an exclusivity deal with a competitor – potentially cutting Google out. We caveat that a ruling on any DOJ suit could take years to play out, and may ultimately result in a different outcome than the choice screen in Europe.

    Sanford Bernstein
    Lumber - not out of the woods yet

    Lumber and NASDAQ "psychology" continue moving in tandem.

    Lumber - not out of the woods yet
    Source: Refinitiv
    LQD - the chart

    134 is the line in sand level.

    LQD - the chart
    Source: Refinitiv
    VVIX not "buying" much of the latest VIX spike
    VVIX not "buying" much of the latest VIX spike
    Source: Refinitiv
    EV Adoption

     MS Research now forecasts global EV penetration rising to 26% by ’30 based on higher China and European EV penetration. However, noted that this could rise as high as 50% (potentially boosting annual EV sales by >20mm units to 45mm units annually) if the EU’s planned CO2 regulations become law, and are followed by other regions. 

    EV Adoption
    Source: Morgan Stanley
    EM high yielders - no love...

    ...despite vaccine progress.

    EM high yielders - no love...
    Source: GS
    Trump tweets heading towards new ATH

    The Presidential tweet count has been broadly trending higher this year...

    Chart: 1 month rolling average daily tweet count, including and excluding retweets

    Trump tweets heading towards new ATH
    Source: TrumpTwitterArchive.org
    So people are the least long tech in over a year, NASDAQ not this oversold since March and NASDAQ vol has not traded higher compared to other "main" equity vols over past weeks...
    Tech fear stays elevated, but has not moved over past weeks, relatively speaking

    Nasdaq vol vs Dow and NASDAQ vs S&P vol spreads have not moved overly much since early Sep.

    Tech fear stays elevated, but has not moved over past weeks, relatively speaking
    Source: Refinitiv
    NASDAQ has not been this oversold since late March

    Of course overbought can stay overbought for long, just as oversold can stay oversold for long, but given the fact a lot of people have "abandoned" the long tech trade, maybe a bounce is setting up.

    NASDAQ RSI
    NASDAQ has not been this oversold since late March
    Source: Refinitiv
    Tech Positioning

    US Hedge Funds are now the least overweight TMT they have been in over a year. Net exposures to Tech down to the 44th percentile in the last 12 months. Interestingly, Software exposures have come all the way down to the 33rd percentile over the last 12 months, although still at the ~90th percentile since 2010.

    MS PB
    S&P 500 INDEX ERASES GAIN FOR THE YEAR
    MOVE moving lower - Fed managed killing this one well

    MOVE (bond vol) vs VIX

    MOVE moving lower - Fed managed killing this one well
    Source: Refinitiv
    S&P - starting to price at least some probability of a US recession

    Note the chart is from Sep 17, but given the last sell off the S&P bar will increase, still far from yields pricing recession...

    S&P - starting to price at least some   probability of a US recession
    Source: JPM
    Jaws - at least some small "mean reversion" as Spuz catches up to yields

    Spuz vs US 10 year yield. Rates have traded extremely boring during this equities "turbulence".

    Jaws - at least some small "mean reversion" as Spuz catches up to yields
    Source: Refinitiv
    pre market prints...Tesla -4.2% at 365, Apple -1.9% at 105
    Fed and ECB BS
    Fed and ECB BS
    Source: Mizuho
    European equities trading lock-stock with economic surprises
    European equities trading lock-stock with economic surprises
    Source: JPM
    Europe sick child again - macro surprises really negative

    The macro outlook is clearly worsening in Europe. The JPM EASI index (economic activity surprise index) for the euro area turned negative in early September and continues to trend lower

    Europe sick child again - macro surprises really negative
    Source: JPM