Bears got thrown a lifeline
VVIX exploding higher
VIX of VIX is exploding higher. The crowd is loading up on VIX options. Do we see VIX catching up soon?
VIX volatility structure shifting higher
The entire curve is shifting higher as the crowd is back to chasing hedges. Note the shift is most notable in the short end of the curve, where the biggest "juice" is to be found.
Flipped the switch
Morgan Stanley’s US cycle indicator has flipped from 'expansion' to 'downturn'. Historically, this phase has supported a defensive posture and meant a worse backdrop for risk asset returns, changes in sector leadership, and a good environment for fixed income.
Source: Morgan Stanley
NASDAQ's rates gap - zoomed out
30 min 6 months chart of the gap between NASDAQ and the 10 year inverted needs little commenting.
If dollar is a risk on/off "indicator"...
...then make sure to watch the short term gap between the SPX and the eurusd closely.
Too far too fast?
MSCI World has recovered almost half of the ’22 losses...
Nobody said it was going to be easy
S&P 500 EPS CY23 going down and S&P 500 going up....
The yield curve: This time it is different
"Our analysis above strongly suggests that a large part of the inversion seen in current US yield curves comes not from high recession odds or inflation normalization, but rather from low long run real rate levels. Investors appear to be wedded to the secular stagnation, low r* view of the world from the last cycle. We believe this cycle is different, with an economy that can support a higher long run real rate than currently assumed. The next few months should offer clues on which of these views is correct". (GS)
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