Finally some moves
KREdded
KRE bounced big time and volumes were huge. How many KRE longs do you know? As we showed earlier today in our thematic email (premium subs only, here), regional banks are massively hated.
Source: Refinitiv
The daredevil trade?
Investors are all in on tech and hate banks. Dare the inverse soon?
Source: BofA
Price action explained
Summing it up well via JPM's Ron Adler: "...traders are finding it harder to be optimistic about equities, but it’s similarly difficult to be pessimistic about any megacap names. The megacap names bolster the broader tape, thus frustrating bears given the market’s resilience."
CTAs and black gold
"Computers" need to buy oil in pretty much all scenarios. Just pick your view...
Source: GS
Sexy SOX
As SOX goe, goes the market? Note that SOX continues to outperform the NDX rather aggressively over the past sessions. As GS pointed out earlier this week, the crowd has started reloading on semis...Chart over the past days (in %).
Source: Refinitiv
Fed skipping June
TS Lombard's Blitz: "...the Fed is skipping a June hike. More likely to be discussed when the FOMC meets in mid-June is what to do about QT after the debt ceiling is lifted and issuance surges to refill the TGA. My guess is that soon after lift-off, QT comes to an end".
Source: TS Lombard
TSLA takeaways
1. Musk reiterated multiple times that the next 12 months will be difficult for Tesla and he tied his cautious into the macro issues going on. But, this view isn’t in line with the relatively constructive outlook for the auto industry. Bernstein believes this weakness for Tesla stems from their limited model lineup.
2. The Cybertruck was touched upon by Musk and he stated that it would be expensive and will require a tough manufacturing ramp. Bernstein estimates it would cost $80K+ and forecasts 500 units this year and possibly 50-75k in FY24.
3. Musk was very bullish on the Optimus robot and stated it would represent the biggest part of Tesla’s longer term value. The technical complexity and prevailing cost keeps Bernstein a little more skeptical over the next 5-10 years. (Sanford Bernstein)
BTC price has tracked its prior 2017/18 price cycle
US crypto exchange trading volumes are in decline as banks stopped offering services to facilitate US dollar-crypto transactions, and one of the largest retail exchanges, Coinbase, has received a Wells Notice. Bitcoin's price activity tells a different story and is surprising, given the regulatory actions.
Source: Morgan Stanley
The 0DTE stats of the day
Calculations based on tick level data indicate daily net gamma order flow has grown from roughly -$20B at the end of October to -$50B now.
Source: JPM
Retail learning the trick
Retail punters have shifted from big buyer of gamma to big sellers of gamma. The biggest problem is they do not understand what selling gamma means. Given the latest implosion in vols and markets doing very little, the wise options seller feels smart. Let's see what happens when market decides moving out of the boring range...
Source: JPM
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