Market in agony and pain
Pain in a pic
HF VIP stocks vs the most shorted basket at extremely "painful" levels.
Source: GS
Bear steepening pain
More of the same. The US 2/30 year continues the latest explosive move....
Source: Refinitiv
Apple pain - what goes up must come down
Apple continues trading well offered today again. Note we almost reached the 100 day moving average today. This is the first short term support, but catching falling knives is a strategy we dislike.
Source: Refinitiv
VIX pain ahead?
Nomura's McElligott with some "nervous" VIX charts.
Source: Nomura
Source: Nomura
The short is rather long
Non dealers US equity positioning; record short $120bn, record long $165bn, currently around $90bn long.
Source: GS
Sensitive to a sell off
Volatility control funds have increased the equity long and sensitivity to a sell off has shot up sharply higher. Add some short gamma to the mix, and things could get dynamic...
Source: DB
Will we ever see a "modest" sell off?
It has been a long time...
Source: DB
Beat rates yes. Earnings reactions no
With 85% of the index having now reported results, the 78% beat rate is back well above trend and at its highest level in nearly 2Y. That said, earnings reactions remain negative on average no matter the surprise-type, a dynamic we haven’t seen since 2Q17.
Source: Jefferies
Source: Jefferies
Mike Wilson asks if fiscal dominance has hit a wall
This year's fiscal impulse caught Mike Wilson off-sides on the economy, but has not prevented the earnings recession in his view. With Fitch's downgrade and the bond market calling into question the sustainability of this policy, investors should be ready for potential disappointment on growth. Combined with the substantial increase in the supply of Treasury notes and bonds expected to fund these government expenditures, bond markets have sold off considerably in the last week. This should start to call into question equity valuations, which were already high before the recent rise in yields. Furthermore, if fiscal spending must be curtailed due to higher political or funding costs, the unfinished earnings decline that began last year is more likely to resume, as he continues to forecast.
Source: Morgan Stanley
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