Don't worry

does this mean for the market? The market is trading inside a trend channel that started after the banking crisis. The upside remains a huge pain trade.

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• 2 min read
Don't worry

This is trend perfection. NASDAQ and SPX are trading within the trend channel which began after the banking crisis. The downside remains a big pain trade...

Source: Refinitiv

Source: Refinitiv

What happens when the Fed stops raising rates?

Here is the average price of equities over the last 4 "end-of-hike" periods.

One month later, +3.3%

  1. 3-months later: +8.0%

  2. 1-year later: +17.5%

The US equity market tends to rise in the first month, third months and the year following the Fed's decision to stop raising short-term rates. Only one exception occurred in 2000, the year following the Fed's final rate hike on March 15th. This was during the burst of the dot-com bubble. (Data Trek)

Bank stress: still in the spotlight

Our analysis indicates that tighter lending standards in 2023 will reduce GDP growth by approximately 0.5pp.

Source: Goldman

What is the Scary CRE Virus?

Investment banks have been focusing on the topic of CRE problems for weeks. Banks own about 50% of commercial loans, but CRE problems are not as large as they were in 1990.

Source: TS Lombard

Why lower equity volatility is important

Late cycle, equity volatility is often lower due to macroeconomic conditions that are generally favourable.

Source: Goldman

Vix: a fearless way to face the future

The gap between VIX and SPX indicates that we are just in a "pause".

Source: Refinitiv

Is it necessary to spread more hate?

The latest squeeze prompted people to buy puts. Although the put-call ratio has dropped a lot in recent months, we are still far from "depressed levels" that have coincided local market highs...

Source: Tradingview

Hedge funds hate banks

The ratio of long to short is very low. Everyone going to be right about banks from here on?

Source: GS prime book

Banks in the region

Not out, just down. Although hedge funds have reduced their long/short ratio at regional banks, it is still higher than what was seen in 2020.

Source: GS

You're weak, but...

What BofA’s growth indicators tell us. The outlook is not good.

Source: BofA

....but the silver lining is there

After a steady rise since August 2022, the global economy is on the mend.

Source: BofA

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