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...
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%
3-months later: +8.0%
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.
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.
Vix: a fearless way to face the future
The gap between VIX and SPX indicates that we are just in a "pause".
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...
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.
You're weak, but...
What BofA’s growth indicators tell us. The outlook is not good.
....but the silver lining is there
After a steady rise since August 2022, the global economy is on the mend.
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