US inflation cools in October. Overall #inflation as measured by CPI rose 7.7% YoY, way below the 7.9% est. Core CPI, increased 6.3% YoY, below the 6.5% YoY expected... forced one of the larger short squeeze days in memory in the ARKK like stocks that had been bombed out lately..duration rallies, long-end rallies 30bp or so and USDollar has one of its sharpest daily (few hours) decline in years...we talked a lot recently about consensus usd positioning... >>>> Strip away housing from core and CPI fell for the first time since May 2020, however with inflation still at 7.7% the FED cannot turn outright dovish (or maybe they do but will do more QT...)
#China supercharges the softer U.S infl data/peak inflation, peak usd, peak worries view...with easing of quarantine & flight bans in a significant change of the Covid Zero policy, anything China limit up pretty much. (HSI Tech was too oversold...), Cathay Airlines will increase passenger flights between China mainland and Hong Kong
Fed's Mester "monetary policy is going to need to be more restrictive", kind of stopped the short-covering rally in eq with SPX right on resistance levels around 3'920 (and USD turned as well)
Layoffs coming to AMZN next: employees in certain divisions were told to look for jobs elsewhere in the company as their teams were being suspended or shut: Dow Jones
FTX tapped into customer accounts to fund risky bets, Setting up its downfall. FTX Chief Executive Sam Bankman-Fried told an investor this week that Alameda owes FTX about $10bn...Madoff would be proud of Sam!
UK and EU ‘not far apart’ on NI Protocol, says Brussels’ ambassador to London
The crypto world 'issues' not over, in theory it won't matter too much to the rest of the market but might be a pretty harsh reality with those heavily involved directly, I fear Pension Fund will think twice and for a much longer time horizon before stepping in again (Ontario Teachers only to name one, let's hope not too many other PF's got involved!!.. far too many celebrities got involved to pump it all up, too little or no regulations, there were so many red flags all along, ignored by too many..sadly
Elon Musk 'tells Twitter staff at all-hands meeting that bankruptcy is not out of the question' - The banks selling Elon’s Twitter debt were getting bids of 60¢ on the dollar *before* he said bankruptcy is possible (it's his company now..)
Markets :
MASSIVE turn on the USDollar, bonds, GOLD, equity (duration, ARKK etc) GOLD and 2y yields UST... >>> were all those we pointed out in recent weeks that will react the quickest on any signs of 'peak worries'
USDJPY broke the big 145JPY level and never looked back, AUDUSD 0.6525+, CABLE 1.16+, EURUSD 1.0075+ only to name a few pairs, as long we remain above those levels, the USD long consensus was so big, we can still see some pain there into year-end...
GOLD...In Gold we trust (long-term), even better XPT
BONDS 30-40bps lower across curve, pretty brutal, as discussed recently, the Terminal rate is around 4.5/5% and the market had that priced in pretty much, now we should and will most likely get 50bps in Dec from Fed, but the market is taking the view it's the top (doesn't mean rates go lower for now, IMHO...patience, )
Equity markets, break of the 3925+ SPX500 confirmed for perhaps as high as 4150 big resistance area, duration/ARKK/non-profitable index etc which had been hammered/most shorted...., reacted the strongest, as you would imagine
Europe's Gas Use Slides 22% as Households Keep the Heating off (mild weather helping..clearly too)
Crypto - still shaky
...the moves were fast and brutal, totally Algo tastic driven for the first 4-5pct! in Eq.
Huge post-CPI price action: and more overnight as China markets in re-opening/rally mode!
S&P +5.3% = best day since Apr 2020
Nasdaq +7% = the best day since 2020
5yr yield biggest 1-day drop since 2009
DXY -2.25% = the worst day since 2015
Most shorted stocks jump almost 11% in one of the most violent rallies ever - more in this thread from the excellent Liz
https://s358.podbean.com/pb/c3df747106c5b99f30211747013951c5/636e17a5/data1/fs56/5709963/uploads/2022_11_11_SaxoMarketCall.pdf?pbss=9e8f411a-f227-5706-b742-dc0151b61c72 Great charts from Saxo's daily and CPI print triggers historic day across markets (podbean.com)
FTX’s Bankman-Fried Quietly Invested More than $500 Million in Sequoia and Other VCs — The Information Sam Bankman-Fried invested hundreds of millions in Sequoia Capital, Paradigm, Multicoin and Altimeter, the same VC firms that backed FTX. These ties show just how deeply entangled Silicon Valley VC firms are in SBF's collapsing crypto empire.
Who are the notable investors going down as FTX collapses? | Cryptopolitan The FTX ship has sunk, taking with it a number of prominent investors. The last several days have been a roller coaster. Binance is abandoning its intentions to acquire the embattled crypto exchange on Wednesday. Sam Bankman-crypto Fried’s enterprise is on the edge of implosion as a result. Private investors valued FTX at $32 billion earlier this year.
no way back Donald
Minister warns of ‘catastrophic’ power interruptions unless gas accepted as transitional fuel – The Irish Times Minister warns of ‘catastrophic’ power interruptions unless gas accepted as transitional fuel
have a great day
team PVM